1 | Page A Project report on Performance Evaluation of the Indian Life Insurance (A Study on IDBI Federal Life Insurance Ltd. and other Insurance Institution) Submitted By: Group No. 5 Vikas Kumar Sayeed Ahmed Aakash sharma Tushar jain Aashish srivastava
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A
Project report on
Performance Evaluation of the Indian Life Insurance
(A Study on IDBI Federal Life Insurance Ltd. and other Insurance Institution)
Submitted By:
Group No. 5
Vikas Kumar
Sayeed Ahmed
Aakash sharma
Tushar jain
Aashish srivastava
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Abstract
Indian Life insurance sector is growing at a faster rate. This sun rising industry has given a platform for
economic growth and employment. The great extent of importance realized after it has opened to the
private players in the post liberalization period. With many players in business, the insurance regulatory
and development authority came with innovative and constructive guidelines for both products and
services.
Internet and online policy purchase is a new trend that has inspired the players to be more focused in their
business. High in volume and low in margin is going to be the ways towards policy procuring. Rural,
social and Micro insurance is a new avenue to be thought of.
This paper discusses the new trends and challenges that the present industry is facing. Our study is only
limited to life insurance sector. The suggestion and recommendation will help both academician and
industry personnel to re- engineer their thought in insurance sector.
Acknowledgment
We hereby give our sincerest and heartfelt thanks to our faculty Prof. Monica Bhardwaj
(Assistant Prof., Fortune Institute of International Business, New Delhi) for her invaluable suggestions
thought provoking ideas and indispensable recommendations. This report has been written as a part of the
curriculum of the PGDM. We are indebted to him for spending his valuable time in guiding and
supporting us through all the obstacles experienced by us during the course of working on our project.
We are especially grateful to all our team members for providing their invaluable ideas and insights
which have helped us successfully complete our project work during the stipulated timeframe.
Keywords: Life Insurance, ULIPs, IRDA, IDBI,
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I. Industry/Company overview and environment analysis
Insurance: It is contract of agreement between two parties by which one of them (called insurer) agree
to indemnify the other (called insured) against a lost which may occur to the insured on the happening
some event.
Insurance is a means of protection from financial loss. It is a form of risk management primarily used to
hedge against the risk of a contingent, uncertain loss. An insurer, or insurance carrier (often called an
“insurance company), is sells the insurance policy to customers. The customers, who are called the insured
or policyholder, is the person or entity (which may be a private company or other organization) buying the
insurance policy. The amount of money the customer pays for a certain amount of insurance coverage is
called the “premium”. The first life insurance policies were taken out in the early 18th century. The first
company to offer life insurance was the Amicable Society for a Perpetual Assurance Office, founded in
London in 1706 by William Talbot and Sir Thomas Allen. (www.ibef.org, 2015)
Majorly there are 5 types of insurance 1. Life Insurance,
2. Property Insurance,
3. Health Insurance,
4. Auto Insurance, and
5. Home Insurance
India's life insurance sector is the biggest in the world with about 360 million policies which are
expected to increase at a Compound Annual Growth Rate (CAGR) of 12-15 per cent over the next five
years. The insurance industry plans to hike penetration levels to five per cent by 2020. (www.ibef.org,
2015)
The country‟s insurance market is expected to quadruple in size over the next 10 years from its current
size of US$ 60 billion. During this period, the life insurance market is slated to cross US$ 160 billion. The
general insurance business in India is currently at Rs 78,000 crore (US$ 11.7 billion) premium per annum
industry and is growing at a healthy rate of 17 per cent. (www.ibef.org, 2015)
The Indian insurance market is a huge business opportunity waiting to be harnessed. India currently
accounts for less than 1.5 per cent of the world‟s total insurance premiums and about 2 per cent of the
world‟s life insurance premiums despite being the second most populous nation. The country is the
fifteenth largest insurance market in the world in terms of premium volume, and has the potential to grow
exponentially in the coming years.
Indian Insurance Industry comprises of 52 companies out of which 24 are life insurance companies
and the other 28 are non-life insurance. IDBI Federal belongs to the life insurance sector the insurance
industry. Life insurance Corporation of India (LIC) is the only public sector company in the life insurance
sector, rest of 23 companies are private sector companies. Life insurance sector of India has been ranked
11th among the 88 countries in the life insurance business in FY 2014 and the growth in the non-life
insurance sector„s premium has outperformed the average global growth from the period of 2010-2013.
(www.educba.com, 2015)
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Insurance Industry in India is regulated by IRDAI (Insurance Regulatory Development Authority of India)
which was formed by the IRDA Act in 1999. IRDA is responsible in promoting, regulating and ensuring
orderly growth of the Indian insurance industry including the insurance and re-insurance business. Indian
Insurance industry has encountered many tremendous changes during its evolution from the period of late
1956 to year 2000, here are some of the major changes in the Indian insurance industry.
(www.educba.com, 2015)
The first ULIP was launched in India in 1971 by Unit Trust of India (UTI). With the Government of
India opening up the insurance sector to foreign investors in 2001 and the subsequent issue of major
guidelines for ULIPs by the Insurance Regulatory and Development Authority (IRDA), now Insurance
Regulatory and Development Authority of India (IRDAI), in 2005, several insurance companies forayed
into the ULIP business leading to an overabundance of ULIP schemes being launched to serve the
investment needs of those looking to invest in an investment cum insurance product. (www.educba.com,
2015)
Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that, unlike a pure
insurance policy, gives investors both insurance and investment under a single integrated plan. There are
several public and private sector insurance providers that either operate solo or have partnered with
foreign insurance companies to sell unit linked insurance plans in India. The public insurance providers
include LIC of India, SBI Life and Canara while and some of the private insurance providers include
Reliance Life, ICICI Prudential, HDFC Life, “IDBI Federal Life Insurance Ltd.”, Bajaj Allianz, Aviva
Life Insurance and Kotak Mahindra Life.
Mutual Funds & ULIPs differ on various key factors like fund switching options, charge structure,
liquidity, tax benefits and other major beneficial elements. ULIP plans allow investors to direct part of
their premiums into different types of funds (equity, debt, money market, hybrid etc.) whereas A mutual
fund pools the money from investors and uses it to invest in various securities according to a pre-specified
investment objective. Unit Linked Insurance Plans are long term plans where Mutual funds are ideal
investment tool for the short to medium term. Unit Linked Plans (ULIP) allows you to switch your
investment between the funds linked to the plan. This enables you to change the risk return but in mutual
funds no switching option is available. If you are not satisfied with the performance of the fund you can
exit completely from the same by paying exit charges, if applicable. (www.hdfclife.com, 2015)
Some of the Unit Linked Plans give you an additional benefit or loyalty benefit by issuing extra fund units
but mutual fund doesn‟t provide any this type of facility. There is other investment plan like ELSS, SIP
and MF.
IRDA - The Insurance Regulatory and Development Authority of India, it is the apex body overseeing
the insurance business in India. It protects the interests of the policyholders, regulates, promotes and
ensures orderly growth of the insurance in India. (www.educba.com, 2015)
3. How you come to know about this bank/Insurance Company.
TV Commercial () Social Media () Newspaper/Magazine () Refer by friend/Family ()
4. What are the things you consider before buying this insurance?
Please specify (___________)
5. Is your bank/insurance company following you on regular basis after taking insurance?
In a month () in a quarter () In a year () Never ()
6. If bank updating their scheme or changing some T&C, are they Informing you.
Yes () No ()
7. Have you cancel any life insurance policy in mean while?
Give Reason (__________)
If above answer is yes,
8. After cancel the policy with that bank/Insurance Company, which bank/Insurance Company you have taken
then?
Please specify (__________)
Section B - Please rate the following statements about life insurance service experiences opinion on the Scale
provided from 1 to 7 where 1 indicates strongly disagree and 7 indicates strongly agree
BP At the time of taking this insurance, what is the behaviour
of Agent?
1 2 3 4 5
BP Were the representative gives you all the information
while he was giving you details about the services?
1 2 3 4 5
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BI I feel that this company’s policy and T&C is good for me. 1 2 3 4 5
BI I would like to take other insurance in future by this
company if that will provide good return and cover.
1 2 3 4 5
BI I feel that this company’s policy will definitely help me In
future.
1 2 3 4 5
SAT I believe I am satisfied with my bank/insurance company
services. 1 2 3 4 5
SAT Overall, I am pleased with my bank/insurance company
services. 1 2 3 4 5
SAT Using the services of my bank/insurance company is
usually a satisfying experience. 1 2 3 4 5
SAT My feelings toward my bank/insurance company services
can best be characterized as very satisfied. 1 2 3 4 5
PU This bank/insurance company is faster and easier in terms
of solving my claim. 1 2 3 4 5
PU This bank/insurance company make me to live more
fearless. 1 2 3 4 5
PU My family/friend is so happy when they heard that i have a
life insurance from this bank/insurance company. 1 2 3 4 5
COST It cost a lot to buy insurance. 1 2 3 4 5 COST I think i am saving my money by taking insurance. 1 2 3 4 5 PBC I have the ability to buy insurance. 1 2 3 4 5 PBC I have ability to give the required amount by time to time
for insurance. 1 2 3 4 5
PBC I have the required knowledge to buy insurance. 1 2 3 4 5 ATT Having life insurance is an intelligent decision. 1 2 3 4 5 LOY This bank/insurance company is my first choice 1 2 3 4 5 LOY The next time my friend needs the services of an insurance
i will recommend my bank/insurance company. 1 2 3 4 5
LOY I have no regrets of having patronized my bank/insurance
company in the past. 1 2 3 4 5
LOY I intend to have more life insurance services for my family
using the bank/insurance company in the future. 1 2 3 4 5
SECURITY I feel my life is safer after having life insurance in this
company. 1 2 3 4 5
SECURITY I feel my bank/insurance company will never disclose my
personal information with others. 1 2 3 4 5
Section C: Personal Details
1. Gender Male Female
2. Age 21-30 31-40 41-50 51-60
3. Highest Academic Qualification Completed
Undergraduate 10th 12 th Graduate BBA BA B COM BSc BCA B Tech
Post Graduate MBA MA M COM MSc MCA M Tech Other................ (Please Specify)
4. Current Profession
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Student (PLZ Mention Stream------------) Retired Private Professional Homemaker Self-
employed / Business Government Service Other Please specify _______________
5. Yearly Household/family income (in Rs.) (Not your personal income)
Below 3 lakhs 3 lakhs to 6 lakhs 6 lakhs to 9 lakhs 9 lakhs to 12 lakhs above 12 lakhs