A COMPREHENSIVE PROJECT REPORT

ON
“Factors Affecting Consumer Purchase Decision of Laptops”

Prepared By
Anil Rukeja (097440592016) & Umesh Thawani (097440592035)
M.B.A. Sem – 4 Marketing

Academic Year
2009 - 2011

Submitted To
Gujarat technological University

Submitted For
Partial fulfillment for the award of the

Master in Business Administration (MBA)

Guided By
Mr Nilesh Limbasiya

R K COLLEGE OF BUSINESS MANAGEMENT (RKCBM)

Affiliated with Gujarat Technological University - MBA Program
Recognized by All India Council for Technical Education (AICTE)
Kasturbadham, Rajkot-Bhavnagar Highway, Rajkot-360020
 DECLARATION

We, ANIL C. RUKEJA & UMESH THAWANI, student of R.K. COLLEGE OF BUSINESS
MANAGEMENT, RAJKOT hereby declare that the project work presented in this report is my
own work and has been accomplished under the supervision of Mr. NILESH LIMBASIA of
M.B.A. DEPARTMENT, R.K. COLLEGE OF BUSINESS MANAGEMENT, Gujarat
Technological University.

The report has not been previously submitted to any other university for any other examination.

DATE:

PLACE:

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 PREFACE
A man without practical knowledge is just like a rough diamond. To shine like a real diamond
one must have practical exposure of what he has learnt. For the students of management
theoretical knowledge is just like lock without key so practical knowledge is of so much
important.

It is quite true that world outside; your cozy home is many times quite different from what you
have perceived. Similarly it is possible that theoretical knowledge acquired in the classroom may
differ from the practical knowledge.

Practical knowledge is the best experience and on this basis, we can easily understand about
what they want to say. Firstly each student knows about the theory, so that on the basis of
theory, he can easily learn how to do the work and what is the best way to achieve satisfaction.
That is why we can say that theory is guidelines for practical.

As a curriculum part of course of M.B.A., I have taken my practical training and conducted a
research project at SHRIRAM LIFE INSURANCE CO. LTD.

It is my pleasure to present this project work after I had finished my 45 days of training at
SHRIRAM LIFE INSURANCE CO. LTD. This training has expanded my horizon of
knowledge in practical as well as theoretical, which is vital for student in management level
studies. Only the basic understanding of the principles of management is not sufficient but their
application is also equally important.

Such type of training promotes a student to boost his potentialities and the inner qualities and
thereby students come to know about how the theoretical knowledge works in actual sense in any
unit. And this has indeed proved to be very useful to students.

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 ACKNOWLEDGEMENT

I am heartily thankful to Shriram Life Insurance Co Ltd., which gave me an opportunity to

take training in the company.

I am also very thankful to Mr. Prashant Namdeo Regional Manager, Rajkot, and Mr. Mehul
Dodiya for their kind support and valuable guidance.

I am also thankful to my professors and especially to my project guide Ms. Varsha Virani She
had guided me a lot during the summer training and also to Director of R.K College of Business
management Dr. N.M.Khandelwaal.

At last, I am grateful to all those respondents without whose co-operation my research would
have not been completed.

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 EXECUTIVE SUMMARY

I feel pleasure to present this project report as a part of curriculum of M.B.A. course. The
objective of this research project is to know the consumer awareness of Shriram Life Insurance
Company Ltd. This research project with Shriram Life has been very informative and
inspirational.

For this project the random respondents are taken various areas of Rajkot. I had to meet them and
to collect information through structured questionnaire by taking interview of responsible person
in the respondent companies. I visited 50respondents of Rajkot and gathered information about
this project.

Consumer awareness of Shriram Life is present among the people of Rajkot. However it is quite
lower than the public sector general insurance companies.

From this research project the awareness level of consumer about Shriram Life Insurance is
known which would be helpful to the company

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 INDEX
No Content Page No
1 OVERVIEW OF INDUSTRY
1.1 History of insurance 8
1.2 Introduction to Insurance Sector 11
1.3 Reforms of Insurance Sector 13
1.4 What is Insurance? 15
1.5 Functions of Insurance 16
1.6 Life Insurance 19
1.7 Life Insurance Scenario In India 23
1.8 Current Status 25
1.9 Insurance Regulatory Authority 27
2 COMPANY INFORMATION
2.1 Introduction to Shriram Life Insurance 30
2.2 Joint Venture with Sanlam Group 31
2.3 Vision of the Company 32
2.4 Functional Departments
2.4.1 Finance Department 33
2.4.2 Marketing Department 35
2.4.3 Human Resource Department 37
2.5 Products 41
2.6 Major Players In Life Insurance 43
2.7 SWOT Analysis 44
3 RESEARCH METHODOLOGY
3.1 Introduction to Research Topic 46
3.2 Research Problem 47
3.3 Literature Review 48
3.4 Rationale of the Study 50
3.5 Hypothesis 51
3.6 Source of Data 51
3.7 Research Instrument 51
3.8 Sampling Process 51
3.9 Scope of the Study 52
3.10 Limitation 52
4 RESULTS AND INTERPRETATION 53
5.1 FINDING AND RECOMMENDATIONS 69
5.2 CONCLUSION 71
6 LEARNING FROM SIP 73
Bibliography 75
Appendix
Questionnaire 77

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OVERVIEW OF INDUSTRY

7
 “DISTRIBUTION CHANNELS OF INSURANCE SECTOR"

INTRODUCTION

Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. While
it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or
interest arising out of an unforeseen contingency, insurance is a method or process which
distributes the burden of the loss on a number of persons within the group formed for this
particular purpose.Basic Human trait is to be averse to the idea of risk taking. Insurance, whether
life or non-life, provides people with a reasonable degree of security and assurance that they will
be protected in the event of a calamity or failure of any sort.Insurance may be described as a
social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance,
a large number of people associate themselves by sharing risks attached to individuals. The risks,
which can be insured against, include fire, the perils of sea, death and accidents and burglary.
Any risk contingent upon these, may be insured against at a premium commensurate with the
risk involved. Thus collective bearing of risk is insurance.

INSURANCE INDEMNIFIES ASSETS & INCOME

Every Asset has a value and generates Income to its Owner. There is a normally expected Life-
time for the Asset during which time it is expected to perform. If the Asset gets lost earlier,
being destroyed or made Non-functional through an Accident or other unfortunate event the
Owner is Prejudiced. Insurance helps to reduce CONSEQUENCES of such Adverse
Circumstances which are called Risks.

INSURANCE IS THE SCIENCE OF SPREADING OF THE RISK

It is the system of spreading the losses of an Individual over a group of Individuals

INSURANCE IS A METHOD OF SHARING OF FINANCIAL LOSSES

Of a few from a common fund formed out of Contribution of the many who are equally exposed
to the same loss.What is uncertainty for an Individual becomes a certainty for a Group. This is
the basis of All Insurance Operations. Thus insurance convert uncertainties to certainty

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THE HISTORY OF INDIAN INSURANCE INDUSTRY

Life Insurance

In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life
Insurance Company. First attempts at regulation of the industry were made with the introduction
of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were
made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the
power given to the Government to collect statistical information about the insured and the high
level of protection the Act gave to the public through regulation and control. When the Act was
changed in 1950, this meant far reaching changes in the industry. The extra requirements
included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in
such companies to prevent dominant control (to protect the public from any adversarial policies
from one single party), stricter control on investments and, generally, much tighter control. In
1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was
heavily concentrated in urban areas and targeted the higher echelons of society. “Unethical
practices adopted by some of the players against the interests of the consumers” then led the
Indian government to nationalize the industry. In September 1956, nationalization was
completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It
was felt that “nationalization has lent the industry fairness, solidity, growth and reach.”

Some of the important milestones in the life insurance business in India are:1912:

The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.

1928:

The Indian Insurance Companies Act enacted to enable the government to collect statistical
information about both life and non-life insurance businesses.

1938:

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Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.

1956:

The market contained 154 Indian and 16 foreign life insurance companies.

GENERAL INSURANCE

The General Insurance industry in India dates back to the Industrial Revolution and the
subsequent increase in trade across the oceans in the 17th century. As for Life Insurance, the
British brought General Insurance to India, and a similar path was followed in the development
of this industry. A number of private companies were in existence for years and years until, in
1971, the Indian Government decided that the public interest would be served by nationalizing
the industry, merging all the 107 companies into four companies, depending on the sort of
business transacted (Marine, Fire, Miscellaneous). These were the National Insurance Company
Ltd., the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and the
United India Insurance Company Ltd. located in Calcutta, New Delhi, Bombay and Madras
respectively. The General Insurance Corporation (GIC) was set up in 1972 as a ‘holding’
company, having these four companies as its subsidiaries.

Some of the important milestones in the general insurance business in India are:1907: The

Indian Mercantile Insurance Ltd

. set up, the first company to transact all classes of general insurance business.

1957: General Insurance Council

, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct
and sound business practices.

1968:

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The Insurance Act amended to regulate investments and set minimum solvency margins and the
Tariff Advisory Committee set up.

1972:

The General Insurance Business (Nationalization) Act, 1972 nationalize the general insurance
business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into
four companies viz.

the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd. and the United India Insurance Company Ltd

. GIC incorporated as a company.

PRESENT SCENARIO IN THE INSURANCE SECTOR

Present scenario

There are currently 57 insurance companies in India, of which 46 are from the private sector.
There are 24 life insurance and 33 non-life insurance companies in India. The major names in the
sector are:

Life insurance:

Life Insurance Corporation (LIC)

HDFC Standard Life

SBI Life Insurance

ICICI Prudential Life Insurance

Non-life insurance:

New India Assurance

United India Assurance

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National Insurance Company

ICICI Lombard

Oriental Insurance Company

Bajaj Allianz

The market share of private sector players has increased over the years. In the non-life insurance
sector, private companies had a market share of 54.68 % in FY 19 (as of Jan ‘19). In the life
insurance sector, private companies had a market share of 33.74 % in FY 19 (as of Jan ‘19).

Insurance Industry

Market size

The overall market for insurance is expected to be $ 280 bn by 2020.

Gross premiums in India reached $ 94.48 bn in FY 18. Of this number, the split between life
insurance and non-life insurance was as follows:

Life insurance: $ 71.1 bn

Non-life insurance: $ 23.38 bn

Recent developments in the sector:

The last few years have seen a lot of activity in the sector. This is a testament to the vibrancy of
the industry in India. Here are a few examples from different categories of deals/ developments:

Strategic deals: HDFC ERGO General Insurance Co. is in talks to acquire Apollo Munich Health
Insurance (Reported valuation: $ 370 mn)

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Financial investors: A consortium of private equity firms- Westbridge Capital and Madison
Capital, as well as billionaire investor Rakesh Jhunjhunwala, are in discussions to acquire over
90% stake in Star Health and Allied Insurance. (Estimated deal size: $ 1 bn)

Initiatives by non-sector players: Indian e-commerce giant Flipkart has tied up with Bajaj Allianz
General Insurance to provide customised insurance products for mobile phones sold on Flipkart.

New product offerings: HDFC ERGO launched a new product called E@Secure: a cyber
insurance policy to protect individuals and families from cyber-attacks.

Growth of Insurance Sector in India

Future outlook and Growth drivers:

The insurance industry in India is expected to register healthy, consistent growth based on the
following drivers:

1. Low insurance penetration in India: 3.69% (2017), compared to 6.3% globally (2016)

2. Government programs to increase insurance cover: Pradhan Mantri Suraksha Bima Yojana,
Pradhan Mantri Jeevan Jyoti Bima Yojana, Ayushman Bharat etc

3. Strong growth in the automotive industry is expected to boost motor insurance

4. Increasing interest in buying insurance; rising internet usage has contributed to this
increasing interest

5. Innovative products like Unit Linked Insurance Plans (ULIPs) have contributed to the
growth of insurance cover.

6. New distribution channels such as bancassurance, online distribution and NBFCs are
contributing to the growth in insurance cover
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Government initiatives / policies

1. Foreign Direct Investment (FDI) limit for the insurance sector increased from 26% to 49%.

2. Life insurance companies operational for 10+ years are now allowed to go public by IRDA

3. Government plans to divest a significant stake in PSU general insurance companies in order
to execute the steep disinvestment target

4. Several flagship schemes have been launched by the government to boost the insurance
sector.

Flagship schemes:

• Pradhan Mantri Jan Suraksha Bima Yojana: This scheme focuses on providing affordable
insurance to people below the poverty line, in rural areas

• Pradhan Mantri Jeevan Jyoti Bima Yojana: This initiative provides life insurance for people
employed in the unorganised sector

• Atal Pension Yojana: This guarantees pension Coverage to all citizens in the unorganised
sector who join the National Pension System (NPS)

• Ayushman Bharat Yojana: Each beneficiary family will receive medical insurance cover of
INR 5 lakh, which they can use to get treatment at public or private hospitals.

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

•Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the
message of life insurance in the country and mobilise people’s savings for nation-building
activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta,
Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in
important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the

14
country.The Corporation also transacts business abroad and has offices in Fiji, Mauritius and
United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely,
Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited,
Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered
into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension
policies in U.K.In 1995-96, LIC had a total income from premium and investments of $ 5 Billion
while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew
at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia
(3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five
million people living below the poverty line, with 50 per cent subsidy in the premium rates.
LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global
average of 40 per cent. Compounded annual growth rate for Life insurance business has been
19.22 per cent per annum

•General Insurance Corporation of India (GIC)

The general insurance industry in India was nationalized and a government company known as
General Insurance Corporation of India (GIC) was formed by the Central Government in
November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers
which were operating in the country prior to nationalization, were grouped into four operating
companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance
Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United India Insurance
Company Limited. (However, with effect from Dec'2000, these subsidiaries have been de-linked
from the parent company and made as independent insurance companies). All the above four
subsidiaries of GIC operate all over the country competing with one another and underwriting
various classes of general insurance business except for aviation insurance of national airlines
and crop insurance which is handled by the GIC.Besides the domestic market, the industry is
presently operating in 17 countries directly through branches or agencies and in 14 countries
through subsidiary and associate companies.

IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN

PERMITTED TO ENTER INTO INSURANCE BUSINESS: -
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The introduction of private players in the industry has added to the colors in the dull industry.
The initiatives taken by the private players are very competitive and have given immense
competition to the on time monopoly of the market LIC. Since the advent of the private players
in the market the industry has seen new and innovative steps taken by the players in this sector.
The new players have improved the service quality of the insurance. As a result LIC down the
years have seen the declining phase in its career. The market share was distributed among the
private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures
of these private players are enough to give more competition to LIC in the near future. LIC
market share has decreased from 95% (2002-03) to 82 %( 2004-05).

1. HDFC STANDARD LIFE INSURANCE COMPANY LTD

.HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life insurance
companies, which offers a range of individual and group insurance solutions. It is a joint venture
between Housing Development Finance Corporation Limited (HDFC Ltd.), India’s leading
housing finance institution and The Standard Life Assurance Company, a leading provider of
financial services from the United Kingdom. Their cumulative premium income, including the
first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005.
They have managed to cover over 11, 00,000 individuals out of which over 3, 40,000 live have
been covered through our group business tie-ups.

2.MAX NEW YORK LIFE INSURANCE CO. LTD.

Max New York Life Insurance Company Limited is a joint venture that brings together two large
forces - Max India Limited, a multi-business corporate, together with New York Life
International, a global expert in life insurance. With their various Products and Riders, there are
more than 400 product combinations to choose from. They have a national presence with a
network of 57 offices in 37 cities across India.

3. ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier
financial powerhouse and Prudential plc, a leading international financial services group

16
headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector
insurance companies to begin operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). The company has a network of about
56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups.

4. OM KOTAK MAHINDRA LIFE INSURANCE CO. LTD.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra
Bank Ltd. (KMBL), and Old Mutual plc.

5. BIRLA SUN LIFE INSURANCE COMPANY LTD.

Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life
financial Services of Canada.

TATA AIG LIFE INSURANCE COMPANY LTD.

SBI LIFE INSURANCE COMPANY LIMITED

ING VYSYA LIFE INSURANCE COMPANY PRIVATE LIMITED

ALLIANZ BAJAJ LIFE INSURANCE COMPANY LTD.

METLIFE INDIA INSURANCE COMPANY PVT. LTD.

AMP SANMAR ASSURANCE COMPANY LTD.

DABUR CGU LIFE INSURANCE COMPANY PVT. LTD

1.ROYAL SUDRAM ALLIANCE INSURANCE COMPANY LIMITED

this joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance
Limited started its operations from March 2001. The company is Head Quartered at Chennai, and
has two Regional Offices, one at Mumbai and another one at New Delhi.

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2. BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited
and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj
Allianz General Insurance received the Insurance Regulatory and Development Authority
(IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business
(including Health Insurance business) in India. The Company has an authorized and paid up
capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG,
and Germany.

3. ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED

ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank
Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's
second largest bank; while Fairfax Financial Holdings is a diversified financial corporate
engaged in general insurance, reinsurance, insurance claims management and investment
management.Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is
one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance
Company received regulatory approvals to commence general insurance business in August
2001.

4. CHOLAMANDALAM GENERAL INSURANCE COMPANY LTD.

Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the

Murugappa Group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and
has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a
pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore,
Mumbai, Pune, Indore, Ahmedabad, Delhi, Chandigarh, Kolkata and Vizag.

5. TATA AIG GENERAL INSURANCE COMPANY LTD.

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Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata
Group and American International Group, Inc. (AIG). Tata AIG combines the strength and
integrity of the Tata Group with AIG's international expertise and financial strength. The Tata
Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per
cent stake.Tata AIG General Insurance Company, which started its operations in India on
January 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.

6. RELIANCE GENERAL INSURANCE COMPANY LIMITED.

7. IFFCO TOKIO GENERAL INSURANCE CO. LTD
8. EXPORT CREDIT GUARANTEE CORPORATION LTD.
9. HDFC-CHUBB GENERAL INSURANCE CO. LTD.

MARKET SHARE OF TOP 10 INSURANCE COMPANIES:

•LIC (Life Insurance Corporation of India) still remains the largest life insurance company
accounting for 64% market share. Its share, however, has dropped from 74% a year before,
mainly owing to entry of private players with innovative products and better sales force.

•ICICI Prudential Life Insurance Co Ltd is the biggest private life insurance company in India. It
experienced growth of 58% in new business premium, accounting for increase in market share to
8.93% in 2007-08 from 6.97% in 2006-07.

•Bajaj Allianz Life Insurance Co Ltd has reported a growth of 52% and its market share went up
to 6.98% in 2007-08 form 5.66% in 2006-07. The company ranked second (after LIC) in number
of policies sold in 2007-08, with total market share of 7.36%.

•SBI Life Insurance Co Ltd in terms of new number of policies sold, the company ranked 6th in
2007-08. New premium collection for the company was Rs 4,792.66 crore in 2007-08, an
increase of 87% over last year.

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•Reliance Life Insurance Co Ltd Total collected was Rs 2,792.76 crore and its market share went
up to 2.96% from 1.23% a year back. It now ranks 5th in new business premium and 4th in
number of new policies sold in 2007-08.

•HDFC Standard Life Insurance Co Ltd with an income of Rs 2,680 crore in FY 2007-08,
registering a year-on-year growth of 64%. Its market share is 2.88% and it ranks 6 th among the
insurance companies and 5th amongst the private players.

•Birla Sun Life Insurance Co Ltd market share of the company increased from 1.22% to 2.11%
in 2007-08. The company moved to the 7th position in 2007-08 from 8th a year before, pushing
down Max New York Life insurance company.

•Max New York Life Insurance Co Ltd has reported growth of 73% in 2007-08. Total new
business generated was Rs 641.83 crore as against Rs 387.51 crore. The company was pushed
down to the 8th position from 7th in 2007-08.

•Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2007-08, the company reported
growth of 80%, moving from the 11th position to 9th. It captured a market share of 1.19% in
2007-08. Last year the company doubled its branch network to 150 from 74.

•Aviva Life Insurance Company India Ltd ranking dropped to 10th in 2007-08 from 9th last
year. It has presence in more than 3,000 locations across India via 221 branches and close to 40
bancassurance partnerships. Aviva Life Insurance plans to increase its capital base by Rs 344
crore. With the fresh investment, total paid-up capital of the insurer would go up to Rs 1,348.8
crore

MARKETING OF INSURANCE IN INDIA

Insurance is in a manner of speaking the last frontier in the financial sector to open. It is also a
sector, which leads to benefits across the full spectrum, from the individual who now have wider
choices, to the economy, which see increased savings, to the infrastructure sector, which can
20
look forward to long term funding being available. In an under-insured economy, newer channels
of distribution have to be utilized to intensify the reach of insurance both in urban and rural
markets. This will create huge employment opportunities not only within insurance companies
but also as agents and consultants of insurance companies.

Marketing Mix Policies

Different companies can choose to position themselves differently and hence the Marketing Mix
is different. However, there are certain common characteristics that one can cull out from the
possible strategies that companies adopt.

Product:

The development of flexible products to suit individual requirements is what will differentiate
the winners from the also-rans. The key to success is in providing insurance solutions, not
standardized insurance products. The concept of riders/optional benefits has already been a huge
innovation brought about by the new players, which has led to customization of products for
individual needs. However, companies may differentiate themselves on the basis of product
segments that they choose to focus on and excel in.

Place:

Different companies may however choose different channels and different geographies to focus
on. The channel options are - tied agency force, corporate agents and brokers and this is an area
where different companies will make different choices. Many companies like HDFC Standard
Life are focusing on all channels whereas companies like Max New York Life are focusing on
the tied agency force only. Customer interface will be a key challenge for life insurance
companies and includes every that interaction that the customer has with the company, such as
sales, new business underwriting, policy servicing, premium payments, claim processing and so
on. Technology can play a crucial role in delivering the highest standards of service set by the
company and it will be imperative for any serious player to excel in all of these.

Price:

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Price is a relevant differentiator only in two segments - pure term insurance and in pure
annuities. Here too, service delivery and financial strength will need to be present at a minimum
acceptable level for price to be a relevant differentiator. In case of savings oriented products,
long-term returns generated are more relevant than just the price of the product. A focus on
generating good investment performance and keeping a tight control on costs help in generating
good long-term maturity value for customers. Norms have been laid down on all of these by
IRDA and adhering to these while delivering good returns will be a challenge.

Promotion and Advertising:

The level of demand is latent and will have to be activated considerably. The market needs to be
developed. Greater awareness of insurance and the need to have it as a protection tool rather than
as a tax planning measure needs to be appreciated by the Indian people. Various communication
tools including advertising, direct marketing and road shows contribute to all this and different
companies take different approaches on these.

Process: Cashless settlement:

One of the most defining and customer-friendly changes that we’ve seen in recent years relates
to the way claims settlements are made. The advent of the third-party administrator (TPA)
regime has facilitated the transition to the hugely convenient era of cashless settlement of health
and auto insurance claims. TPAs are entities who process claims on behalf of insurers: the IRDA
licenses them after it is satisfied that they have the financial strength, the trained manpower, the
infrastructure and the skills to undertake this activity. Likewise, with auto insurance, the TPA
ties up with garages and authorized service centers for cashless settlement of auto insurance
claims.

Lower premiums:

The spirit of competition and the broadening of the risk experience of insurance companies have
contributed to a fall in premiums over the years. That’s because, other things being equal, an
insurer who covers the lives just of 10 people bears a higher risk than an insurer who covers the
lives of, say, 100 people. Further, a broader base will provide greater efficiencies on costs such

22
as distribution, management and claims. A broad basing of the mortality experience, therefore,
gives insurers the elbowroom to compete by lowering premiums, and that trend is expected to
continue.

Premium payment flexibility:

Insurers have imparted certain flexibility to premium payment options in order to address this
concern. For instance, one now have the option to pay your premiums upfront, which is then
carried forward for the tenure of the policy. The yearly premiums are drawn from the initial
corpus. Insurers have also introduced the concept of ‘automatic cover maintenance’ to protect
your policy from lapsing owing to your omission to pay your premium on time. Under this, in
the event of your not paying the premium, the insurer dips into your investment account to the
extent of the premium. Of course, this comes with an in-built drawback: your investment portion
diminishes year on year to the extent of the amount paid to cover your risk.

Physical Evidence:

This can play a significant role for marketing in the Indian scenario. Since Internet users are
comparatively lesser than countries such as US, the offline mode will be preferred in India.
Although the distribution model is largely agent-based, wherever the customer is in contact with
the company, this factor can play a significant role in luring the customer.

People:

The most important factor that materializes sales and maintains customer relationships on a long-
term basis is this factor. No matter what distribution strategy a company adopts, customer
relationship has to be taken care of in order to maintain the customer base on a long-term basis.

DISTRIBUTION CHANNELS IN INSURANCE SECTOR:-

23
An insurance cover is an intangible product evidenced by a written contract known as the
‘policy’. Insurers market various insurance covers either directly or through various distribution
Channels—individual agents, corporate agents (including Bancassurance) and Brokers. The
marketer in the distribution network is in direct interface with the prospect and the customer.Life
insurance products are sold through individual agents and many of them have this as their only
career occupation. General insurance products are sold through individual agents, corporate
agents and brokers.Distribution channels such as agents are licensed by the IRDA. To get an
agency license, one has to have certain minimum qualifications; practical training in insurance
subjects and pass an examination conducted by the Insurance Institute of India.IRDA regulations
on licensing of agents/brokers lay down the code of conduct for individual agents, corporate
agents and brokers. A separate note on the code of conduct is appended to this note.Thus it is
seen that the dos and don’ts for these intermediaries are given clearly at the point of sale as well
as in the event of a claim. Service does not end with the customer receiving his document; it in
fact only begins here. After sales service is as important or even more important – like when a
refund has to be made or when a claim has to be made.One of the issues that is of great concern
affecting professionalism in insurance activities is resorting rebating by intermediaries. Rebating
is prohibited as per Section 41 of the Insurance Act, 1938 and the public are advised not to deal
with intermediaries offering rebate of any kind.

Rebating means a share of commission receivable by the agent/broker is given to the

prospect/client. This is done to attract the client in the purchase of insurance contract by offering
cash. Competition among agents/brokers is so cut-throat, some agents indulge in such unethical
practices. Public are advised not to ask for any prohibited rebates in premium since commission
payment to an agent is the only income for some to take care of their families. Similarly, agents
are also advised not to indulge in such practices which could cause them loss of agency income.

Why there is need for alternate distribution channels?

1. To increase insurance penetration in the country.

24
2.To differentiate on basis of customer service. To retain and attract new customers soas to
expand business

3. To increase insurance awareness and knowledge among people.

4. To satisfy the needs of more demanding customers.

5. To improve cost efficiency in insurance distribution.
6. What determines choice of distribution channel for an insurance company?
7. Where are the customers?
8. What is target customer profile?
9. Which product (linked, traditional, term etc.) can be sold through distribution channel?
10. Which channel provides best buying experience and value to target customer segment?

11. The customer preferences vary by market segment like geography, age, income, life style etc,
and market characteristics change over time.

THE EMERGENCE OF NEW DISTRIBUTION CHANNELS:

There was a time when captive agents wrote the bulk of an insurance company’s business. But
increasingly people are buying insurance products from independent producers and institutional
channels such as banks, broker-dealers, IFAs and wire houses. In a way, this is good news for
insurance companies. Managing a captive agency force is an expensive business. Studies
estimate that insurance companies invest anywhere between $65,000 and $200,000 in training
each agent. This investment often does not deliver the desired return because there is a great deal
of attrition among agents. Besides training, there are huge operational overheads attached to
maintaining a captive force.Independent producers and institutional channels are likely to bring
new efficiencies into the distribution framework and corner a larger percentage of the policies
written. For instance, banks and large broker-dealers already have huge networks in place,
existing relationships with customers and brand equity. If insurance companies are able to
position themselves as preferred partners with these channels, they could quickly increase their
market share and at the same time bring down their cost per business acquisition.

THE CONSUMER IS EVOLVING AND SO ARE HIS NEEDS:

25
The way consumers look at insurance products today is completely different from how they
looked at them a few years ago. Insurance products are no longer about just covering risks and
lives. Since the 1980s insurance in many markets has increasingly become a wealth-management
product. Consumers are seeking variety and customizability in their investment portfolios. The
demographics are also in favor of insurance companies. The average lifespan is increasing and so
are standards of living. This is creating demand for products that not only offer protection but
also double up as investments. Insurance companies have an opportunity to bring innovation into
their product mix. They can gain a competitive advantage by quickly launching innovative
products that are aligned with evolving consumer needs. To do this, insurance companies must
be able to understand consumer needs better and have agile systems that let them launch
products quickly. To capitalize on these opportunities, however, insurance companies must get
closer to the customer by expanding their distribution network. They have to incorporate new
and alternative channels, arm the sales forces with effective sales tools and position themselves
as preferred partners with their channels.In most markets, except Asia, insurance carriers
generate more than 80% of their business through alternative distribution channels such as
bancassurance, broker-dealers, wire houses and IFAs. The key challenge for insurers is to attract
and retain these distribution channels by:
• Making it easy for channels to do business with them
• Providing good and quick underwriting support
• Delivering differentiated service to top performers.

• Providing proactive service

• Launching incentive plans and contests
• Managing commissions in a more efficient manner in a marketplace where products are
increasingly becoming commoditized, the big differentiator that insurers can offer their channels
is ease of doing business.

Insurance companies can position themselves as preferred providers by delivering on key areas
such as: . New business and underwriting support
• Marketing and sales support

26
• Underwriting speed
• Client services
• Commission rate -at how insurance companies can streamline their distribution networks,
address the business and technological challenges and capitalize on the opportunities.

Changes in distribution pattern of Life Insurance after IRDA came into existence.

“MULTIPLE CHANNELS”

BANKS

CORPORATES

BROKERS

TELEMARKETING/WORK-SITE MKTG.

INTERNET

6. OTHER DISTRIBUTION CHANNEL-

Other distribution channels that have promise are

Department stores

Post offices

Retail chain

. Basically, these channels provide the convenient features and simple underwriting. These
channels can also be used to generate leads for a more complex sale.

7. INVISIBLE INSURER

In this model, the insurance company or its representative is not the entity marketing the
products. The insurance cover is sold by an automobile /credit card company as an add-on
product leveraging the brand of the retailer. The risk is carried by the insurance company, which
underwrites it. . Products like creditor insurance, automobile insurance, and credit card related

27
insurance could be distributed using this channel. This model can be adopted in all market
segments for the lines of business mentioned. It is already prevalent in some areas like credit
card insurance and crop insurance for agricultural loans. The new players are also attempting this
model.

Essence

The success of marketing insurance depends on understanding the social and cultural needs of
the target population, and matching the market segment with the suitable intermediary segment.
In addition a major segment of the Indian population has low disposable income, meaning that
every penny won will be obtained after a lot of persuasion and the expected value for money is
high. All intermediaries can't sell all lines of business profitably in all markets. There should be
clear demarcation in the marketing strategies of the company from this perspective. Clients
should also receive price differentials for using different channels. This is not a new concept, as
the Public sector Property & Casualty companies are giving discounts in lieu of agency
commission. The channel composition should not be homogeneous but should reflect the larger
society. For example:

•Agents from different economic, social strata and different age and gender.

•Bancassurers ranging from multinational banks to micro credit lending agencies.

•Brokers stretching from corporates to NGOs to milk co-operatives

These intermediaries need to be empowered with the right learning, training and sales tools and
technology enablers. Coupled with the right product mix, this will help the insurers to survive
and flourish in this competitive market.

The players have started exploring new channels of distribution just the way the developed
economies have done it in the past. Some of the new channels of distribution are marketing
28
through a dedicated (a) Sales force (tied agents),(b) Corporate agents (DSA like),(c)
Bancassurance,(d) Work-site marketing,(e) Independent financial advisors (individual qualified
agents) telemarketing (DM),(f) Retail chains,(g) Internet, (h) NGOs,(i) Brokers etc.The mantra is
innovation and diversification. Distribution is more crucial for the life insurer, which needs to
have a mass retail base to minimize the chances of being adversely affected by any casualty.The
companies are using different models each model has its pros and cons, the bancassurance model
is cost-effective and is also quite efficient for market penetration. This is for the simple reason
that since the banking and insurance industry share a common target of financial services
customers, the existing customer base of banks can be targeted rather than building a new one.
Private players are currently following various permutations and combinations of the above
mentioned distribution strategies and trying to grab the market share in the country.

Distribution channels preferred by consumers

Many People still rely on traditional means to get Insurance Policies i.e. Agent though they are
also tapping on new means like Banks & Cell phone.

CURRENT STATUS

29
The IRDA bill had been introduced in the Lok Sabha during the Vajpayee government’s last
tenure with the expected mixed reactions. Surprisingly, the Congress chose to keep mum on the
issue. The left parties staged a walkout registering strong protest. While the eager international
and domestic players have to continue waiting in the wings for the curtains to rise, the
government has made another landmark announcement. It is expected to be introduced again
during the ongoing winter session of the parliament The Banking Regulation Act is to be
modified to allow banks to become active players in the insurance sector. This comes as a major
move and a precursor to the sweeping insurance reforms that have been opposed by the swadeshi
bandwagon and the various labour unions operating in the insurance sector.

The takeout of the amendment made to Section 6 (0) of the Banking Regulation Act, 1949 is this:
The current act does not permit banks to handle insurance products. The proposed change will
permit banks to either distribute or to market insurance products. In addition to this, banks will
also be allowed entry to the insurance sector through the joint venture route and bank assurance.
It is understood that only strong banks with three-year track records will be allowed to enter the
business - entry is a strict no-no to the weaker banks. The Insurance Regulatory and
Development Authority (IRDA) Bill provides for three levels of players - An Insurance
Company, Insurance Broker and an Agent. Banks will work as agents and brokers in this
proposed structure.

This is an attempt to make the insurance sector more dynamic - this is likely to happen as banks
will use their formidable branch network to market and distribute the insurance products. This
amendment could also forge alliances in the banking sector. Initial reports indicate that the State
Bank of India and Bank of Baroda have expressed interest in entering into joint ventures. ING
Barings, who already has a 20%, stake in Vysya Bank, plans to broad base its alliance to add on
insurance-based activities.

This could be a timely move - one that will allow the domestic players to prepare for the
competition ahead. It would also bring them on par with international players who are
accustomed to operate in a liberalized environment. This is also a sensible move by the

30
government to allay the fears of its more conservative and swadeshi-oriented allies and cement
cracks, if any have appeared, given the BJP's new pro-liberalization avataar.

A closer look at the amendment indicates that it is tantamount to creating stronger public sector
monopolies with behemoths like SBI and BOB entering the fray. It is unlikely that the private
sector banks would contemplate entering the business, as they may not have the requisite capital
to meet the prescribed capital adequacy for the insurance sector. The government may have
made a move that could be counter-productive in that the protests against entry of foreign players
will only get more vociferous and strong with many more strong arms entering the rally.

The manner and style of operations of the public sector banks leaves a lot to be desired. In an
industry where service quality at the moment of truth or the moment of service delivery is non-
existent for the public sector players, one wonders what vibrancy these players will impart to the
insurance business. The insurance agent as stereotyped currently is but the personification of a
nationalized bank. Any marketing professional and every consumer will describe such a person
as a semi-retired, balding, sloppy individual who drags his feet as he walks.

One shudders to even conjure up images of insurance marketing in a nationalized bank branch.
One has to search for a semblance of marketing in the existing set-up for student loans and
housing finance. Business school aspirants and young couples will bear witness to this fact. I
have recently been both and have strained my eyes searching for the proverbial needle in a
haystack.

31
 INSURANCE REGULATORY AUTHORITY

On the recommendation of Malhotra Committee, an Insurance Regulatory DevelopmentAct

(IRDA) passed by Indian Parliament in 1993. Its main aim is to activate an insurance regulatory
apparatus essential for proper monitoring and control of the Insurance industry. Due to this Act
several Indian private companies have entered into the insurance market, and some companies
have joined with foreign partners.

In this economic reform process the Insurance Companies will boost the socio-economic
development process. The huge amount of funds that will be at the disposal of Insurance
Companies will be directed as desired avenues like housing, safe drinking water, electricity,
primary education and infrastructure. The growth of the debt market will also get a boost. Above
all the policyholders will get better pricing of products from competitive insurance companies.

The Government of India (GOI) opened the insurance sector to private players on October 24,
2000, thus unraveling a new chapter in this field. This new policy of the GOI is an outcome of
India’s policy of liberalization and also the result of its obligation as a signatory to the WTO to
conform to its principles and guidelines relating to the reduction of barriers to trade in services.
This epoch-making decision has ushered in a new era that has transgressed four decades of
complete control by the public sector over the insurance sector (life insurance was nationalized
in 1956 by merging 245 private insurance companies to form the Life Insurance Corporation of
India (LIC) while general insurance was nationalized with the formation of the General
Insurance Corporation (GIC) in 1972).

This decision of the GOI has been accompanied by a set of laws and regulations governing this
domain. Accordingly, the Insurance Regulatory and Development Authority Act, 1999 (the

32
IRDA Act) was enacted with the predominant aim of setting up an autonomous body known as
the Insurance Regulatory and Development Authority (IRDA) to regulate, promote and ensure
orderly growth of the insurance industry. Further, the Insurance Act, 1938 has been significantly
amended so as to bring it in conformity with the IRDA Act.

The IRDA has a twin role, i.e., regulation as well as development of the insurance sector.

Insurance is a federal subject in India and the legislation that governs insurance in India is:

1. The Insurance Act, 1938; and

2. The IRDA Act.

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 decisions taken simultaneously to provide the supporting systems to the insurance
sector and in particular the life insurance companies were the launch of the IRDA’s online
service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the insurance
companies would have a trained workforce of insurance agents in place to sell their products,
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 insurance companies
have been registered.

33
COMPANY INFORMATION

34
 SHRIRAM LIFE INSURANCE CO LTD

The Shriram group is one of the largest and well respected financial services conglomerats in
India. The group’s main line of activities in financial services include, chit funds, truck
financing, consumer durable financing, stock broking, insurance broking, and life insurance. The
group has a customer base of 30 lack chit subscribers and investors and operates through a
network of 630 offices all over the country. The group has the largest agency force in the privet
sector consisting of more than 75000 loyal and dedicated agents.

Shriram Life insurance Co Ltd. was launched in January 2006. India currently accounts for 16%
of the world’s population. 70% of the populations is below 35 years of age. Between 2001 and
2006, Indian demography has changed with the higher income classes constituting about 79%.
This presents huge market for insurance products.

This is amply reflected in the growth of insurance industry in the last recent years. However this
growth has not reached to rural and semi urban areas. Shriram group with its network of
branches particularly in these areas a unique opportunity for reaching out a wider audience and
sustain the growth story of the insurance industry. Most of the products of Shriram life were
designed by advisors working in the field and based on need analysis done through intense
market research.

During the first year of operation the company earned a profit of 2 crores which doubled to 4
crores in the subsequent year. For the fiscal ended march 2009 the company earned a profit of 8
crores adding the total premium at the end of 2008-09 stood at 1000 crores. The company aims
to garner new business premium of Rs 1000 crores in the next 3-4 years. The company also
intends to increase in 100 cities in next couple of years.

35
 THE JOINT VENTURE
Shriram Life Insurance Company Ltd is a joint venture of Shriram group and Sanlam with South
Africa holding 26% of the stack.

Sanlam Life insurance Limited, a part of the Sanlam Group, is one of the largest providers of life
insurance in South Africa with 3.2 million individuals policies under administration

It has a significance presence across South Africa, United Kingdom and Namibia and is a major
provider of life insurance, retirement annuities, saving and investment products, personal loans,
home loans and trust services to individuals. The shareholder's funds of Sanlam Life equates to
USD 4.4 billion

.
The Sanlam Group was established in 1918 and has a leadership position in financial services in
South Africa. Demutualized in 1998, the group is listed on the JSE Securities Exchange in
Johannesburg and on the Namibian Stock Exchange. It has a current market capitalization of
USD 5.4 billion. The Sanlam Group also operates in the areas of group schemes, retirement
funds, short-term insurance, asset management and other financial services. It has employee
strength of 8,000 and has shareholder funds in excess of USD 4.6 billion. On 31st December
2004 it had more than USD 48 billion assets under management

36
 VISION OF THE COMPANY

The Shriram Life Insurance Company is set out with the objective of reaching out to the common
man with a host of products and services that would be helpful to him in his path to prosperity.

Efficiency in operations, integrity and a strong focus on catering to the needs of the common
man, by offering him high quality and cost-effective products and services, are the values driving
the organization. These core values are deep-rooted within the organization and have been
strongly adhered to over the decades.

The company prides itself on its perfect understanding of the customer. Each product or service
is tailor-made to perfectly suit the needs of the customer. It is this guiding philosophy of putting
people first that has brought the Company closer to the grassroots and has made it the preferred
choice for all the truck financing requirements amongst the customers

37
 FUNCTIONAL DEPARTMENTS

FINANCE DEPARTMENTS
Something must be direct the how of economic activity and facilities its smooth operation.
Finance is the agent that produces this result. Nature of financial management refers to its
functions, scope and objectives.

Financial management is that managerial activity which is concerned with the planning and
controlling of the firm’s financial resources. In modern times finance is the life-blood of the
business. No matter, whether the business is big or small financial is the equally important. The
financial resources must proper planned and control in order to achieve the best out of available.
So, financial resources should be very properly

Generally, financial planning means deciding in advance, the financial activities are to be carried
on to achieve the objective of the firm. In broader séance, in the words of Walker and Boughn as;
“financial planning includes the determination of firm’s financial objectives, formulating and
promulgating financial polices and developing and procedures.”

Financial planning is necessary to achieve both long term and short term objectives. A sound
financial planning includes how much need of funds for both the terms. Then from where they
are to be received and utilized.

Shriram life would evaluated different proposal placed before them and selects the best out of
them. It estimates how much capital is going to be required for various proposals and how much
is the return on the capital employed. The financial manager lays down the estimate on the
capital of cash per week, per month and per year.

38
CAPITALIZATION

At the time of incorporation of any business, it is the first problem before the promoters to decide
how much capitalization should be made in a business. The amount of capital of any time should
not exceed nor less than the amount required. So, it is necessary to have proper capitalization for
the success of the enterprise. But Gerstenberg defines it as;

“The total accounting value of all capital regularly employed in business, it includes
owner’s capital, borrowed capital and any other sources.”

Thus term includes;

1. The value of ordinary and preference shares

2. The value of all surplus earned and capital
3. The value of bonds and security still not redeemed
4. The value of long term loans
However the modern view includes short term funds or liabilities under the firm. It
should be properly capitalized.

Shriram Life Insurance issue shares. So, all these terms do apply.

FUND OPTIONS

There are six funds having different proportional investment in equity, debt, market
money and cash. The funds are Preserver, Defender, Balancer, Maximus, Accelerator, and
Tyaseer.

39
 MARKETING DEPARTMENT
Traditionally, insurance products have been promoted and sold principally through agency
systems in most countries. With new developments in consumer behaviour, evolution of
technology and deregulation, new distribution channels have been developed successfully and
rapidly in recent years.

Shriram Life Insurance make use of various distribution channels:

 Career Agents
 Advertisements
 Direct Response
 Internet

The main characteristics of each of these channels are:

 Career Agents: Career Agents are full-time commissioned sales personnel holding an
agency contract. They are generally considered to be independent contractors.
Consequently an insurance company can exercise control only over the activities of the
agent, which are specified in his contract. Despite this limitation on control, career agents
with suitable training, supervision and motivation can be highly productive and cost
effective. Moreover their level of customer service is usually very high due to the
renewal commissions, policy persistency bonuses, or other customer service-related
awards paid to them.
Many insurance companies, however avoid this channel, believing that agents might
oversell out of their interest in quantity and not quality. Such problems with career agents
usually arise, not due to the nature of this channel, but rather due to the use of improperly
designed remuneration and/or incentive packages.

40
 Direct Response: In this channel no salesperson visits the customer to induce a sale and
no face-to-face contact between consumer and seller occurs. The consumer purchases
products directly by responding to the company's advertisement, mailing or telephone
offers. This channel can be used for simple packaged products, which can be easily
understood by the consumer without explanation.

 Advertisements: This very popular medium among the entire medium any person can
see this advertisement of the products and buy the product from nearest branch.
Internet: Internet banking is already securely established as an effective and profitable
basis for conducting banking operations. The reasonable expectation is that personal
banking services will increasingly be delivered by Internet banking. Company can also
feel confident that Internet banking will also prove an efficient vehicle for cross selling of
insurance savings and protection products. It seems likely that a growing proportion of
the affluent population.

41
 HUMAN RESOURCE DEPARTMENT

HUMAN RESOURCE MANAGEMENT

“Human Resource Management function that helps managers recruits select, train and develop
members for an organization. Obviously, HRM is concerned with the people’s dimension in
organizations

In all business concerns, there is one common element. i.e. HUMAN RESOURCE. Work force
of an Organization is one of the most important inputs of components. It is said that people are
our single most important assets. Because of the unique importance of HUMAN RESOURCE
and its complexity due to ever changing psychology, behavior and attitudes of men and women
at work, personnel function, i.e., manpower management function is becoming increasingly
specialized. The personnel function or system can be broadly defined as the management of
people at work- management of managers and management of workers. Personnel function is
particularly interested in personnel relationship and interaction of employees-human relations.

In a sense, management is personnel administration. Management is the development of people,

and not mere direction of material resources. Human capital is the greatest asset of a business
enterprise. The essential ingredient of management is the leadership and direction of people.
Each manager of people has to be his own personnel man. Personnel management is not
something you really turn over to personnel department staff.

42
MANPOWER PLANNING

Human Resource Planning is the process by which an organization ensures that it has the right
number and kind of people, at the right place, at the right time, capable of effectively and
efficiently competing those tasks that will help the organization achieve its overall objectives.
Human Resource Planning translates the organization’s objectives and plans into the number of
workers meet those objectives. Without a clear-cut planning, estimation of an organization’s
human resource need is reduced to mere guesswork

Manpower planning is needed with respect to persons who can work as sub-broker for the
companies. Companies focus on Advisors of Mutual Fund product and ELSS schemes of
Shriram and focused on Insurance Advisor and post office agent, Tax consultants and CAs for
making sub-broker.

Shriram Life Insurance follows the following process:

The first step is forecasting the need of man power in terms of divisions, department or
functions. Along with the estimate of the number of the people required in different departments
it is also decided that at which level they will be needed.

After estimating the man power requirement, next step is to have a look at the current human
resource. The current human resource is assessed so as to know whether the requirement can be
filled by the existing personnel or not.

At last detailed policies for recruitment, selection, training, promotion, retirement, replacement
etc.

43
EXCLUSIVE EMPLOYMENT

The employee position is that of full time employed with Shriram Life. The company strictly
prohibits the employees from seeking employment of any nature with any other entity.

The employees have to take prior approval from the superior and the Human Resource
department before engaging in activities like addressing seminars, teaching etc. and ensure that
these official duties do not suffer on this account and no monetary benefit is derived there from.

The employee or its relatives should also not be empanelled as an authorized / unauthorized
distributor / agent / broker or in any other similar capacity of any entity engaged in distribution
and selling of financial products.

RECRUITMENT & SELECTION

The upper level members like zonal managers, regional managers, branch managers and senior
executives are recruited by publishing recruitment advertisement in leading national level
newspaper. The qualified applicant are then called for interview and selected.

The regional manager has authority to select lower level employee like peon, marketing
executives, financial accountant etc. by approval of zonal manager.

PERFORMANCE APPRAISAL

Objective of Performance appraisal if for Developmental uses for agents and financial
consultants, for wages, transfer, promotion, for documentation and for organizational purpose
like Human Resource Planning, Job analysis and for training and development

44
TRAINING

Continuous training and upgrading technical, behavioral and managerial skills is a way of life in
Shriram. Shriram Life encourages agent or sub-broker to hone their skills regularly to enable
them to face the challenges of the changing requirements of customers that fit market up and
down

The successful candidates of the AMFI Exam are given the product training. The primary
purpose is to become quite conversant with the product that one sells. In other words, product
knowledge is very important for any advisor. Product knowledge is not just about knowing the
broad terms and conditions of the various schemes of policies. The advisors are explained about
the schemes, the terms related with it, the benefits it provides to investor. This training is aimed
at making the advisors fully equipped with the companies’ product information. This training is
aimed at making the advisors experts in selling the products

45
 PRODUCTS

Broadly, insurance plans can be distinctly divided into ULIPs and traditional plans. A brief detail
of both segments:
Unit Linked Insurance Products

ULIPs have gained high acceptance due to attractive features they offer. These include:

1. Flexibility
1. Flexibility to choose Sum Assured.
2. Flexibility to choose premium amount.
3. Option to change level of Premium /Sum Assured even after the plan has started.
4. Flexibility to change asset allocation by switching between funds
2. Transparency
1. Charges in the plan & net amount invested are known to the customer
2. Convenience of tracking one’s investment performance on a daily basis.

3. Liquidity
1. Option to withdraw money after few years (comfort required in case of exigency)
2. Low minimum tenure.
3. Partial / Systematic withdrawal allowed
4. Fund Options
1. A choice of funds (ranging from equity, debt, cash or a combination)
2. Option to choose your fund mix based on desired asset allocation

ULIP Plans:

1. Future Wealth 2,

2. Pension Plan 2,

3. Shri Plus 2,

46
4. Shri Vidya Plus 2,

5. Shri Vikas 2,

6. Shri Vishram 2.

TRADITIONAL PLANS

These are the oldest types of plans available. These plans cater to customers with a low risk
appetite. Some of the common features of traditional plans are:

1. Steady Investment
1. Major chunk of investible funds are in debt instruments
2. Steady and almost assured returns over the long term
2. Features
1. Death benefit is Sum Assured + guaranteed & vested bonus
2. Helps in asset creation as they are for a long tenure
3. Premium to Sum Assured ratios are fixed for each plan and age.
4. Generally withdrawals are not allowed before maturity

1. Shri Laabh,

2. Shri Life,

3. Shri Raksha,

4. Akshya Nidhi,

5. Shri Surksha,

6. Shri Vidya,

7. Shri Vivah
47
 MAJOR PLAYERS IN LIFE INSURANCE

Sr. No. Name of the Company

1 Bajaj Allianz Life Insurance Company Limited
2 Birla Sun Life Insurance Co. Ltd
3 HDFC Standard Life Insurance Co. Ltd
4 ICICI Prudential Life Insurance Co. Ltd
5 ING Vysya Life Insurance Company Ltd.
6 Life Insurance Corporation of India
7 Max New York Life Insurance Co. Ltd
8 Met Life India Insurance Company Pvt. Ltd.
9 Kotak Mahindra Old Mutual Life Insurance Limited
10 SBI Life Insurance Co. Ltd
11 Tata AIG Life Insurance Company Limited
12 Reliance Life Insurance Company Limited.
13 Aviva Life Insurance Co. India Pvt. Ltd.
14 Sahara India Life Insurance Co, Ltd.
15 Bharti AXA Life Insurance Company Ltd.

48
 SWOT ANALYSIS

Strength:

 Quality of products
 Quality of services
 Highly cooperative and efficient staff & crew members
 Wide distribution network across the whole country.

Weakness:

 Less promotional activities

 Less advertising efforts
 Low market share compared to PSUs

Opportunities:

 By making some good promotional efforts Shriram can gain more number of
customers who will be loyal.
 Increasing awareness will result in increase in customer base.
 Company has already proved it’s strength in market so, soft work required to
launch this product
 Huge potential of insurance business in India.

Threats:

 Challenges posed by other competitor in the market.

 Lower customer base may hinder prompt service
 Social scenario.
 Government policies
 Aggressive Marketing strategy by competitors

49
Research Methodology

50
 INTRODUCTION TO RESEARCH TOPIC

For my research work the selected topic is of consumer awareness. Consumer awareness refers
to the familiarity of the brand, company or product among the customers. For any company it is
very essential that the company should be present in awareness set in the minds of customers.
Products of any company will not be sold until buyers of those products or services are aware
about it. Hence brand awareness plays crucial role for the success of any company in the market.
And so new companies spend lot of efforts for making their brands aware among mindset of
customers. Once customers get aware about the brand then the brand will come into the
consideration set followed by choice set and finally it will get purchased by the customers.
Hence the finally purchase decision greatly depends on the brand awareness. So companies
heavily advertise their brands and products through different means to make their brands familiar
with target market.

51
 RESEARCH PROBLEM
The Government of India (GOI) opened the insurance sector to private players on October 24,
2000, thus unraveling a new chapter in this field. Before that there were only 4 public sector
government hold companies were in the general insurance business in India. Then private
companies entered in the general insurance business. And at presently 4 public sector companies
and more than 12 private sectors companies are doing business of life insurance in Indian
market. All these companies entered after the year of 2000. And so their business is many times
less then PSUs. At present 4 PSUs have 90 % market share in India and private players’ together
account for only remaining 10%. As many firms and industrial persons are not aware about these
private companies and their insurance services.

Shriram Life Insurance entered in the Indian market in the year 2006. Among the all private
players with market share is it is quite less compare to all public sector companies. Many reasons
are behind it but one of them is unawareness of people about Shriram Life Insurance. Many
industrialists and entrepreneurs are not aware about the presence of Shriram Life Insurance in the
insurance business and if they are aware about it then they do not know about the policies and
services offered by the company.

Hence the research work has been done to check the consumer awareness of Shriram Life
Insurancein the Rajkot city. Efforts have been put to know at what extent they are aware about
the company and the services of the company

52
 LITERATURE REVIEW

Kirchler and Angela-Christian Hubert (1999) found that the present study aims at describing
spouses ‘relative dominance in decisions concerning different forms of investment. As
determinants of spouses’ dominance, partnership characteristics, such as partnership role
attitudes, marital satisfaction and individual expertise in relation to different investments, were
considered. A questionnaire on spouses’ dominance in making decisions on various investments,
on the characteristics of particular investments and on partnership characteristics was completed
by 142 Austrian couples. Basically, wives appeared to adapt to the dominance exerted by their
husbands insavings and investment decisions. Wives’ dominance was highest in egalitarian
partnerships, whereautonomic and wife-dominated decisions were reported more frequently than
in traditional partnerships. Additionally, spouses’ relative expertise in relation to the investments
in question showed strong effects on dominance distribution: Spouses with higher expertise than
their partners exerted more dominance in decision-making processes.

Evan Mills, Ph.D. (1999) Studied the insurance industry is rarely thought of as having much
concern about energy issues. However, the historical involvement by insurers and allied
industries in the development and deployment of familiar technologies such as automobile air
bags, fire prevention/suppression systems, and anti-theft devices, shows that this industry has a
long history of utilizing technology to improve safety and otherwise reduce the likelihood of
losses for which they would otherwise have to pay. We have identified nearly 80 examples of
energy-efficient andrenewable energy technologies that offer “loss-prevention” benefits, and
have mapped these opportunities onto the appropriate segments of the very diverse insurance
sector (life, health, property, liability, business interruption, etc.).

Slovic, Fischhoff, Lichtenstein, Corrigan, and Combs (1977) found that subjects were more
likely to buyinsurance against small, high-probabilitylosses than insurance against large, low
probability losses, Hershey and Schoemaker (1980) reported the opposite result.

53
Michael L. Walden (1985) told that the option's package view of the whole life insurance policy
suggests that a whole life policy is a package of options, each of which has value and is expected
toinfluence the price of the policy. This viewpoint implies the general hypothesis that price
differences between whole life policies can be explained by differences in policy contract
provisions anddifferences in selected company characteristics. The option's package 3 theories
were empirically investigated using regression analysis on data from a sample of policies
marketed in NorthCarolina. The results suggest support for the options package theory.

Roger. A. Formisano (1981) examined, via consumer interviews, the impact of the National
Association of Insurance Commissioner's Model Life Insurance Solicitation Regulation as
implemented in New Jersey. A substantial portion of the insurance buyers sampled did not
become aware of the provisions of the regulation aimed to improve their buying ability. Further,
many life insurance buyers were not well informed concerning the nature and operation of life
insurance contracts, and in particular, the life insurance policies that they had purchased.

Michael L. Smith (1982) said that a typical life insurance contract provides a package of options
or rights to the policy owner that is not precisely duplicated by any other combination of
commonlyavailable contracts. Viewed from this perspective, life insurance enjoys a unique
position in the field of investments and should be judged in this light. The paper shows that an
options viewpoint provides a more complete explanation of policy owner behavior towards life
insurance than theconventional savings-and-protection view.

54
 RATIONALE OF THE STUDY

After government opened the doors for the private insurance players to conduct insurance
business in Indian market in the year 2000, many private life and non-life (general) insurance
companies entered in Indian market. And at present there are 4 public sector companies and
more than 12 private sector companies are doing business of life insurance in Indian market.
However till the date public sector companies are in dominant position and private general
insurance companies have very less market share as compared to PSUs.

The reason behind this less business of private insurance companies is the lack of awareness
among the people about these private general insurance companies. Shriram has started its
operation in Rajkot in the recent years. It is essential to know for the company that at what extent
industrial areas of Rajkot are aware about Shriram Life Insurance Co. Ltd. and familiarity of
industries with the insurance products and services offered by the company.

So this research study is conducted with the objective to know the Consumer Awareness of
Shriram Life Insurance Co. Ltd among the people of Rajkot.

OBJECTIVE OF THE STUDY

 To know awareness of people in Rajkot about insurance.
 To know awareness of people in Rajkot about Shriram Life Insurance.
 To know the general preference of people for investment.

55
 HYPOTHESIS
Null Hypothesis: There is significance difference between Male and Female for awareness
about Shriram Life insurance.

Alternative Hypothesis: There is no significance difference between Male and Female for
awareness about Shriram Life insurance

SOURCE OF DATA

Primary Data:

For my project primary data I have collected through structured questionnaire and interview with
respondents from different location in areas of Rajkot city.

Secondary Data:

For this project secondary data is the information collected from catalogues of the Company,
Internet, books, articles, magazines and interaction with company professionals.

RESEARCH INSTRUMENT

For this project research instrument is the personal interview with the structured questionnaire
containing related questions for the selected topic of the research study

SAMPLING PROCESS
For this research project random respondents are taken from areas of Rajkot city

Sampling universe: Rajkot city

Sampling technique: Random sampling

Sample size: 50 respondents

Research instrument: Personal interview with structured questionnaire

56
 SCOPE OF THE STUDY

This project study is helpful in following aspects.

 It will be helpful to the professionals of Shriram life insurance co. ltd. to know the level
of brand awareness among the industrial units of Rajkot city.
 It will be helpful in knowing awareness about the competitors.
 It will be helpful in knowing the awareness level about the policies offered by Shriram
life insurance.
 It will be helpful to know the satisfaction level of the customers to the insurance
companies.

LIMITATION OF THE STUDY

There are some limitations of this study are as follows:

Personal Bias: Some respondents may have biasness towards some other insurance company, so
they may have not given correct information, which may affect the conclusion of this study

Time Limit: Time for this research work was limited otherwise more information could have
been collected.

Area: The area for this research work was limited to Rajkot only, so we cannot know about other
customers outside this area.

Sample Size: The sample size for this research is of only of 50 respondents which may not
reveal adequate and correct information

57
ANALYSIS AND INTERPRETATION

58
 RESULTS AND INTERPRETATION

Demographic Profile of Respondents:

The demographic profile of the respondents includes Gender, Age, Income, Occupation, and
Education Level.

GENDER

The Gender ratio is 88% (44) males and 12% (6) of females.

Gender
Female
12%

Male
88%

AGE

For the analysis purpose, the age of respondents has been classified into four categories 17 to 30-
52%of people, 31 to 40-20%, 41 to 50-12%, and 51 to 60-16%.

Age
51-60
16%

41-50
12% 17-30
52%
31-40
20%

59
INCOME

Income has been measured as monthly income ranging from Below Rs.10000-16% (8), Rs10000
to 20000-38% (19), Rs20000 to 30000- 18% (9), more than Rs.30000-20% (10).

Income

More than 30000 Below 10000

22% 17%

10000-
20000-30000
20000
20%
41%

OCCUPATION

The occupation status of respondents has been grouped as Business 40% (20), Service 52% (26),
None 8% (4).

None Occupation
8%

Buisness
40%

Service
52%

EDUCATION LEVEL
60
The education level of respondents has been measured in terms of Undergraduates 38% (19),
Graduates 44% (22), and Postgraduates 18% (9).

Education Level
Post Graduate
18%

Undergraduate
38%

Graduate
44%

INVESTMENT PREFERENCE
61
Question: When it was asked to respondents where would they like to invest their money,
among Insurance, Real Estate, Mutual Fund, Share Market, Banks & Post.

The following results were obtained

Insurance 16%
Real Estate 14%
Mutual Fund 18%
Share Market 26%
Banks & Post 26%

Invetment Preference
Insurance
Banks & Posts 16%
26%
Real Estate
14%
Mutual Funds
18% Share Market
26%

Interpretation: The results shows that there is higher group of people who are conservative and
save their money in banks and posts and also there are more number of people who wants
aggressive investing like in share market, but there is mixed opinion for insurance, mutual funds
and real estate.

PREFERENCE TO BUY INSURANCE

62
Question: The respondents were asked that which company would they prefer to buy an
insurance policy among these companies Birla Sun Life, LIC, Max New york Life insurance 8%,
ICICI, SBI, ING Vysya, TATA AIG, Bajaj Allianz, Other, and following results obtained

Birla Sun Life Insurance 22% TATA AIG 6%

LIC 18% Bajaj Allianz 10%
Max New york Life 8% ING Vysya 2%
ICICI Prudential 4% Others 16%
SBI 14%
.

Preference on Buying Insurance

Other
Birla
16%
22%

Bajaj
10%

TATA LIC
6% 18%

ING SBI
2% 14% MNYL
8%

ICICI
4%

Interpretation: The results shows that public sector companies are more preferred than private
sector companies, but still in private sector reputed companies like Birla Sun Life and Bajaj
Allianz is also preferred.

CURRENT INSURANCE POLICY

63
Question: When respondents were asked that which company’s insurance policy they have,
among these companies MNYL, LIC, Birla, SBI, ICICI, Shriram, HDFC, Reliance Life
Insurance, Bajaj Allianz, TATA AIG, MetLife, ING Vysya..

The Following Results were obtained

MNYL 10% HDFC 4%

LIC 26% Reliance Life 4%
Birla Sun Life 28% Bajaj Allianz 6%
SBI 8% TATA AIG 4%
ICICI Prudential 10% MetLife 6%
Shriram 2% ING Vysya 2%

Current Insurance Policy ING

2%
Metlife
6%

MNYL
9%
TATA
8%
Bajaj
6%
Reliance LIC
4% 25%
HDFC
4%

Shriram
2% ICICI
9%
SBI BIRLA
8% 17%

Interpretation: The result shows that public sector companies like LIC, SBI as well as private
sector companies like Birla Sun Life Insurance, ICICI, and MNYL have more policy holders.

ANNUAL PREMIUM

64
Question: When respondents were asked how much premium do they pay annually. Option give
to them were below Rs.3000, Rs.3000-5000, Rs.5000-7000, more than 7000.

The following results are obtained

Below 3000 Rs. 28%

3000-5000 Rs 42%
5000-7000 Rs. 20%
More than 7000 Rs. 10%

More than Annual Premium

7000
10%

Below
5000-7000 3000
20% 28%

3000-5000
42%

Interpretation: The result shows that people prefer to pay 3000 to 5000 Rs. So Companies
should form such policies.

PURPOSE OF INVESTMENT

65
Question: When respondents were asked what is the basic purpose to invest in insurance policy.
In the following options Cover future uncertainty, Tax deduction, Future investment, other

.The following result was obtained

Cover Future Uncertainty 34%

Tax Deduction 26%
Future Investment 36%
Other 4%

Other Purpose of Investment

4%

Cover Future
Uncertainty
34%
Future
investment
36%

Tax Deduction
26%

Interpretation: The result shows that people are investing in insurance for future investments or
cover future uncertainty rather than tax deduction.

FEATURE OF POLICY

66
Question: The respondents were asked that which feature of their policy attracted them to buy
that policy and options were: Trusted Name or Reputation of the Company, Friendly Services,
Good Plans, and Low Premium.

The followings results were obtained

Trusted Name or Reputation of Company 40%

Friendly Services 16%
Good Plans 24%
Low Premium 20%

Features of Policy

Low Premium
20%

Trusted Name or
Reputation
40%
Good Plans
24%

Friendly Services
16%

Interpretation: The results shows that people while buying insurance prefer trusted name or
reputation of the company than low premium, good plans, and friendly services. So company
should create good reputation for it self.

67
AWARENESS ABOUT SHRIRAM LIFE INSURANCE
Question: The respondents were asked whether they are aware about Shriram Life Insurance.

The following results were obtained

YES 42%
NO 58%

Awaress about Shriram Life Insurance

Yes
42%

No
58%

Interpretation: The result shows that more people are not aware about Shriram Life Insurance.
So more marketing is required from the side of the firm.

68
 TESTING HYPOTHESIS:

HYPOTHESIS

Null Hypothesis: There is significance difference between Male and Female about awareness
about Shriram Life insurance.

Alternative Hypothesis: There is no significance difference between Male and Female about
awareness about Shriram Life insurance

Particulars Male (a) Female(b) Total

Aware about Shriram 19 2 21
Life Insurance (A)
Not aware about Shriram 25 4 29
life Insurance (B)
Total 44 6 50

On the basis of this hypothesis, the expected frequency corresponding to the number of
respondent and other are as follows.

Expected frequency

Expected of (AB) = (A × B)/N

1) Aa = 21*44/50 = 18.48

2) Ba = 44*29/50 = 25.52

3) Ab = 21*6/50 = 2.52

4) Bb = 29*6/50 = 3.48

69
Calculation of Chi Square:

Group Observed Expected (Oij-Eij) ( Oij-Eij)2 (Oij-Eij)2

Frequency Frequency Eij
(Eij)
(Oij)

Aa 19 18.48 0.52 0.2704 0.0146

Ba 25 25.52 -0.52 0.2704 0.0105
Ab 25 2.52 -0.52 0.2704 0.1071
Bb 4 3.48 0.52 0.2704 0.0775
χ2 0.2097

Here, χ2 calculated value is 0.2097

Degree of freedom in this case = (r-1) (c-1) = (2-1) (2-1) = 1

The table value of χ2 for 1 degree of freedom at 5% level of significance is 3.841. The calculated
value is less than the table value and hence the test is accepted and shows that there is significant
difference between Male and Female about awareness about Shriram Life insurance.

The result shows that males are more aware about Shriram Life Insurance than female.

70
AWARENESS THROUGH CHANNELS

Question: 18 Respondents who were about Shriram Life insurance were asked through which
medium they were aware about the company and the options were News Papers, T.V, Contacted
by Agents, Friends or Reference.

The following results were obtained

News Papers 20%

Television 0%
Contacted By Agent 29%
Friends or Other Reference 51%

Awareness Through Medium

News
Papers
20%

Friends or
Reference Contacte
51% d by
Agents
29%

Interpretation: The result shows that the respondents who know about Shriram Life Insurance,
knows from friends, reference or contacted by agents so marketing is inadequate because very
few people know through newspapers and no one through Television.

71
AWARENESS ABOUT SERVICES/PRODUCTS OF THE COMPANY

Question: 18 respondents who were about Shriram Life Insurance were asked if they know
about the products of the company and following results were obtained

YES 69%
NO 31%

Awareness About Products

No
31%

Yes
69%

Interpretation: The result shows that who respondents who knew about Shriram Life Insurance,
most of them knew about their products because mainly they were contacted by agents or
reference.

SATISFACTION WITH THE SERVICES

13 respondents who were aware about the service or products were asked whether the services
were good enough to satisfy or not and all of them replied positively. This shows that products of
the company are very good.

72
FINDING, RECOMMENDATION
AND CONCLUSION

73
 FINDING AND RECOMMENDATIONS TO THE COMPANY

On the basis of the research project work I did, there are some findings and recommendations
that have been mentioned under.

 Public sector insurance companies have very large business as compared to private
general insurance companies. So private companies have to go long for more and
increased business.

 These private companies have to build a strong image as the PSUs have to increase their
business. People put more trust on government hold companies than private insurance
companies so private insurance companies have to win confidence of people and have to
create strong corporate image.

 This is clear from the research that more people want to invest in banks and mutual funds
then insurance, shares or other investments.

 Even in private companies Birla Sun life Insurance, Max New York life Insurance,
TATA AIG and HDFC with trusted name are more preferred to buy insurance.

 This is observed that people are willing to invest 3000-5000 Rs. So Companies should
develop plans having such premiums.

 People are more willing to invest for future investments then tax deduction so such plans
should be developed.

 Respondents were willing to buy policies on the basis on trusted names, good plans and
low premiums.

74
 Consumer awareness of Shriram Life Insurance is less as compared to the PSUs. So
efforts should be made to increase the awareness of the company.

 Awareness towards the advertisement of Shriram Life Insurance is found very less among
the People and most people know about the company through agents of reference. So it is
advised to the company to go for more advertisements through different medias to
increase the awareness of the company.

 The respondents who know about Shriram Life insurance, most of them Knew about the
products.

 People who were about the services or products though that products were good enough
to satisfy needs. So it shows that products are good to meet needs of people.

75
 CONCLUSION

India has traditionally been a high savings oriented country - often described as being on par
with the thrifty Japan. Insurance sector in the US of A is as big in size as the banking industry
there. This gives us an idea of how important the sector is. Insurance sector channelizes the
savings of the people to long term investments. In India where infrastructure is said to be of
critical importance, this sector will bring the nations own money for the nation.

In 3 years time we would expect the 10% of the population to be under some sort of an
insurance cover. This assuming a premium of Rs. 5000 on an average, amounts to 100 million x
Rs.5000 = Rs. 500 bn. This has made the sector the hottest one in India after IT.

With social security and security to the public at large being the agenda for opening the sector,
the role of the regulator becomes all the more serious and one that would be carefully watched at
every step. India has an enormous middle-class that can afford to buy life, health, and disability
and pension plan products. The low level of penetration of life insurance in India compared to
other developed nations can be judged by a comparison of per capita life premium. Clearly, there
is considerable scope to raise per capita life premium if the market is effectively tapped.

There has been tremendous change in the insurance history. And with it there has been
continuous growth in this sector both in Indian as well as world context. The opening up of the
insurance sector has changed the whole look of the industry. While the LIC in order to face the
competition is coming with new strategies and new players like Shriram are leading the sector
due to their strategic management and tailored made projects.

From our study also we conclude that though the awareness and people opting for LIC plans are
more as compare to Shriram but the later are gaining momentum in the market day by day.

The demand for insurance is likely to increase with rising per-capita incomes, rising literacy
rates and increase of the service sector, as has been seen from the example of several other
developing countries. In fact, opening up of the insurance sector is an integral part of the
liberalization process being pursued by many Developing countries.

76
Insurance is a Rs.400 billion business in India and yet its spread in the country is relatively thin.
Insurance as a concept has not been able to make headway in India. There has been a strong fall
in insurance business in recent years. Furthermore, it can be observed that non-life business is
not increasing as strongly as life business. On the other hand, growth fluctuations have been
relatively small with growth rates varying between 1% and 5%. Life insurance business by
contrast achieved average growth rates of 6%, although the actual rates ranged from 0% to 13%.

This shows on the one hand the increasing significance of life insurance as an instrument for old
age provisions and on the other hand indicates the sensitivity of life insurance to changes in the
institutional and economic environment. So lets conduct this business with utmost economy
with the spirit of trusteeship; thereby making insurance widely popular

77
 LEARNING FROM SIP

 A man without practical knowledge is just like a rough diamond. To shine like a real
diamond one must have practical exposure of what he has learnt. For the students of
management theoretical knowledge is just like lock without key so practical knowledge is
of so much important.

 The summer internship project has given the opportunity to learn and know about real
corporate experience and understand working environment. Practical knowledge is the
best experience and on this basis, we can easily understand about what they want to say.
Firstly each student knows about the theory, so that on the basis of theory, he can easily
learn how to do the work and what is the best way to achieve satisfaction. That is why
we can say that theory is guidelines for practical.

 During my internship what we learnt in theories about financial management, human

resource management, and also about marketing, I experienced all those functional
departments working in the real situations which was quite amazing.

 The working of the functional departments helped me like financial department allocated
funds, human resource department providing training, and selection of new candidates,
performance appraisal motivating employees.

 Summer Internship Project also helped me to understand interaction with employees and
customers and approaches to the customers.

 It was really helpful for me because Shriram Life Insurance Company is based on
insurance policy as product which is a push based product, so it helped me to learn about
real marketing exposure.

78
 During our summer internship project, I did research about consumer awareness about
Shriram Life Insurance, which helped me to learn general preference of people for
investment, awareness about all insurance companies, preference for buying insurance
and also awareness about Shriram life Insurance and their products.

 The summer internship project also helped to analyze how a company is working with
such competition and also with competitors doing their business.

 The experience with Shriram Life Insurance was really handful and very cooperative with
employees and heads of the company.

 At the end it has helped that how work in real life exposure, which will ultimately help
me to work when I start working in the corporate sector.

79
 BIBLIOGRAPHY

Books:
 I.M.Pandey: Basic Text Book of Financial Management: 9th Edition (2008): Vikas
Publication
 C.B.Gupta: Human Resource Management: 4th Edition (2007): Sultanchand and Sons
 Kotler, Keller, Koshy and Jha: Marketing Management: 6th Edition (2007): Pearson
Education
 C.R.Kothari: Research Methodology: 4th Edition (2004): New Age International Limited
 Khan and Jain: Financial Management: 4th Edition (2004): Tata McGraw Hill
 Cooper and Schindler: Business Research Method: 9th Edition (2006): Tata McGraw Hill

Magazines & Journals:

 Walden, Michael L. (1985); The Journal of Risk and Insurance: “Whole life policy is a
package of options“ (Vol.52 no.1,pp 44-58).
 Slovic, Fischhoff, Lichtenstein, Corrigan and Combs, (1977) Decision Research:
“Insurance against small, high-probability losses” (vol.2, issue 2, pp83-93).
 Formisano, Roger A. (1981); The Journal of Risk and Insurance: “Awareness of the
provisions of the regulation” (Vol.48 no.1, pp59-79)
 Smith, Michael L.(1982); The Journal of Risk and Insurance, “Policy owner behavior
towards life insurance” (Vol.49 no.4, pp583-601)
 Kirchler and Angela Christian Hubert: “Spouses ‘relative dominance in decisions
concerning different forms of investment” (.1999; accepted 1999; Available online
1999); Institute of Psychology, University of Vienna.

80
Websites:
www.shriram.com

www.irda.com

www.apnapaisa.com

www.indiainfoline.com

www.sanlam.com

Other Materials:
The Hindu- Business Line, Catalogs, Broachers, Business Operation Prospects

81
 QUESTIONNAIRE:
A Study on Consumer Awareness about Shriram Life Insurance

1. Name:

2. Age:

3. Gender: Male Female

4. Occupation: Business Service None

5. Education Undergraduate Graduate Postgraduate

6. Monthly Income:

Below 10000 10000-20000 20000-30000 more than 30000

7. Where do you prefer to invest your money?

Insurance Real Estate Bank & Post Mutual Funds

Share Market Others

8. Which company’s insurance policy you prefer the most?

Birla Sun life LIC Max New York Life ICICI Prudential

SBI ING Vysya TATA AIG Bajaj Other

9. In which you have any insurance policy?

Write the name of the company

10. How much do you pay annually?

Below 3000 3000-5000 5000-7000 More Than 7000

11. What is the basic purpose of your investment in Insurance?

Cover Future Uncertainty Tax Deduction Future Investment Other

12. Which feature of your policy attracted you to buy it?

Good Plans Friendly Services Trusted Name or Reputation of Company

Low Premium

82
13. Are you aware about Shriram Life insurance?

Yes No

If yes then through which medium,

Newspapers Television Contacted By Agent Friends or other Reference

14. Are you aware about services/products of Shriram Life Insurance?

Yes No

15. Are you satisfied with the services?

Yes No

83