37947117 Mutual Funds and Ulips
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A
PROJECT REPORT ON
ldquoCOMPARATIVE STUDY OF MUTUAL FUNDS AND MARKET LINKED
INSURANCE PLANSrdquo
FOR THE PARTIAL FULFILLMENT OF
ldquoMASTERES IN BUSINESS ADMINISTRATIONrdquo2009-2011
AtTata Aig Life Insurance company
Bhopal (MP)
SUBMITTED TO SUBMITTED BY MR PRAVEEN CHOUDHARY AKSHAY KUMBHARE
2 | P a g e
3 | P a g e
BONAFIDE CERTIFICATE
This is to certify that the Project Report titled ldquoComparative study of MUTUAL FUNDS and MARKET LINKED INSURANCE
PLANSrdquo for TATA AIG LIFE insurance company is a bonafide work carried out by Akshay kumbhare of MBA (second semester) of MKPONDACOLLEGE OF MGMTfor the fulfillment of MBA course of MKPONDACOLLEGE OF MGMT BHOPAL(MP)
Director Guide MR SHRINIVASAN MR PRAVEEN CHOUDHARY
Date
Place BHOPAL
4 | P a g e
ACKNOWLEDGEMENT
I take this opportunity to place on record my grateful thanks and sincere
gratitude to all those who gave me valuable advice and inputs for my study My
study could not have been completed if I had not been able to get the reference
materials from the company
I sincerely thank my esteemed guide Miss Shradha Tiwari (unit manager) for
her valuable guidance and co-operation rendered to me throughout the project
reportIt would not have been possible for me to complete this project without
there meticulous guidance and suggestions
I express my sincere regards to MR SHRINIVASAN (DEAN) and my guide Mr
PRAVEEN CHOUDHARY (FACULTY) for constant Support and valuable
guidance from time to time for completion of this project
Last but not least I would also like to express my thanks to my family members
who inspired me to put in my best efforts for the research project report
AKSHAY KUMBHARE
PREFACE
5 | P a g e
The research provides an opportunity to a student to demonstrate knowledge
skill and competencies required during the project The training project helps to
know the problems in the organization and to suggest them how to get rid of
those problems
Although I have tried my level best to prepare this report an error free report
every effort has been made to offer the most authenticate position with accuracy
The report is divided in to five chapters The first part consists of Introduction to
the topic Second part gives a brief overview about the Industry and
Organization The middle part contains the Research methodology used in the
project Fourth Chapter is the most important part as it contains the Analysis of
data Last Part contains the Conclusion
AKSHAY KUMBHARE
DECLARATION
6 | P a g e
I hereby declare that this project title ldquoCOMPARATIVE STUDY OF MUTUAL
FUNDS AND MARKET LINKED INSURANCE PLANSrdquo is a genuine amp bonafide
project prepared by me in partial fulfillment of Master Degree in Business
Administration
The project work is original amp conclusions drawn herein are based on the data
collected amp analyzed by myself
To best of my knowledge this project work has not been submitted by anyone
else in any other institute or university
Date AKSHAY KUMBHARE
Place Bhopal MBA (2nd SEM)
TABLE OF CONTENTS
7 | P a g e
1COVER AND TITLE PAGE PAGE NUMBER
a)Certificate of the company helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Front page
b)Bonafide certificatehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 1
c)Acknowledgementhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 2
d)Prefacehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 3
e)Declaration given by studenthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 4
f)Table of contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
g)Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7
2INTRODUCTION TO PROJECT
a) Introduction helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9-19
b) Scope of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
c) Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 21
3ORGANISATION AND INDUSTRY PROFILE
a)Industry PROFILEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 23-26
b)Company profile 27-41
8 | P a g e
4RESEARCH METHODOLOGY
a)Conceptual and theoretical reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 43-44
b)Research reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
5DATA ANALYSIS AND INTERPRETATION
a)Analysis part 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47-54
b)Analysis part 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 55-66
6CONCLUSIONS
a)Facts and findings helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 68
b)Limitations of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 69
c)Suggestions Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 70-73
d) Conclusion helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 74-75
Bibliography helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 77
Annexurehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip79-85
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
2 | P a g e
3 | P a g e
BONAFIDE CERTIFICATE
This is to certify that the Project Report titled ldquoComparative study of MUTUAL FUNDS and MARKET LINKED INSURANCE
PLANSrdquo for TATA AIG LIFE insurance company is a bonafide work carried out by Akshay kumbhare of MBA (second semester) of MKPONDACOLLEGE OF MGMTfor the fulfillment of MBA course of MKPONDACOLLEGE OF MGMT BHOPAL(MP)
Director Guide MR SHRINIVASAN MR PRAVEEN CHOUDHARY
Date
Place BHOPAL
4 | P a g e
ACKNOWLEDGEMENT
I take this opportunity to place on record my grateful thanks and sincere
gratitude to all those who gave me valuable advice and inputs for my study My
study could not have been completed if I had not been able to get the reference
materials from the company
I sincerely thank my esteemed guide Miss Shradha Tiwari (unit manager) for
her valuable guidance and co-operation rendered to me throughout the project
reportIt would not have been possible for me to complete this project without
there meticulous guidance and suggestions
I express my sincere regards to MR SHRINIVASAN (DEAN) and my guide Mr
PRAVEEN CHOUDHARY (FACULTY) for constant Support and valuable
guidance from time to time for completion of this project
Last but not least I would also like to express my thanks to my family members
who inspired me to put in my best efforts for the research project report
AKSHAY KUMBHARE
PREFACE
5 | P a g e
The research provides an opportunity to a student to demonstrate knowledge
skill and competencies required during the project The training project helps to
know the problems in the organization and to suggest them how to get rid of
those problems
Although I have tried my level best to prepare this report an error free report
every effort has been made to offer the most authenticate position with accuracy
The report is divided in to five chapters The first part consists of Introduction to
the topic Second part gives a brief overview about the Industry and
Organization The middle part contains the Research methodology used in the
project Fourth Chapter is the most important part as it contains the Analysis of
data Last Part contains the Conclusion
AKSHAY KUMBHARE
DECLARATION
6 | P a g e
I hereby declare that this project title ldquoCOMPARATIVE STUDY OF MUTUAL
FUNDS AND MARKET LINKED INSURANCE PLANSrdquo is a genuine amp bonafide
project prepared by me in partial fulfillment of Master Degree in Business
Administration
The project work is original amp conclusions drawn herein are based on the data
collected amp analyzed by myself
To best of my knowledge this project work has not been submitted by anyone
else in any other institute or university
Date AKSHAY KUMBHARE
Place Bhopal MBA (2nd SEM)
TABLE OF CONTENTS
7 | P a g e
1COVER AND TITLE PAGE PAGE NUMBER
a)Certificate of the company helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Front page
b)Bonafide certificatehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 1
c)Acknowledgementhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 2
d)Prefacehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 3
e)Declaration given by studenthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 4
f)Table of contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
g)Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7
2INTRODUCTION TO PROJECT
a) Introduction helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9-19
b) Scope of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
c) Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 21
3ORGANISATION AND INDUSTRY PROFILE
a)Industry PROFILEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 23-26
b)Company profile 27-41
8 | P a g e
4RESEARCH METHODOLOGY
a)Conceptual and theoretical reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 43-44
b)Research reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
5DATA ANALYSIS AND INTERPRETATION
a)Analysis part 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47-54
b)Analysis part 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 55-66
6CONCLUSIONS
a)Facts and findings helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 68
b)Limitations of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 69
c)Suggestions Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 70-73
d) Conclusion helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 74-75
Bibliography helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 77
Annexurehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip79-85
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
3 | P a g e
BONAFIDE CERTIFICATE
This is to certify that the Project Report titled ldquoComparative study of MUTUAL FUNDS and MARKET LINKED INSURANCE
PLANSrdquo for TATA AIG LIFE insurance company is a bonafide work carried out by Akshay kumbhare of MBA (second semester) of MKPONDACOLLEGE OF MGMTfor the fulfillment of MBA course of MKPONDACOLLEGE OF MGMT BHOPAL(MP)
Director Guide MR SHRINIVASAN MR PRAVEEN CHOUDHARY
Date
Place BHOPAL
4 | P a g e
ACKNOWLEDGEMENT
I take this opportunity to place on record my grateful thanks and sincere
gratitude to all those who gave me valuable advice and inputs for my study My
study could not have been completed if I had not been able to get the reference
materials from the company
I sincerely thank my esteemed guide Miss Shradha Tiwari (unit manager) for
her valuable guidance and co-operation rendered to me throughout the project
reportIt would not have been possible for me to complete this project without
there meticulous guidance and suggestions
I express my sincere regards to MR SHRINIVASAN (DEAN) and my guide Mr
PRAVEEN CHOUDHARY (FACULTY) for constant Support and valuable
guidance from time to time for completion of this project
Last but not least I would also like to express my thanks to my family members
who inspired me to put in my best efforts for the research project report
AKSHAY KUMBHARE
PREFACE
5 | P a g e
The research provides an opportunity to a student to demonstrate knowledge
skill and competencies required during the project The training project helps to
know the problems in the organization and to suggest them how to get rid of
those problems
Although I have tried my level best to prepare this report an error free report
every effort has been made to offer the most authenticate position with accuracy
The report is divided in to five chapters The first part consists of Introduction to
the topic Second part gives a brief overview about the Industry and
Organization The middle part contains the Research methodology used in the
project Fourth Chapter is the most important part as it contains the Analysis of
data Last Part contains the Conclusion
AKSHAY KUMBHARE
DECLARATION
6 | P a g e
I hereby declare that this project title ldquoCOMPARATIVE STUDY OF MUTUAL
FUNDS AND MARKET LINKED INSURANCE PLANSrdquo is a genuine amp bonafide
project prepared by me in partial fulfillment of Master Degree in Business
Administration
The project work is original amp conclusions drawn herein are based on the data
collected amp analyzed by myself
To best of my knowledge this project work has not been submitted by anyone
else in any other institute or university
Date AKSHAY KUMBHARE
Place Bhopal MBA (2nd SEM)
TABLE OF CONTENTS
7 | P a g e
1COVER AND TITLE PAGE PAGE NUMBER
a)Certificate of the company helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Front page
b)Bonafide certificatehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 1
c)Acknowledgementhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 2
d)Prefacehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 3
e)Declaration given by studenthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 4
f)Table of contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
g)Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7
2INTRODUCTION TO PROJECT
a) Introduction helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9-19
b) Scope of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
c) Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 21
3ORGANISATION AND INDUSTRY PROFILE
a)Industry PROFILEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 23-26
b)Company profile 27-41
8 | P a g e
4RESEARCH METHODOLOGY
a)Conceptual and theoretical reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 43-44
b)Research reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
5DATA ANALYSIS AND INTERPRETATION
a)Analysis part 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47-54
b)Analysis part 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 55-66
6CONCLUSIONS
a)Facts and findings helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 68
b)Limitations of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 69
c)Suggestions Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 70-73
d) Conclusion helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 74-75
Bibliography helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 77
Annexurehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip79-85
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
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Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
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To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
4 | P a g e
ACKNOWLEDGEMENT
I take this opportunity to place on record my grateful thanks and sincere
gratitude to all those who gave me valuable advice and inputs for my study My
study could not have been completed if I had not been able to get the reference
materials from the company
I sincerely thank my esteemed guide Miss Shradha Tiwari (unit manager) for
her valuable guidance and co-operation rendered to me throughout the project
reportIt would not have been possible for me to complete this project without
there meticulous guidance and suggestions
I express my sincere regards to MR SHRINIVASAN (DEAN) and my guide Mr
PRAVEEN CHOUDHARY (FACULTY) for constant Support and valuable
guidance from time to time for completion of this project
Last but not least I would also like to express my thanks to my family members
who inspired me to put in my best efforts for the research project report
AKSHAY KUMBHARE
PREFACE
5 | P a g e
The research provides an opportunity to a student to demonstrate knowledge
skill and competencies required during the project The training project helps to
know the problems in the organization and to suggest them how to get rid of
those problems
Although I have tried my level best to prepare this report an error free report
every effort has been made to offer the most authenticate position with accuracy
The report is divided in to five chapters The first part consists of Introduction to
the topic Second part gives a brief overview about the Industry and
Organization The middle part contains the Research methodology used in the
project Fourth Chapter is the most important part as it contains the Analysis of
data Last Part contains the Conclusion
AKSHAY KUMBHARE
DECLARATION
6 | P a g e
I hereby declare that this project title ldquoCOMPARATIVE STUDY OF MUTUAL
FUNDS AND MARKET LINKED INSURANCE PLANSrdquo is a genuine amp bonafide
project prepared by me in partial fulfillment of Master Degree in Business
Administration
The project work is original amp conclusions drawn herein are based on the data
collected amp analyzed by myself
To best of my knowledge this project work has not been submitted by anyone
else in any other institute or university
Date AKSHAY KUMBHARE
Place Bhopal MBA (2nd SEM)
TABLE OF CONTENTS
7 | P a g e
1COVER AND TITLE PAGE PAGE NUMBER
a)Certificate of the company helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Front page
b)Bonafide certificatehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 1
c)Acknowledgementhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 2
d)Prefacehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 3
e)Declaration given by studenthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 4
f)Table of contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
g)Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7
2INTRODUCTION TO PROJECT
a) Introduction helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9-19
b) Scope of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
c) Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 21
3ORGANISATION AND INDUSTRY PROFILE
a)Industry PROFILEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 23-26
b)Company profile 27-41
8 | P a g e
4RESEARCH METHODOLOGY
a)Conceptual and theoretical reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 43-44
b)Research reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
5DATA ANALYSIS AND INTERPRETATION
a)Analysis part 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47-54
b)Analysis part 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 55-66
6CONCLUSIONS
a)Facts and findings helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 68
b)Limitations of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 69
c)Suggestions Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 70-73
d) Conclusion helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 74-75
Bibliography helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 77
Annexurehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip79-85
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
5 | P a g e
The research provides an opportunity to a student to demonstrate knowledge
skill and competencies required during the project The training project helps to
know the problems in the organization and to suggest them how to get rid of
those problems
Although I have tried my level best to prepare this report an error free report
every effort has been made to offer the most authenticate position with accuracy
The report is divided in to five chapters The first part consists of Introduction to
the topic Second part gives a brief overview about the Industry and
Organization The middle part contains the Research methodology used in the
project Fourth Chapter is the most important part as it contains the Analysis of
data Last Part contains the Conclusion
AKSHAY KUMBHARE
DECLARATION
6 | P a g e
I hereby declare that this project title ldquoCOMPARATIVE STUDY OF MUTUAL
FUNDS AND MARKET LINKED INSURANCE PLANSrdquo is a genuine amp bonafide
project prepared by me in partial fulfillment of Master Degree in Business
Administration
The project work is original amp conclusions drawn herein are based on the data
collected amp analyzed by myself
To best of my knowledge this project work has not been submitted by anyone
else in any other institute or university
Date AKSHAY KUMBHARE
Place Bhopal MBA (2nd SEM)
TABLE OF CONTENTS
7 | P a g e
1COVER AND TITLE PAGE PAGE NUMBER
a)Certificate of the company helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Front page
b)Bonafide certificatehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 1
c)Acknowledgementhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 2
d)Prefacehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 3
e)Declaration given by studenthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 4
f)Table of contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
g)Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7
2INTRODUCTION TO PROJECT
a) Introduction helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9-19
b) Scope of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
c) Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 21
3ORGANISATION AND INDUSTRY PROFILE
a)Industry PROFILEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 23-26
b)Company profile 27-41
8 | P a g e
4RESEARCH METHODOLOGY
a)Conceptual and theoretical reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 43-44
b)Research reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
5DATA ANALYSIS AND INTERPRETATION
a)Analysis part 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47-54
b)Analysis part 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 55-66
6CONCLUSIONS
a)Facts and findings helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 68
b)Limitations of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 69
c)Suggestions Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 70-73
d) Conclusion helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 74-75
Bibliography helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 77
Annexurehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip79-85
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
6 | P a g e
I hereby declare that this project title ldquoCOMPARATIVE STUDY OF MUTUAL
FUNDS AND MARKET LINKED INSURANCE PLANSrdquo is a genuine amp bonafide
project prepared by me in partial fulfillment of Master Degree in Business
Administration
The project work is original amp conclusions drawn herein are based on the data
collected amp analyzed by myself
To best of my knowledge this project work has not been submitted by anyone
else in any other institute or university
Date AKSHAY KUMBHARE
Place Bhopal MBA (2nd SEM)
TABLE OF CONTENTS
7 | P a g e
1COVER AND TITLE PAGE PAGE NUMBER
a)Certificate of the company helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Front page
b)Bonafide certificatehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 1
c)Acknowledgementhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 2
d)Prefacehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 3
e)Declaration given by studenthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 4
f)Table of contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
g)Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7
2INTRODUCTION TO PROJECT
a) Introduction helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9-19
b) Scope of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
c) Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 21
3ORGANISATION AND INDUSTRY PROFILE
a)Industry PROFILEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 23-26
b)Company profile 27-41
8 | P a g e
4RESEARCH METHODOLOGY
a)Conceptual and theoretical reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 43-44
b)Research reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
5DATA ANALYSIS AND INTERPRETATION
a)Analysis part 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47-54
b)Analysis part 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 55-66
6CONCLUSIONS
a)Facts and findings helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 68
b)Limitations of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 69
c)Suggestions Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 70-73
d) Conclusion helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 74-75
Bibliography helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 77
Annexurehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip79-85
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
7 | P a g e
1COVER AND TITLE PAGE PAGE NUMBER
a)Certificate of the company helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip Front page
b)Bonafide certificatehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 1
c)Acknowledgementhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 2
d)Prefacehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 3
e)Declaration given by studenthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 4
f)Table of contentshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
g)Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7
2INTRODUCTION TO PROJECT
a) Introduction helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9-19
b) Scope of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
c) Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 21
3ORGANISATION AND INDUSTRY PROFILE
a)Industry PROFILEhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 23-26
b)Company profile 27-41
8 | P a g e
4RESEARCH METHODOLOGY
a)Conceptual and theoretical reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 43-44
b)Research reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
5DATA ANALYSIS AND INTERPRETATION
a)Analysis part 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47-54
b)Analysis part 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 55-66
6CONCLUSIONS
a)Facts and findings helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 68
b)Limitations of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 69
c)Suggestions Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 70-73
d) Conclusion helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 74-75
Bibliography helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 77
Annexurehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip79-85
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
8 | P a g e
4RESEARCH METHODOLOGY
a)Conceptual and theoretical reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 43-44
b)Research reviewhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
5DATA ANALYSIS AND INTERPRETATION
a)Analysis part 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47-54
b)Analysis part 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 55-66
6CONCLUSIONS
a)Facts and findings helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 68
b)Limitations of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 69
c)Suggestions Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 70-73
d) Conclusion helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 74-75
Bibliography helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 77
Annexurehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip79-85
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
9 | P a g e
EXECUTIVE SUMMARY
Insurance in India is booming But not to level comparative with the developed economics such as JapanSingapore etcAlso liberization of the Insurance sector has provided huge self employment opportunity Insurance is a federal subject in India The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
While doing project at TATA AIG LIFE MP NAGAR BHOPAL branchI observed that unit managers were facing some serious problem regarding the awareness of people about MUTUAL FUNDS AND ULIPS The TATA AIG LIFE and other insurance players are facing problem the same problemto find out the reason the main objective of the study is kept as ldquoCOMPARATIVE ANALYSIS OF
MUTUAL FUNDS AND ULIPSrdquo
Inadequate information regarding the work of agentsfinancial consultantagent advisors is the main reason of attrition in Insurance industry
The study is proposed to find out the difference difference mutual funds and ulips and to compare themso that a clear picture is depict before InvestorAfter analysis I came to the conclusion that mostly people are unaware of ulips and mutual funds which includes the executive of the company and investors too
The project work is a sincere attempt to collect the information stating the various reasons for attrition and suggests the useful measure for retention
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
10 | P a g e
INTRODUCTION TO
PROJECT
INTRODUCTION TO TOPIC
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
11 | P a g e
ULIPS (UNIT LINKED INSURANCE PLANS)-
The introduction of Unit Linked Insurance Plans has possibly been the single largest innovation in the field of life insurance It has addressed and overcome many difficulties and concern s that customers had about life insurance ndash liquidity flexibility and transparencyThese benefits are possible because ULIPs are differently structured products and leave many choices to the policyholder They are structured such that the protection (insurance) element and the savings element (investment) can be distinguish and hence managed according to onersquos specific needs offering flexibility and transparency Thus we can say it is such a product that takescare of multiple needsThere were some factors which gave entry for ULIPs in the insurance market - Firstly was the arrival of private of private players and ULIPs were the most significant innovation done by them and secondly was the decline of assured returns in endowment plans Besides this as the stock markets were booming which now has become the primary factor As mentioned earlier enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals
ULIPs are also called as ldquoBundled PoliciesrdquoAccording to Vijay Sinha (Assistant Director ndashAgency Tata-AIG Life Insurance) ldquoULIP is ideal for someone who is looking for a long term investment product is under-insured and is averse to taking a traditional life insurance product Ulip should be looked at from an investment as well as insurance point of view and not isolationrdquo
UNIT LINKED INSURANCE PLANS-Early the market of ULIPs was taken up Birla Sun they were the first to capture the market in this field These are the insurance plans which are attached to Units ndash Mutual Funds The premium amount received in this policy some part is used in investment of funds and remaining is used for insurance coverULIPs are remarkably similar to mutual fund in terms of structure and functioning premium payments are converted into units and net asset value (NAV) is declared regularly Investors have an option of choosing their fund according to their risk taking ability They disclose all the material facts most frequent and consistent (often quarterly or half-yearly) Also investor has afairly good idea about expenses The expenses which are considered are as follows-
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
12 | P a g e
1) Mortality Rate - These are charged by the life insurance company to cover the risk of an eventuality to the individual2) Administration salesmarketing Charges - All life insurance companies incur certain expenses on regular basis Agentrsquos commission sales amp marketing expenses and overhead costs incurred to run the day to day basis are some examples3) Fund Management Charges - These charges are levied by the insurance company to cover the expenses incurred by them on managing Ulip monies4) Ulip-fund Switch Charges - These charges are borne by the individuals when they decide to switch their money from one type of fund to another5) Top-up Charges A certain percentage is deducted from the top-up amount to recover the expenses incurred on managing the sameULIPs are very different from the traditional policies because they are based on some fundamentals of Mutual funds as different types of funds which are created wherein the premiums which are received on the policy these are invested in these funds basically these funds are of following types-a) AggressiveGrowth Fund-Such funds invest a major portion in equity markets They are therefore considered to be high on risk parameterb) Debt Funds - These types of funds invest the premium money in debt instruments like gsecs bonds and AAA rated securities Such funds are low risk in naturec) Balanced Funds - This fund is combination of growth amp debt fund This means its portfolio consists of both equities and debt instruments The risk for this fund is moderated) Money MarketLiquid Funds- Such a fund invests the premium money in short term liquid instruments like bank deposits and money market instruments
MUTUAL FUND
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
13 | P a g e
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities (stocks bonds short-term money market instruments other mutual funds other securities andor commodities such as precious metals) The mutual fund will have a fund manager that trades (buys and sells) the funds investments in accordance with the funds investment objective In the US a fund registered with the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) rules must distribute nearly all of its net income and net realized gains from the sale of securities (if any) to its investors at least annually Most funds are overseen by a board of directors or trustees (if the US fund is organized as a trust as they commonly are) which is charged with ensuring the fund is managed appropriately by its investment adviser and other service organizations and vendors all in the best interests of the funds investor
A mutual fund is a trust that pools the savings of a number of investors who share a common financial goalThe money thus collected is then invested in capital market instruments such as sharedebentures and other securitiesThe income earned through these investments and the capital appreciations realized are shared by its unitholders in proportion to the number of units owned by them
Advantages of mutual fund
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
14 | P a g e
Professional management
Diversification
Low costs
Liquidity
Transparency
Flexibility
Tax benefits
WHAT ARE VARIOUS TYPES OF MUTUAL FUNDS
A common man is so much confused about the various kinds of Mutual Funds that he is afraid of investing in these funds as he can not differentiate between various types of Mutual Funds with fancy names Mutual Funds can be classified into various categories under the following heads-
(A) ACCORDING TO TYPE OF INVESTMENTS - While launching a new scheme every Mutual Fund is supposed to declare in the prospectus the kind of instruments in which it will make investments of the funds collected under that scheme Thus the various kinds of Mutual Fund schemes as categorized according to the type of investments are as follows -
(a) Equity funds schemes
(b) Debt funds schemes (also called income funds)
(c ) Diversified funds schemes (also called balanced funds)
(d) Gilt funds schemes
(e) Money market funds schemes
(f) Sector specific funds
(g) Index funds
(B) ACCORDING TO THE TIME OF CLOSURE OF THE SCHEME - While launching a new schemes Mutual Funds also declare whether this will be an
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
15 | P a g e
open ended scheme (ie there is no specific date when the scheme will be closed) or there is a closing date when finally the scheme will be wind up Thus according to the time of closure schemes are classified as follows -
(a) Open ended schemes
(b) Close ended schemes
(C) ACCORDING TO TAX INCENTIVE SCHEMES - Mutual Funds are also allowed to float some tax saving schemes Therefore sometimes the schemes are classified according to this also-
(a) Tax saving funds
(b) Not tax saving funds other funds
(D) ACCORDING TO THE TIME OF PAYOUT - Sometimes Mutual Fund schemes are classified according to the periodicity of the pay outs (ie dividend etc) The categories are as follows -
(A) Dividend paying schemes
(b) Reinvestment schemes
The mutual fund schemes come with various combinations of the above categories Therefore we can have an Equity Fund which is open ended and is dividend paying plan Before you invest you must find out what kind of the scheme you are being asked to invest You should choose a scheme as per your risk capacity and the regularity at which you wish to have the dividends from such schemes
SOME OF THE TERMS USED IN MUTUAL FUNDS
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
16 | P a g e
Net Asset Value (NAV)Net Asset Value is the market value of the assets of the scheme minus its liabilities The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date Sale PriceIt is the price you pay when you invest in a scheme and is also called Offer Price It may include a sales load Repurchase Price - It is the price at which a Mutual Funds repurchases its units and it may include a back-end load This is also called Bid Price Redemption Price It is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity Such prices are NAV related Sales Load Front End Load It is a charge collected by a scheme when it sells the units Also called lsquoFront-endrsquo load Schemes which do not charge a load at the time of entry are called lsquoNo Loadrsquo schemes Repurchase lsquoBack-endrsquo Load
It is a charge collected by a Mutual Funds when it buys back Repurchases the units from the unit holders
ULIPS VS MUTUAL FUNDS
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
17 | P a g e
ULIPs are all set to pose serious competition to mutual funds Though ulips as an investment avenue are closest to mutual funds in terms of their structure and functioning like disclosing their NAVrsquos daily etc
ULIPs are essentially a long term commitment between the policyholder and the insurance company and mutual funds are built to cater to the relatively short ndashterm need of the investor The investments are made with a shorter- term duration profile when compared to ulipsThe seemingly similar structure of both of them makes it vital for investors to be aware of the fine distinctions in both the offering and make informed decisions Following are some insurance companies who offer ULIPs-
-Tata Aig Bajaj Allianz ING Vysya HDFC Standard HDFC Standard HDFC Standard -Birla Sun lifeAviva Life Insurance Kotak Mahindra Max New York Life Met Life Sahara Life etc Sahara Life etc
Following are Difference between ULIPs amp Mutual Fund-
DIFFERENCE BETWEEN MUTUAL FUND AND ULIPS
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
18 | P a g e
Points of Difference ULIPS(Unit Linked Insurance Plans)
MFs(Mutual Funds)
1) Meaning - These are the Insurance policies which are linked to units
of Mutual Fund
It is an investment organization with a main
objective of collecting funds from various segments
of people and investing the same in a variety of
securities
2) Primary Objective - Its main objective is investment amp protection
Its objective is only investments
3) Investment Duration It works out for long term investment only
It works out to medium term long term amp short
term Risky for short term investors
4) Insurance Cover - ULIPs provide insurance cover (except annuity products
which may be issued with without risk cover) and from
the amount invested in ULIPs after netting out the risk
premium for life risk cover and administrative expenses
the insurer invests the balance as per the objective of the
specific ULIP product
MF schemes do not cover the life risk and the amount
invested net of expenses gets invested as per the
investment objective of the scheme
5) Expenses - Insurance companies have a relatively free hand in
levying expenses on their
In MFs expenses charged for various activities like
salesmarketing
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
19 | P a g e
ULIP products with no upper
limits being prescribed by the regulator the Insurance
Regulatory and Development Authority (IRDA)
administration and fund
management are capped (for example in equity oriented
mutual funds expenses are capped at 25 per annum) as per the guidelines of the Securities and
Exchange Board of India (SEBI) Similarly funds
usually charge their investors entry (at the timing of
making an investment) and exit (at the time of sale)
loads
6) Flexibility - Flexibility is limited to moving across different funds
offered with policy Correcting mistakes can turn out to
be expensive Moving funds from one ULIP to another
ULIP of a different fund house can be expensive
Very flexible Plenty of scope to correct mistakes if
any wrong investment decisions are made Portfolios
can be easily shuffled in MFs
7) Liquidity - Limited liquidity It need to stay invested for minimum
years before redeeming
Very liquid MF units can be sold any time(except
ELSS)
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
20 | P a g e
8) Investment Objective ULIPs can be used for achieving only long term
objectives (Children education marriage Retirement
planning)
MFs can be used as vehicle for investments to
achieve different objectives(Eg Buying a car three
years from now Down payment for a home five
years from now Childrenrsquos education 10 years from
now Childrenrsquos marriage 15 years from now
Retirement planning 25 years from now Medical
expenses after retirement 25 years from now)
9) Flexibility of Switchovers
-
Insurance companies permit their ULIP investors
usually 3-4 switch overs free of charge and thereafter
every additional switch over beyond the permissible limit
is permitted at some cost
In MFs an investor usually is subjected to exit load
andor entry load when heshe exercises a switch over
option
10) Minimum Lock- in
Period
ULIPs currently are with a minimum lock-in of three
years
MF schemes (except ELSS which has a lock-in of
three years) do not have any such lock in
11) Investment styles
and Portfolio
Disclosures -
Insurance companies declare their portfolios once in a
quarter and their investment style are less aggressive and
they resort to less churning
Most MFs usually declare their portfolios on monthly
basis and MFs are generally known to be more active
in fund management
12) Tax benefits and Irrespective of the nature of the plan chosen by the
In the case of mutual funds only investments in taxsaving
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
21 | P a g e
implications - investor all ULIP investments qualify for deductions up
to one lakh under Section 80C of the Income Tax Act In
the case of ULIPs the maturity proceeds are tax-free
funds ie Equity-linked savings schemes
(ELSS) are eligible for Section 80C benefits
On the other hand in the case of equity-oriented
mutual funds if the investments are held for a period
over 12 months the gains are tax free and if sold
within a 12-month period they attract short-term
capital gains tax 10 percent
Similarly debt-oriented funds attract long-term
capital gains tax 10 percent while short-term
capital gain is taxed at the investorrsquos marginal tax
rate
SCOPE OF THE STUDY
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
22 | P a g e
THE PROJECT INCLUDES THE FOLLOWING AREAS
(1)IN THIS PROJECT THE STUDY RELATED TO THE COMPARITIVE STUDY
OF MARKET LINKED INSRANCE PLANS WITH MUTUAL FUND
(2)SURVEY OF BHOPAL IS INCLUDED
(3)SURVEY OF 150 INDIVIDUALS IS ALSO INCLUDED
OBJECTIVES OF STUDY PROJECT STUDY
Comparative Study of Unit Linked Insurance plans and
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
23 | P a g e
Mutual Fundsrdquo
MAIN OBJECTIVE
To study and compare the Unit Linked Insurance Plans and
Mutual Fund
To know the difference in investing in ULIP amp Mutual Fund
To know whether these two options are substitute for each other
or not
SUB OBJECTIVES
(1) To know the factors that influence investors while taking
investment decisions
(2) To know the merits amp demerits of mutual funds
(3) To know investing in Mutual Fund is worthy or not
(4) To know advantages amp disadvantages of investing in ULIP
(5) To know the suitability of ULIP amp Mutual Fund to different
investors
(6) To know Customer awareness and preferences
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
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Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
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To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
24 | P a g e
ORGANISATION
AND
INDUSTRY
PROFILE
INDUSTRY PROFILE
INSURANCE
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
25 | P a g e
Is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for payment
An insurer is a company selling the insurance An insured or policyholder is the person or entity buying the insurance policy
The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage called the premium
Risk management the practice of appraising and controlling risk has evolved as a discrete field of study and practice
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a large possibly devastating loss The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
26 | P a g e
INSURANCE IS A FEDERAL SUBJECT IN INDIA
The insurance sector has gone through a number of phases and changes Since 1999 when the government opened up the insurance sector by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26 the insurance sector has been a booming market However the largest life-insurance company in India is still owned by the government
IRDA controls all the Insurance business in India They are setting structure and boundaries for the insurance companies to act upon Starting from licensing to approving the products IRDA directs the companies in India They also protect customer interests in the country
I NSURANCE COMPANIES IN INDIA APPROVED BY IRDA
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
27 | P a g e
Tata AIG Life Insurance Company Limited Bajaj Allianz Life Insurance Company Limited Birla Sun Life Insurance Co Ltd HDFC Standard life Insurance Co Ltd ICICI Prudential Life Insurance Co Ltd ING Vysya Life Insurance Company Ltd Life Insurance Corporation of India Max New York Life Insurance Co Ltd Met Life India Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Limited SBI Life Insurance Co Ltd Tata AIG Life Insurance Company Limited Reliance Life Insurance Company Limited Aviva Life Insurance Co India Pvt Ltd Shriram Life Insurance Co Ltd Sahara India Life Insurance Bharti AXA Life Insurance Future Generali Life Insurance IDBI Fortis Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Religare Life Insurance DLF Pramerica Life Insurance Star Union Dai-ichi Life Insurance Agriculture Insurance Company of India Apollo DKV Insurance Cholamandalam MS General Insurance HDFC Ergo General Insurance Company ICICI Lombard General Insurance IFFCO Tokio General Insurance National Insurance Company Ltd New India Assurance Oriental Insurance Company Reliance General Insurance Royal Sundaram Alliance Insurance Shriram General Insurance Company Limited Tata AIG General Insurance United India Insurance Universal Sompo General Insurance Co Ltd
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
28 | P a g e
ORGANISATION PROFILE
TATA AIG PROFILE
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
29 | P a g e
INTRODUCTION
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 Grouprsquos pre-eminent leadership position in India and AIGrsquos global presence as one of the worldrsquos 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 per cent Tata AIG Life provides insurance solutions to individuals and corporates Tata AIG Life Insurance Company was licensed to operate in India on February 12 2001 and started operations on April 1 2001
THE TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations Revenues in 2007-08 are USD 625 billion (around Rs 251543 crores) of which 61 was from business outside India The Grouprsquos Net Profit for 2007-08 is USD 54 billion (around Rs 21578 crores) The Group employs around 350000 people worldwide The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics The business operations of the Tata Group currently encompass seven business sectors - Communications and Information Technology Engineering Materials Services Energy Consumer Products and Chemicals The Groups 28 publicly listed enterprises have a combined market capitalisation of around $60 billion among the highest among Indian business houses and a shareholder base of 29 million The major companies in the Group include Tata Steel Tata Motors Tata Consultancy Services (TCS) Tata Power Tata Chemicals Tata Tea Indian Hotels Tata Teleservices and Tata Communications
AMERICAN INTERNATIONAL GROUP INC (AIG)
American International Group Inc (AIG) a world leader in insurance and financial services is the leading international insurance organization with operations in more than 130 countries and jurisdictions AIG companies serve commercial institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer In
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
30 | P a g e
addition AIG companies are leading providers of retirement services financial services and asset management around the world AIGs common stock is listed on the New York Stock Exchange as well as the stock exchanges in Ireland and Tokyo
Tata AIG Life Insurance Company Ltd Tata AIG Life offers a broad array of life insurance products to individuals associations and businesses of all sizes with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs
HISTORY
TATA AIG LIFE INSURANCE COMPANY LIMITED
TATA GROUP
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
31 | P a g e
Tata Enterprises with 82 companies spread over seven sectors and with an annual turnover exceeding US $ 88 billion employs more than 262000 people Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance aviation iron and steel Tata companies have forged a number of global alliances with eminent international partners in several fields In terms of capital market performance as many as 40 listed Tata companies account for nearly 5 of the total market capitalization of all listed companies The Group has had a long association with Indias insurance sector having been the largest insurance company in India prior to the nationalisation of insurance
TATA Group in InsuranceThe Late Sir Dorab Tata was the founder Chairman of New India Assurance Co Ltd a group company incorporated way back in 1919 Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972 Not deterred by the move Tata group have ventured into risk management services having tied up with AIG group back in 1977 with the incorporation of Tata AIG Risk Management Services Pvt Ltd
AIGAmerican International Group Inc is the leading US based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States Its member companies write a wide range of commercial and personal insurance products through a variety of distribution channels in over 130 countries and jurisdictions throughout the world AIGs Life Insurance operations comprise of the most extensive worldwide network of any life insurer AIGs global businesses also include financial services and asset management including aircraft leasing financial products trading and market making consumer finance institutional retail and direct investment fund asset management real estate investment management and retirement savings products
The Joint VentureTata AIG Life Insurance Co Ltd is capitalised at Rs 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
32 | P a g e
the balance 26 per cent Mr George Oommen has been named managing director of Tata AIG Life
Tata-AIG plans to provide broad array of life insurance plans to cover to both individuals and groups The company is headquartered in Mumbai with branch operations in Delhi Chennai Hyderabad Bangalore Calcutta Pune and Chandigarh
Contact AddressTata AIG Life Insurance Company Limited
82 Ahura Centre4th floor Mahakali Caves Road
Andheri (East)Mumbai - 400 093
IndiaTel 1600-119966
Fax 91-022-6938265URL wwwtata-aigcom
TATA AIG LIFE INSURANCE
Headquarters Mumbai Area India
Industry Insurance
Type Public Company
Status Operating
Company Size 10000 employees
Founded 2001
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
33 | P a g e
Website httpwwwtata-aigcom
Common Job Titles
Manager 17
Training Manager 7
Sales Manager 5
Business Development Manager
5
Location Head 4
Gender Male 79
Female 21
SOME MORE INFORMATION
The non-life insurance arm Tata AIG General Insurance Company which started its operation in India on Jan 22 2001 offers the complete range of insurance for automobile home personal accident travel energy marine property and casualty as well as several specialized financial lines
BUSINESS DIVISIONS
Agency ndash Agency
WSM
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
34 | P a g e
Alternate Channels GMD Pensions Direct Marketing
FINANCIAL RESULTS FOR THE FISCAL 03-04
Total Premium Rs 254 cr (253 growth) First year Premium Income Rs 180 cr Agent strength 18000 Life cover sold 162000
VISION AND MISSON
Our Vision
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
35 | P a g e
To be the leading provider of wealth managementprotection and retirement solutions that meets the needs of our customers and adds value to their lives
Our mission To be transparent in the way company deal with customers and to act with integrityTo invest in and build quality human capital in order to achieve mission
Our ValuesOur values represent the core shared beliefs that guide how we act and work together to achieve our goals We share a set of 6 core values Customer First People Passion Performance Integrity and Empathy
Customer First Anticipate their priorities Exceed their expectations
Integrity We must conduct our business fairly with honesty and transparency Everything we do must stand the test of public scrutiny
People We must work cohesively with our colleagues across the Group and with our customers and partners around the world building strong relationships based on tolerance understanding and mutual cooperation Strive to develop diverse talent and reward excellence
Performance We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide
Passion We must be excited about what we do We must have a strong internalized drive to meet goals Relentless determination to solve customer problems
Respect We must be caring show respect compassion and humanity for our colleagues and customers around the world and always work for the benefit of the communities we serve
KEY PERSONS
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
36 | P a g e
FK KAVARANA TATA AIG CHAIRMAN
M SURESH MANAGING DIRECTOR
ASHOK S GANGULY DIRECTOR
HRKHUSRO KHAN DIRECTOR
KEY PERSONS
MR ADITYA KANADE - Head internal audit
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
37 | P a g e
MR VIVEK SOOD - Chief financial officer
MR RAJEEV DEWAL - Head legal and compliance
MRSARAVAN KUMAR - Chief investment officer
MRHEERAK BASU - Appointed actuary
TATA AIG PRODUCTS
Tata AIG offers a range of flexible insurance products for children Policies dedicated to children and their key features are as given under
FOR CHILDREN
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
38 | P a g e
Life Assure Career Builder financial assistance at key stages of childrsquos life
Life Assure Educare funding childrsquos education
Life Assure 21 years Money Saver cash payments in the form of survival benefits at regular intervals
Life InvestAssure II full life coverhigh returnsflexibility of deciding the length of life cover term
Life InvestAssure Flexi unit linked endowment investment plan flexibility to suite your needs
Life InvestAssure Plus single-premium paying termsecurity of life insurance policypotentially higher returns
Life MahaLife Gold steady income and life-long insurance coverage for child
Life Starkid endowment policy dedicated for childrsquos career and marriage
Life United Ujjwal Bhavishya unit linked endowment plan arranging finance for childrsquos future
FOR ADULTS
The company has a slew of life insurance of plans for adults
Life Assure Lifeline Plans High coverage at an affordable cost
Life Assure Growth Plans Endowment policyKeep your money safe and have it grow
Life Assure 21 years Money Saver Cash payments at the end of every 3 yearsLife insurance coverage plus the flexibility of periodic payments
Life Assure Golden Years Plan Endowment policySafety as well as returns
Life Easy Retire Annuity plan with Return of Purchase PriceSingle premium payment
Life InvestAssure Health Unit linked investment planHelps achieve financial goals along with a comprehensive health policy
Life Hospi CashBack Multiple claims against unforeseen hospitalization expensesMoney back
Life Health Investor Benefit on diagnosis of 12 critical illnessesCover in case of unfortunate death100 return of premium in case of no claims
Life InvestAssure II Life cover plus high returns
Life InvestAssure Apex Unit-linked life insurance planGuaranteed Maturity Unit Price
Life InvestAssure Extra Investment linked insurance planDesigned for customers of premier banks
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
39 | P a g e
Life InvestAssure Care Non-participating unit linked insurance planInbuilt Critical Illness benefit
Life InvestAssure Flexi Unit linked endowment planHelps one achieve financial goals
Life InvestAssure Gold flexibility to invest more moneytakes care of emergency cash requirements
Life InvestAssure Insta Unit linked planDual benefits of insurance coverage and wealth creation
Life InvestAssure Plus Fllexible insurance planSingle-premium paying termHigher returns on premiums
Life InvestAssure Optima Unit-linked insurance solutionOptimise investment returns
Life LifePlus If you outlive the term get premium backIn case of death by natural causes get sum assured
Life MahaLife Gold Good for retirement planningProvides for steady income and insurance coverage
Life Raksha large cover at a small premium
Life ShubhLife life insurance protection and high returns
Life Health First Covers health contingencies
Life Health Protector Covers cost of major surgery or treatment
FOR RETIREMENT PLANNING
If you plan to retire at the age of 60 or 65 you could need to fund your lifestyle for several years without any regular salary But if you have invested in a right plan you can rest assured
Life Assure Golden Years Plan Endowment policyIf you live past the term you get sum assured along with a host of bonuses
Life Easy Retire Immediate annuity planSingle premium payment
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
40 | P a g e
Life InvestAssure II Flexible planLife cover plus high returns
Life InvestAssure Gold Provides for emergency cash requirements or a steady post-retirement income
Life InvestAssure Future Custom-made retirement solution
Life MahaLife Gold Steady income and insurance coverage
Life Nirvana Freedom to choose retirement age
Life Nirvana Plus Guaranteed addition of 10 percent of sum assured every 5 years
Life InvestAssure Swarna Jeevan Unit linked non participating pension plan
ACHIEVEMENTS
(1)TATA AIG LIFE PARTNERS WITH THE INDIAN MEDICAL ASSOCIATION ( MUMBAI BRANCH) TO CREATE INDIArsquoS FIRST ldquoHEALTH QUOTIENT rdquo
Feb 01 2007 Tata AIG Life Insurance Company Ltd (Tata AIG Life) in association with the Indian Medical Association
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
41 | P a g e
(2) TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR Establishes state-of-the-art training center for advisors and corporate agents
Sikar July 16 2004hellip
(3) TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
Mumbai March 30 2004hellip
(4) TATA AIG LIFE - FIRST INSURANCE COMPANY TO LAUNCH MICRO INSURANCE
~Full Range of Products and dedicated Offices ~1048707 First major Micro Insurance initiatives venture by an Indian insurance company1048707 Launches three new Micro Insurance products and five Micro Insurance branches1048707 Adopts a tailor made rural communication strategy to reach out to the ruralcommunityMumbai August 8 2006
ACHIEVEMENTS
Health Insurance Solutions from Tata AIG Lifefor United Bank of India CustomersKolkata March 13 2008 United Bank of India (UBI) and Tata AIG Life Insurance (Tata AIGLife) today announced the launch of lsquoUnited Health Solutionsrsquo ndash a customised health insurance
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
42 | P a g e
package for customers of UBIUnited Health Solutions has two powerful plans ndash Health Investor and Health Protector Theseproducts provide effective cover against critical diseases accident and death
TATA AIG LIFE INSURANCE COMPANY LIMITED TIES UPWITH DBS BANKMumbai March 27 2006 Tata AIG Life Insurance Company Limited (Tata AIGLife) today announced its strategic tie-up with DBS Bank Singaporersquos largestbank and the fifth largest banking group in Hong Kong Under this alliance DBSBank will make the entire range of Tata AIG Lifersquos insurance products andservices available to its customers at bank branches across India
ACHIEVEMENTS
Tata AIG Life Insurance total annual premium up 77 to Rs 880Crores
1048707 FYP income up 48 to Rs 432 crores1048707 Agency Total Premium Income up by 61 with persistency rate of 851048707 Total Premium Income from Alternate Channels up 132 Bancassurancegrowing at 179 1048707 Geographical network expanded to cover 45 cities with 85 offices1048707 Lives covered under Rural sector - 21 versus Regulatory obligation of161048707 Lives covered under Social sector 101873 versus Regulatory obligationof 20000 livesMumbai June 20 2006 Tata AIG Life Insurance Company Limited (Tata AIG Life)today announced an increase of 77 percent in total premium income to Rs 880 croresfor the annual period ending March 31 2006 compared to Rs 497 crores for thecorresponding period last year The First Year Premium income increased by 48percent to Rs 432 crores for the year ended March 31 2006 compared to Rs 292crores for the same period last yearThrough its wide array of Group life insurance pensions gratuity and superannuationproducts Tata AIG Life has covered over 716016 lives during the period April 2005-
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
43 | P a g e
March 2006 an increase of 43 percent over the last fiscal year Additionally 3 17430individual life business policies were issued from April 2005 to March 2006 an increaseof 344 percent over the last fiscal year
MR FARROKH KAVARANA Chairman Tata AIG Life said ldquoWe continue to focus oncreating a world class life insurance entity that anticipates the needs of bothcustomers and our stakeholders and provides innovative solutions to address theirneeds We look forward to the opportunities and challenges that lie ahead and remainconfident of creating increasing value for our policyholders and stakeholders throughour customer centric approach and the high quality of our products and servicesrdquo
MR TREVOR BULL MANAGING DIRECTOR Tata AIG Life added ldquoWe are pleased toannounce that the company has made significant strides in enhancing our positionwithin India both through corporate and individual customers while continuing toincrease the scale of our operations to better serve our customers Our wide range ofdistribution channels and strategic alliances have all contributed to this result byoffering customers and partners choices which address their growing protection andasset accumulation needs We will consistently expand our product offerings bydelivering innovative products to complement our commitment to offer quality adviceand service that sets us apart as the company of choicerdquo
RESEARCH
METHODOLOGY
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
44 | P a g e
RESEARCH METHODOLOGY
CONCEPTUAL AND THEORETICAL REVIEW
RESEARCH DESIGN ndashDescriptive research designDescriptive research design are those studies which are concerned with describing the characteristics of a particular individualor of a groupin this study like observationquestionnairesexamination of records etc are used for such studies
DATA SOURCES- Primary data and secondary data
RESEARCH APPROACH ndash Face to face interview observation individual depth interview
RESEARCH INSTRUMENT ndashQuestionnaire
Questionnaire method
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
45 | P a g e
In the study questionnaire was send to the person concerned with a request to answer the questions and return the questionnairea questionnaire consists of a number of questions typed in definite order on a set of formsthe respondents had to answer the question on their own
DATA COLLECTION
PRIMARY DATAThe primary data are those which are collected afresh and for the first time and thus happen to be original in characterIn this study data is collected through observationguidance of the supervisor and data is collected through questionnaire
1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Advisors of Tata AIG life3) Data explaining the working of the ULIPs and mutual funds
SECONDARY DATAIn this study secondary sources of data were the various websites and insurances manuals The mainly provided information about the insurance sector and the companyrsquos profileThese help in gaining knowledge about industry
1) Books2) Newspapers3) Magazines4) Newsletter
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
46 | P a g e
5) Internet6) Television7) Booklet8) Policy Brochures
RESEARCH REVIEW
SAMPLING
It is the process of obtaining information about an entire population by examining only a part of it
SAMPLING UNIT-Individuals
SAMPLE SIZE-150 units
SAMPLING TECHNIQUE-Random convenience
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
47 | P a g e
SURVEY PERIOD WAS 6 WEEKS STARTED FROM 4th JULY TO 15th AUGUST 2010
DATA ANALYSIS
AND
INTERPRETATION
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
48 | P a g e
FINDINGS
(CUSTOMERS SURVEY)
ANALYSIS PART 1
MUTUAL FUND
1Which of the following investment options would you prefer
0
5
10
15
20
25
30
35
40
45
50
Options
resp
on
den
ts
Bank fixed deposit
Postal savings
Shares and bonds
Mutual funds
Insurance policies
Others
Bank FD amp Postalsavings
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
49 | P a g e
Analysis 44 of respondents have invested in bank deposits12 in
postal savings4 of respondents in shares and bonds and2
in mutual funds 3 in Insurance Policy and 34 have invested
in both fixed deposit and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
Analysis According to the above table 6 of the respondents have
invested in Mutual Funds and58 respondents have invested in Insurance
Policies36 have invested in both the Mutual Fund and Insurance Policies
0
10
20
30
40
50
60
70
Options
resp
onde
nts Mutual funds
Insurance policies
Mutual fund and
Insurance policies (Both)
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
50 | P a g e
3What is the reason for not investing
Analysis According to the above table 5 of the respondents are
uncertain to invest in Mutual Funds 1 of the respondents think it is high cost
and 3 of them are not interested in investments 90 of respondents have
invested in either investment
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Uncertainty
High cost
Not interested ininvestment
Others
Non respondents
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
51 | P a g e
4 Do you think investing in Mutual Fund is worthy
Analysis According to the above table 55 of the respondents think
that investing in Mutual Funds is worthy and 43 of the respondents think
it is not 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Yes
No
No response
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
52 | P a g e
5 According to you why an individual should invest in Mutual Fund
Analysis According to the above table 5 of the respondents say that they have invested to multiply their money 43 of the respondents have invested for moderate returns with moderate risk 16 of the respondents have invested to have a faster rate of growth 1 of the respondents have invested as other reason and 35 have invested so not responded for question
0
5
10
15
20
25
30
35
40
45
50
Options
Res
po
nd
ents
To multiply money
Moderate return withminimum risk
To have faster rate ofgrowth
Others
Non respondents
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
53 | P a g e
6 Do you have any plan of investing in near future (if no go to Q no8)
Analysis According to the table 8 of respondents plan to invest in a Mutual Fund and 90 do not plan to invest 2 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
54 | P a g e
7 When do you plan to invest
Analysis According to the table 25 of respondents plan to invest in a month 125 during a month to a year and 375 plan to invest after a year and 25 have not responded
0
05
1
15
2
25
3
35
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
55 | P a g e
8 How likely are you to recommend investment in Mutual fund to your friend
Analysis
According to the above table 54 of the respondents definitely will recommend about the investment of Mutual Funds 44 of the respondents might or might not recommend and 2 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
56 | P a g e
ANALYSIS PART 2
ULIPS
1 Are you aware of ULIP concepts in Life Insurance
Analysis
According to the table 51 of respondents are aware of ULIP concepts and 49 are not aware This shows investors are still not aware of Unit Linked Insurance Plan
484
486
488
49
492
494
496
498
50
502
Options
Res
po
nd
ents
Yes
No
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
57 | P a g e
2 In which companies have you invested
Analysis
According to the table 66 respondents have invested in LIC 3 have invested in ICICI PRU 23 in BAJAJ ALLIANZ 9 in AVIVA and 1 in others which include TATA AIG
0
10
20
30
40
50
60
70
Options
Res
po
nd
ents
LIC
ICICI Pru
Bajaj Allianz
Aviva Life Insurance
Reliance
others
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
58 | P a g e
3What made you to go for that company
Analysis According to the table 27 of respondents have invested in the company for the Brand name15 have invested for the service provided 39 have invested for the customer relationship the company maintains 14 of respondents have invested for the better policy options available 1 have invested for other reason and 4 have not responded
0
5
10
15
20
25
30
35
40
45
Options
Res
po
nd
ents
Brand Name
service
customer relationship
better policy option
others
Non respondents
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
59 | P a g e
4 What extra benefits would you like to have along with life cover
Analysis According to table the extra benefit customer would like to have is 53 Want a family income benefit 15 would like to have critical illness Benefit1 would like to have riders 8 would like to have more return and 2 would like other benefit and 21 would like to have family income benefit and critical illness benefit along with life cover
0
10
20
30
40
50
60
Options
resp
on
den
ts
Family income benefit
Critical illness benefit
Riders
Return
Others
Family income benefit ampCritical illness benefit
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
60 | P a g e
5 What is your expectation from investment plan
Analysis
According to table 59 of respondents expect security 3 expect high return and 1 expect minimum premium28 expect easy claim and 2 expect maximum sum assured 7 expect security and easy claim
0
10
20
30
40
50
60
70
Options
resp
on
den
ts
Security
High return
Minimum premium
Easy claim
Maximum sum assured
Others
Security and easy claim(Both)
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
61 | P a g e
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
Analysis According to table 1 of customers are aware of traditional plan 3 are aware of Retirement plans 5 are aware of Life time and 2 are aware of Life Link Super 89 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Traditional insuranceplan
Retirement plan
Life time plan
Life link super
Non respondents
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
62 | P a g e
7 Do you hold Unit linked insurance plan
Analysis
According to table 2727 of customers hold Unit Linked Insurance Plan and
7272 do not hold Unit Linked Insurance Plan
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Yes
No
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
63 | P a g e
8What did you like about Unit Linked Insurance Plan
Analysis
According to table 1818 of customers liked liquidity and 909 others and
7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts
Liquidity
Withdrawal
Flexibility
Others
Non respondents
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
64 | P a g e
9 How do you rank Unit linked plan of TATA AIG as compared to Mutual Fund
Analysis
According to table 1818 of customer have ranked TATA AIG as good
and 909 have ranked as satisfactory 7272 have not responded
0
1
2
3
4
5
6
7
8
9
Options
resp
on
den
ts Good
Satisfactory
Non respondents
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
65 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
Analysis According to the table 6 of respondents plan to invest in a ULIP and 91 do not plan to invest in near future 3 have not responded
0
10
20
30
40
50
60
70
80
90
100
Options
Res
po
nd
ents
Yes
No
Non respondents
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
66 | P a g e
11 When do you plan to invest
Analysis
According to the table 1666 of respondents plan to invest in a month
6666 plan to invest after a year1666 have not responded
0
05
1
15
2
25
3
35
4
45
Options
resp
on
den
ts A month
1month ndash 1 year
After 1 year
Non respondents
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
67 | P a g e
12 How likely are you to recommend investment in ULIP to your friends
Analysis
According to the above table 53 of the respondents definitely will recommend about the investment of ULIP 42 of the respondents might or might not recommend and 5 have not responded
0
10
20
30
40
50
60
Options
Res
po
nd
ents
Definitely recommend
Might not recommend
Non respondents
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
68 | P a g e
CONCLUSION
OVER ALL FACTS AND FINDINGS
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
69 | P a g e
Mutual funds are essentially short to medium term products The liquidity that these products offer is valuable for investors
ULIPs in contrast are now positioned as long-term products and going ahead there will be separate playing fields for ULIPS and MFs with the product differentiation between them becoming more pronounced
ULIPs now do not seek to replace mutual funds they offer protection against the risk of dying too early and also help people save for retirement
Insurance has to be an integral part of onersquos wealth management portfolio ULIPs and mutual funds are therefore not likely to cannibalise each other in the long run
While ULIPs as an investment avenue is closest to mutual funds in terms of their functioning and structure the first and foremost purpose of insurance is and will always be lsquoprotectionrsquo The value that it provides cannot be downplayed or underestimated As an instrument of protection insurance provides benefits that no investment can offer
It is important for an investor to understand his financial goals and horizon of investment in order to make an informed investment decision The decision to invest in either a mutual fund or a ULIP should depend on the time period of investment individual financial goals as well as risk taking appetite and itrsquos about time the industry and customer realize it
Thus we can say that ULIPs are different from Mutual funds and the basic difference between the two is the Insurance cover ie protection Alsothe ULIPs are for long term investments and Mutual Fundrsquos long as well as short term
LIMITATIONS
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
70 | P a g e
bull The time constraint was one of the major problems
bull The study is limited to the different schemes available under the mutual funds and ulips selected
bull The study is limited to selected mutual fund schemes and ulips
bull The lack of information sources for the analysis part
SUGGESTIONS AND RECOMMENDATIONS
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
71 | P a g e
SUGGESTIONS FOR MUTUAL FUNDS
According to agents private mutual fundrsquos advertisement and logo conceptplays major role in awareness about the product So mutual funds should alsodo aggressive ad campaign with the celebrity endorsement and innovative andcreative logo should be there which matches the product and signifies the strengthof the type
An agent in continues should be increased to boost sales
As the mutual fund industry is growing and facing tough competition fromforeign brands mutual funds should focus on product awareness and productpreference advertising
There are some investors who have invested in mutual funds but they areactually not aware about mutual funds because of the lack of awareness of mutualfunds so the company should conduct such a awareness programs that the peopleshould come to know about the schemes of mutual funds
Advertising of the schemes in newspaper should be done aggressively so thatinvestors get to know about the schemes performing well
The fund should emphasize its unique and positive features to the brokersinvestors and corporate
The organization should focus on balanced scheme as they are the mostpreferred scheme
SUGGESTIONS FOR ULIPS
Most of the respondents are not aware of Unit Linked
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
72 | P a g e
Insurance Plan the awareness programme for non-investors
should be increased by different medias like TV Magazines amp News Paper
The company has to provide proper training to advisors or marketing skills to improve the marketability of products
Educate people by arranging a meeting or fair for investors and
explaining about how ULIP works because investors are not aware of
ULIP as an investment option and investors do not have the sufficient
knowledge of the basic concepts of ULIP amp about the operating of ULIP
Complete information should be provided regularly to the advisors as
well as to the investors to keep them updated about the developments
Many of the investors say that they are ready to recommend about
investment to friends so the company should approach the investors
through the distributors and explain about the Insurance schemes
RECOMMENDATIONS TO THE COMPANY-
ULIPS-
The schemes should be designed in such a way which would also suitto the pockets of the lower and middle income groups
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
73 | P a g e
The premium should be quite less so that even lower class of peoplecan invest in such policy
At the maturity the policyholder should not only get NAV (Net AssetValue) amount but also the SA (sum Assured) ie guaranteed SA
The charges should be reduced
Term of the policy should be reduced
The premium amount should be reduced
The charges can be revised
Additional Support Required by the Agents from the Company-
- Field support ie the company should provide a staff wherein theywill get a field work done from them
- The company should provide proper database to their agents Forthe database the company can also have some tie-ups with some ofthe companies
- There should be monthly meetings held by the company for theagents wherein they can solve their problems and suggest the newways for the marketing of products
- There should be separates Claim Settlement Cell so that thecompany as well as the agents do not face any problem whilesettlement of claims
- Also the company can support the agents by having some kind ofpublicity
ANALYSIS- Thus from this survey I would say that the company should notonly target the middle age and lower class group but also retired andpensioners
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
74 | P a g e
Also the ULIPs are gaining lot of popularity but while taking these ULIPs oneshould take few measures as in
1) To know to the ULIP plan which of the insurance type is adjoinedterm or endowment
2) While choosing of fund there should be balanced of equity and debt orif equity some small percentage of debt should be taken so that somereturns are fixed
3) And consult to the investment advisor
CONCLUSION OF THE SURVEY
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
75 | P a g e
Life insurance sector is one of the key areas where enormous business potential exists Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy The basic urge in man to secure himself against any form of risk and uncertainty
After comparing Unit Linked life insurance plans and Mutual Fund it can be concluded that most of respondents are not aware of ULIP products of tata aig life
There is the difference between expenses of a ULIP as
compared with the expenses of a mutual fund If investor are
looking for a long-term investment avenue with an insurance
cover then ULIP is the product for them and if they are
looking at a product that helps investor to focus purely on
investment and returns over a medium term then mutual fund
is suitable
CONCLUSION FOR COMPANY
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
76 | P a g e
Tata Aig is one of the worldrsquos largest life insurance companyit has businesses spread out across the globeit came to india 2001it currently ranks top amongst the insurer in india
(sourceannual premium provided by the company)
The company faces a large amount of competition To sustain itself it must promote its products through advertisement and improve its selling techniquesconsumer must be aware of the new plans available at Tata Aig
The medium of advertising use could be internet since most of its competitiors use this tool to promote their productsthe company must be promoted as an Indian company since consumer seem to have more trust in investing in Indian firms
The unit linked concept must be specifically promotedthe general perception of life insurance has to change in india before progress is made in this fieldpeople should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings
Tata Aig could trap the rural markets with cheaper products and smaller policy termsThere are individual who are willing to pay small amounts as premium but the plans do not accept premium below a certain amount it was usually found that a large number of males were insured compared to femalesindividuals below the age of 30 were interested in investment plansthis was a general conclusion drawn during prospecting clients
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
77 | P a g e
BIBLIOGRAPHY
BIBLIOGRAPHY
A BOOKS1 Insurance Principles amp Practices MNMisra S Chand Publications2 Insurance MJMathew RBSA Publications
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
78 | P a g e
3 Insurance Fundamentals Environment amp Procedures BSBodla MC Garg KP Singh Deep amp Deep Publications of 20034 Insurance Institute of India IC 33------SJ Gidwani5 Taxmann Life Insurance agent ---- PR Khanna Taxmann Allied service pvt ltd
B NEWSPAPERS1 Economic Times2 Times Of India3 ESCOLIFE PAPER on Insurance by Ritu Nanda Vol 2 Issue viii June 2007
C MAGAZINES1 Money Simplified --Vol xxx Feb 2007 ldquo ULIPs how they fit inrdquo2 Consumer Voice ---Vol 7 Issue 3
D NEWSLETTER1 Tata AIG Life Agency Newsletter Vol 1 Edition 6 March 2007
E INTERNET wwwtata-aigcom wwwlicofindiacom wwwiciciprulifecom wwwreliancelifecom wwwmoneycontrolcom wwwpersonalfncom wwwetcom wwwgooglecom
F CNBC TV 18
G BOOKLET on the Orientation Programme of Employees at Tata AIG
H Policy Brochures of Tata AIG ICICI Prudential Reliance Life amp LIC
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
79 | P a g e
ANNEXURE
QUESTIONNAIRE
This information is for our internal use onlywill not be disclose to any other organizationdepartment COMPARATIVE ANALYSIS OF MUTUAL FUND AND MARKET LINKED INSURANCE PLANS
Name Address
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
80 | P a g e
Telephone AgeOccupation Annual incomeMarital status single or married (age of child if applicable)
SECTION A
1Which of the following investment options would you prefer
a)Bank fixed deposit
b)Postal savings
c)Shares and bonds
d)Mutual funds
e)Insurances policies
f)Others
g)Bank FD and postal savings
2 Have you invested in the following (Please tick)(if yes go to Q no4)
a)Mutual funds
b)Insurance policies
c)Mutual funds and insurance policies both
3What is the reason for not investing
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
81 | P a g e
a)Uncertainty
b)High cost
c)Not interested in investment
d)Others
e)Non respondents
4 Do you think investing in Mutual Fund is worthy
a) Yes
b)No
c) No response
5 According to you why an individual should invest in Mutual Fund
a) To multiply money
b) Moderate return with minimum risk
c)To have a faster rate of growth
d)Others
e)Non respondent
6 Do you have any plan of investing in near future (if no go to Q no8)
a)Yes
b)No
c)Non respondent
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
82 | P a g e
7 When do you plan to invest
a) A month
b)1 month - 1 year
c)After 1 year
d)Non-respondent
8 How likely are you to recommend investment in Mutual fund to your friend
a)Definitely recommend
b)Might not recommend
c)Non respondent
SECTION ndash B
1 Are you aware of ULIP concepts in Life Insurance
a)Yes
b) No
2 In which companies have you invested a)LIC
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
83 | P a g e
b)ICICI PRU
c)BAJAJ ALLIANZ
d)AVIVA LIFE
e)Others
3What made you to go for that company
a)Brand Name
b)Service
c)Customer Relationship
d)Better Policy Option
e)Others
f)Non Respondent
4 What extra benefits would you like to have along with life cover
a)Family Income Benefit
b)Critical Illness Benefit
c)Riders
d)Returns
e)Others
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
84 | P a g e
f)Family Income Benefits And Critical Illness Benefits Both
5 What is your expectation from investment plan
a)Security
b)High Return
c)Minimum Premium
d)Easy Claim
e)Maximum Sum Assured
f)Others
g)Security And Easy Claim
6 Are you aware of ULIP of TATA AIG (If no go to question no 10)
a)Traditional Insurance Plan
b)Retirement Plan
c)Life Time Plan
d)Life Link Super
e)Non-Respondent
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
85 | P a g e
7 Do you hold Unit linked insurance plan
a)Yes
b)No
8What did you like about Unit Linked Insurance Plan
a)Liquidity
b)Withdrawal
c)Flexibility
d)Others
e)Non-Respondent
9 How do you rank Unit linked plan of TATA AIG LIFE as compared to Mutual Fund
a)Good
b)Satisfactory
c)Non-Respondents
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
86 | P a g e
10 Do you have any plan of investing in ULIP in near future (if no go to Q no12)
a)Yes
b)No
c)Non Respondents
11 When do you plan to invest
a)A Month
b)1 Month- 1year
c)After 1 Year
d)Non-Respondents
12 How likely are you to recommend investment in ULIP to your friends
a) Definitely Recommend
b)Might Not Recommend
c)Non-Respondents
- INDUSTRY PROFILE
- INSURANCE
- INTRODUCTION
- TATA AIG LIFE INSURANCE
- (2)TATA AIG LIFE EXPANDS DISTRIBUTION NETWORK OPENS OFFICE IN SIKAR
- (3)TATA AIG LIFE INSURANCE COMPANY TIES-UP WITH INDIATIMES SMS 8888
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