A SUMMER TRAINING PROJECT REPORT on MARKET SURVEY at RELIANCE LIFE INSURANCE CO. MUZAFFARNAGARSubmitted By: Amit Chaudhary 0724970003 For partial fulfillment of the requirements for the award ofDegree of Master of Business Administration (2007-09) Shri Ram College of Management Muzaffarnagar
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A single person alone can never be credited for performing any extraordinary work A single person alone can never be credited for performing any extraordinary work
successfully. It is only possible with the continuous and constant help and guidance thatsuccessfully. It is only possible with the continuous and constant help and guidance that
they receive from others.they receive from others.
This research report too has taken its shape because of the valuable and preciousThis research report too has taken its shape because of the valuable and precious
guidance of our professor. We are gratefully acknowledged.guidance of our professor. We are gratefully acknowledged.
I further personally feel that making of this project provided us with good exposure to theI further personally feel that making of this project provided us with good exposure to the
subject of finance and especially the Indian insurance sector and it was a very goodsubject of finance and especially the Indian insurance sector and it was a very good learning experience.learning experience.
My sincere thanks are also due to Dr. Rahul Goyal (Executive Director) for their My sincere thanks are also due to Dr. Rahul Goyal (Executive Director) for their
significant help extended for the successful completion of the project. I highly the help Isignificant help extended for the successful completion of the project. I highly the help I
got from them in providing me and lot of information regarding the functioning of thisgot from them in providing me and lot of information regarding the functioning of this
organization.organization.
My sincere thanks are also due to Dr. Moh.Arif My sincere thanks are also due to Dr. Moh.Arif (H.O.D. of (H.O.D. of MBA),MBA), for their significantfor their significant
help extended for the successful completion of the project. I highly the help I got fromhelp extended for the successful completion of the project. I highly the help I got from
them in providing me and lot of information regarding the functioning of thisthem in providing me and lot of information regarding the functioning of this
Few men in history have made as dramatic a contribution to their country’s economic
fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left
behind a legacy that is more enduring and timeless.
As with all great pioneers, there is more than one unique way of describing the true
genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot,
the leader of men, the architect of India’s capital markets, the champion of shareholder
interest.
But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth creator.
In one lifetime, he built, starting from the proverbial scratch, India’s largest private sector
enterprise.
When Dhirubhai embarked on his first business venture, he had a seed capital of barely
US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this
fledgling enterprise into a Rs 60,000 crore colossus—an achievement which earned
Reliance a place on the global Fortune 500 list, the first ever Indian private company to
do so.
Dhirubhai is widely regarded as the father of India’s capital markets. In 1977, whenReliance Textile Industries Limited first went public, the Indian stock market was a place
patronised by a small club of elite investors which dabbled in a handful of stocks.
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the
Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading
private sector financial services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance Capital has
interests in asset management and mutual funds, stock broking, life and general
insurance, proprietary investments, private equity and other activities in financial
services.
Anil Ambani's Reliance Life Insurance Company Limited, a subsidiary of RelianceCapital Limited, has concluded a much-awaited deal in the life insurance sector.
Even before selling a single life insurance policy, Reliance Life, a part of the Anil
Dhirubhai Ambani Enterprises, has snapped the Chennai-based private life insurer AMP
Sanmar Life Insurance Company Limited. AMP Sanmar is a 26:74 joint venture between
AMP, Australia and Sanmar group.
Interestingly, only recently, the Reliance Life had approached the Insurance Regulatory
and Development Authority (IRDA) to revive its business license that had been cancelled
by the regulator for non-commencement of business.
Though the three parties to the deal — Reliance Capital, AMP and Sanmar — are
keeping the deal size secret, figures ranging between Rs225-400 crore are being talked
about as being the final price.
What is clear is that Reliance Life has clearly outbid other suitors like Aviva, ICICI
Prudential Life Insurance Company, etc. This acquisition makes Reliance Life the first
private sector life insurer to start business without a foreign partner.
To be recognized as a professional and dependable business entity committed to play a
meaningful role in the development of insurance industry in Pakistan and to safeguard the
legitimate interests of all stakeholders, namely policy-holders, share-holders, reinsures,
employees and all other business associates/partners
MISSIONMISSION
To provide quality service and protection to its clients aiming at achieving a respectable
volume of business and become a prominent player through good governance and sound professionalism focusing to become a well-known and respected Corporate entity in the
eyes of Society and Government.
It has its Registered officeIt has its Registered office
Reliance life insurance launches maiden insurance productReliance life insurance launches maiden insurance product::
Mumbai, august 17: Anil Dhirubhai Ambani group company Reliance Life Insurance
today announced the life launch of Reliance connect 2 life plan, its first product since
acquiring the life insurance business of AMP Sanmar in October last.
Reliance connect 2 life is a 15-year insurance - cum – savings
Plan for individuals in the age group of 18 to 45 years with a minimum sum assured of
Rs.1 lakh. The insurance cover can be upgraded in the second and third year up to a sum
of Rs. 10 lakh.
“Reliance connect aims to provide products that makes life insurance hassle-free and the
policy can be upgraded to keep place with individual lifestyle, said Reliance life
insurance’s chief Executive offices P.Nandagopal.
Reliance life insurance has 30,000 insurance advisors spread over 158 branches across
143 locations & a call center to service its customer.
HDFC and UT bank would act as a collection network. The company is in the final stages
of negotiation with banks for selling its products through the banc assurance channel.
The company plans to add another 10,000 to 12,000 advisors, who are under training,
said Nandagopal.
Reliance capital has infused Rs.166crore in Reliance life insurance, which has a capital base of Rs.383 crore and employee strength of 3,654 including 822 employee of AMP
It takes a lot for a dream to become a reality. And money is surely one of them.Reliance endowment plan gives you just the financial independence to realize your
dreams in the future. It lets you decide how much you would like to set as your sum
assured based on your current financial position and your expected future expenses.
KEY FEATUREKEY FEATURE::
1. On maturity receive sum assured plus bonuses.
2. Wealth creation through bonus addition.
3. More value for your money by way of high sum Assured Rebate.
4. Increase, your insurance protection by adding term cover.
5. Choose to pay regular or single premium.
How does this plan work?How does this plan work?
You pay premium every year for the entire term & get sum Assured plus accumulated
bonuses. On death, your beneficiary will get the sum Assured plus accumulated bonuses.
If an employee becomes disabled, as defined by us then the benefit above is
accelerated and paid out in 5 equal annual installment.
No further benefit is payable subsequently.
No benefits are payable on survival to the end of the year.
What options are available?What options are available?
You can choose:
• Whether or not to provide the benefit on disablement.
• Whether or not you wish to benefit from experience in your policy.
• Whether or not to give your employees the choice of continuing their cover
with us under an individual policy.
What is the benefit from experience in the policy?What is the benefit from experience in the policy?
At the end of every 3-policy period, under the basis specified below, we will investigate
the claims experience under this policy. That investigation may lead us to decide that anexperience refund is due. If we declare that an experience refund is due, we will adjust it
against the premium due for the next policy period.
Experience refund = x% of (y% premiums-claims including an allowance for incurred but
not reported claims)-losses carried forward from the previous period, if any. Refer table
You always loved your family. As a loving person you also Wanted to be rest assured in
the knowledge that they will be happy, even if something were to happen to you. With
reliance whole life plan you can be sure that your family will receive that timely financial
support they need. Go ahead, live your today to the fullest without a worry about
tomorrow.
KEY FEATURESKEY FEATURES:
•
Insurance protection till age 85.• Choose to extend your insurance coverage till age 99.
• Convenient premium payment term wealth creation through bonus additions.
• More value for your money by way of high sum assure rebate.
• Get sum assured plus bonuses in case of your unfortunate death.
How do this plan work?How do this plan work?
You pay premium every year for desired premium paying term. You get sum assured plus bonuses on reaching age 85. You choose to continue with the insurance cover until the
age of 99 and the policy will continue to participate in profits till then. On death, your
beneficiary will get the sum assured plus accumulated bonuses.
THE INSURANCETHE INSURANCE REGULATORY ANDREGULATORY AND
DEVELOPMENT AUTHORITY
Reforms in the insurance sector were initiated with the passage of the IRDA Bill in
parliament in December 1999. The IRDA since its incorporation as a statutory body in
April 2000 has fastidiously stuck to its schedule of framing regulations and registering
the private sector insurance companies.
The other decision taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies was the launch of the
IRDA’s online service for issue and renewal of licenses to agents.
The approval of institutions for imparting to agents has ensured that the insurance
companies would have a trained workforce of insurance agents in place to sell their
products, which are expected to be introduced by early next year.
Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general
Since the earliest time, human kind’s most earnest desire has been to leave something for
posterity. Be it learning or material possession, our memory lives in what we leave
behind.
It is in this very need that there lies the origin of life insurance. After independence near
about 209 Life Insurance companies were doing business worth Rs. 712.76 crore. The
first Indian-owned life insurance company, the Life Assurance Society, was set up in
1870 by six friends. It insured Indian lives at the normal rates instead of charging a
premium of 15 to 20 percent as foreign insurers did. But today the concept has really
changed. Today Life Insurance protects the economic vale of a human life for the benefit
of those who are financially dependent on it. It has now started ensuring peace of mind
and quality of life to million of families.
LIFE INSURANCE IN INDIA
Life Insurance in its existing form came to India from the United Kingdom with the
establishment of a British firm Oriental Life Insurance Company in Calcutta in 1818followed by Bombay Life Assurance Company in 1823. The Indian Life Assurance
Companies Act, 1912 was the first statutory measure to regulate life insurance business.
Later in 1928 the Indian Insurance Companies Act was enacted to enable the Government
to collect statistical information about both life and non-life insurance business transacted
in India by Indian and foreign insurers including provident insurance societies. In 1938
with a view to protecting the interest of insuring public earlier legislation was
consolidated and amended by the Insurance Act 1938 with comprehensive provisions
detailed and effective control over the activities of insurers. The Act was amended in
1950 resulting in far reaching changes in the insurance sector. These included a statutory
requirement of equity capital for companies carrying on life insurance business, ceiling
on share holdings in such companies, stricter control on investments, submission of
periodical returns
relating to investments and such other information to the controller. The controller could
also call for appointment of administrators and put a ceiling on expenses of management
and agency commission for mismanaged companies. By 1956, 154 Indian insurers, 16
foreign insurers and 75 provident societies were carrying on life insurance business in
India. Life insurance business was
concentrated in urban areas and confined to the higher strata of the society. On January19, 1956, the management of life insurance business of 245 Indian and foreign insurers
and provident societies then operating in India was taken over by the Central
Government. Life Insurance Corporation was formed in September 1956 by an Act of
Parliament, viz. LIC Act 1956 with a capital contribution of Rs.50 mn.
HISTORY OF INSURANCE IN INDIA
Insurance in India has been under public sector for over four decades. Life Insurance was
nationalized way back in 1956 by merging 245 private insurance companies thus forming
Life Insurance Corporation (LIC) of India. Similarly after nationalisation of general
insurance in 1972, General Insurance Corporation (GIC) was formed by merging 106
private insurance companies. General Insurance Corporation currently has four subsidiary
companies operating in India. When the insurance industry was nationalised, it was
considered a landmark and a milestone on the way to the socialistic pattern of society that
India had chosen after independence.
But now four decades after the Insurance sector was nationalised, the nationalised sector
companies could not cater to the Indian market to cover its entire potential. so the main
1. To provide for proper back ups if there is any unforeseen economic shocks.
2. To make sure there is a win-win situation for both the common man and the industry
players.
The other reasons for opening up the insurance sector to the private insurers are as
under:
1. To provide better Insurance coverage to Indian citizens.
2. To augment the flow of long-term financial resources to finance the growth of
Infrastructure.
3. The Public Sector Insurance Companies had not succeeded in extending the insurancecover to all the needy people of the country due to various reasons. Hence this onerous
responsibility now has been entrusted to the private insurers.
4. Penetration of Insurance: LIC and GIC could not ensure very fast growth of insurance
in India even in a long period extending over four decades. Hence the penetration of
insurance is very low in India. The following indices as explained will indicate and
support this contention:
While per capita insurance premium in developed countries is very high, it is quite low in
India. For instance, per capita insurance premium in India in 1999 was only $8 while it
was $4800 for Japan, $1000 for Republic of Korea, $887 for Singapore, $823 for Hong
Kong and $144 for Malaysia.
Similarly the penetration of insurance is also assessed by the ratio of the insurance
premium to the Gross Domestic Product (GDP) in a country. While insurance premium
as a percentage of GDP was 14% for Japan, 13% for South Africa, 12% for Korea, 9%
for UK and France, it was only around 2% in India in 1999. Hence the penetration of
insurance is low here.
The penetration of insurance is also assessed by a ratio of the insurance premium to the
Gross Domestic Savings (GDS). While the insurance premium as a percentage of GDS
was 52% for UK, 35% for other European and American countries, it was only 9% in
We have discussed what the needs are at present to go for the insurance sector reforms.
But before going in for the reforms we must make our objectives very clear as to what wewant to achieve through these reforms. The vision should be quite clear and the plans
should be chalked out having a long-term perspective in mind. To be very fair, Indian
plans do lack in this feature and we do suffer from planning myopia.
It is very essential to chalk out the objectives of any reforms. This has two basic reasons :
To provide for proper back ups if there is any unforeseen economic shocks.
To make sure there is a win-win situation for both the common man and the industry
players.
THE OBJECTIVES OF THE REFORMS ARE AS FOLLOWS:
1. To provide better coverage to the Indian citizens
2. To augment the flow of long term financial resources to finance the growth of the
infrastructure.
3. To substantiate for the major faults that the government owned insurance firms
has committed.
4. To speed up the faster rate of penetration by the insurance firms in India which is
not very much compared to other countries.
5. To make the private players responsible to the investors and not to the
government.
6. To increase the competition in this sector so that the common people has the
advantage of enjoying quality services at a reasonable cost
7. Insurance has a far reaching effect in synchronizing between the various service
sectors. So if this sector can grow , the prospects of the various other service
New players need to recognize the limitations of their rival and decide upon the right
mix of distribution channels in their business. Insurance sector has always been volatile
right from the very beginning. As private players are entering into the Indian market, the
competition has become very stiff. Today a lot of companies are there is the market with
their products. The common consumer is under dilemma to decide to go for which
company.
The Reliance Life Insurance is also one among these private players. The project with
Reliance Life Insurance deal with the market survey of Life Insurance Policy. In today’s
world, one can hardly find a person without a life insurance policy. The project helps tofind out that which company policy is most prevalent in the market and what was the
reason of purchase. It also helps to find out which is the most prevalent insurance plan in
the market. The project is also concerned about finding the awareness level of ING
Vysya Life Insurance is the market.
At last the project suggests some recommendation to the organization which is the
malgamating and liquidating insurance companies. It was in 1956 that Life Insurance was
nationalized followed by General Insurance in 1972.
In the aftermath of nationalization much of the powers of the Controller of Insurance
were abridged for operational convenience of state owned LIC and GIC. Meanwhile great
developments were taking place around the world due to strong possibilities offered by
insurance sector to the geopolitical and politico-economical systems in the new global
order. In 1993, a new committee was constituted. Review of insurance regulations started
only with the Malhotra Committee of reforms constituted in April 1993. Unlike Financial
Sector Reforms Committee who had the only choice of determining the phase of reforms
to align with the internationally accepted Basle provisions under the aegis of Bank of
International Settlement (BIS), Malhotra Committee had a real brainstorming at hand.
Insurance order of the world has no unique pattern. The committee recommendationswere the prudence of that day and a few of the suggestions were economically enticing
for the regimented political outfit of the country.
Now that the gates have opened and foreign insurance companies are allowed to
participate in the Indian insurance market there are experiments and experiences of all
hues. India has adopted one of them based on its politico-economics dynamics. Indian
market expects a continuation of trend in companies to expand their horizons beyond
domestic borders. This is true both in terms of expansion plans by domestic companies
and in the acquisition of insurance companies by foreign concerns. Insurance investors
from developed economies, particularly in Western Europe and the US find some foreign
markets as having greater growth potential than their domestic markets. Therefore, a high
level of interest exists for these companies to acquire insurance concerns. IRDA has torecognize this global trend and act prudentially for India. India is already moving up from
the foothill of globalization in insurance industry. Of course the initial expectation that
IRDA will be inundated with insurance license applications from the Joint Ventures (JV)
formed by domestic
and foreign companies has not happened. A part of the phenomenon is explained by bad
understanding of the tenets of Joint Venture formation but major business sense may be
lying in becoming a more equipped second fast-mover. Whichever way the business
moves from now on life in insurance industry can never be the same again in India.
Subjective prudence of the lawmaker and the regulator of the day mark the stipulated
stake of only 26 percent of the equities by the foreign partners in any insurance JV. The
prudential perception may change with time and persons. But for the present we have to
live with the provisions. As the experience is well dispersed in the contiguous
geographical area, we cannot distinguish one set of prudence from the other for the time
being. Even the recently amended IRA Bill provides enough room for foreign
participation. Already a handful of entrants have taken place and more are expected in the
near future. A bunch of mergers are also in the queue.