A PROJECT REPORT

ON

at MARKET PERFORMANCE OF LIFE INSURANCE IN SBI

SUBMITTED TO :-

Jiwaji University Gwalior (M.P.)

For the partial fulfillment of the award of
Bachelor of Business Administration

(2013-2014)

Submitted To
PROF. SHILPA SANKPAL

Submitted by
MAHENDRA PRATAP SINGH BBA-V SEM.

Faculty Guide

PRESTIGE INSTITUTE OF MANAGEMENT, GWALIOR

Airport Road, Near Deen Dayal Nagar, Gwalior-474020
Email: info@prestigegwl.org; Website: www.prestigegwl.org

DECLARATION
I MAHENDRA PRATAP SINGH student of BBA V semester PRESTIGE

INSTITUTE OF MANAGEMENT, GWALIOR declare that all the information, facts and figures presented in this report are actually based on my experience & my open market research during the project MARKET PERFORMANCE OF LIFE INSURANCE IN SBI y with special references to SBI LIFE INSURANCE..I assure that this project is the result of my own sincere efforts and has not been submitted in any other institute for the award of any degree or diploma.

Date: Place: -

MAHENDRA PRATAP SINGH BBA VTH SEM

ACKNOWLEDGEMENT
It is privilege to express my gratitude & a sincere thanks to PRESTIGE INSTITUTE OF MANAGEMENT, GWALIOR has given us the opportunity to carry research on the SBI LIFE INSURANCE AS AN INVESTMENT AND MARKETING STRATEGY . I am thankful to my faculty guide for her valuable guidance and support throughout report presentation.

Date: Place: -

MAHENDRA PRATAP SINGH

BBA VTH SEM

CERTIFICATE

This is to certify that Ms. MAHENDRA PRATAP SINGH student of BBA V SEM summer training project report Entitled SBI LIFE INSURANCE AS AN INVESTMENT AND MARKETING STRATEGY programmed has completed under my guidance.

DATE: PLACE:

PROF. SHILPA SANKHPAL FACULTY GUIDE

TABLE OF CONTENTS Chapter 1. Introduction Of The Company 1.1 History of the organization & its objectives 1.2 Organization Structure 1.3 Financial Performance 1.4 Personnel Policies 1.5 Production and Operations 1.6 Layout and Quality Control 1.7 Marketing 1.8 Strength and Weakness 1.9 Special Points 1.10 Names Chapter 2. Methodology 2.1 Topic 2.2 The Study And Its Objectives 2.3 The Sample 2.4 The Tools 2.4.1 for Data Collection 2.4.2 for Data Analysis Chapter 3. Result & Discussion Chapter 4. Implications & Suggestions Chapter 5. Conclusion Bibliography References Annexure

INTRODUCTION OF THE COMPANY

Introduction Of The Company

INTRODUCTION INDIAN INSURANCE INDUSTRY Life insurance came to India from England in 1818 when oriental life insurance company started in Calcutta by Europeans. After this many insurance companies had been started in India. But these companies were looking after only the needs of European community established in India. Indian people were not being insured by these companies. First Indian life insurance company came as Bombay mutual life insurance assurance. Second company was Bharat insurance company came in 1896. After this the united India in Madras, national Indian and national insurance in Calcutta and the co-operative assurance in Lahore were established in 1906. To regulate Indian insurance business first insurance act came in 1912 as life insurance company act and provident fund act. These acts consist of premium rates tables and periodical valuations of companies. In the first two decade of 20th century many life insurance companies were started. So the insurance act came in 1938 to governing life and non life insurance companies and to provide strict state control. In 1956 the life insurance business in India was nationalized. In 1956 life insurance corporation of India (LIC) was created to spreading life insurance much more widely particularly in rural areas. In that year LIC had 5 zonal offices, 33 divisional offices and 212 branch offices. In 1957 the business of LIC of sum assured of 200crores, 1000crores in 1970, and 7000crores in 1986.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY:

In 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame

regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests.

Role of IRDA:
Protecting the interests of policyholders. Establishing guidelines for the operations of insurers and brokers. Specifying the code of conduct, qualifications and training for insurance intermediaries and agents. Promoting efficiency in the conduct of insurance business. Regulating the investment of funds by insurance companies. Specifying the percentage of business to be written by insurers in rural sectors. Handling disputes between insurers and insurance intermediaries.

Changing perception of Indian customers:

Indian Insurance consumers are like Indian Voters, they are soft but when time is right and ripe, they demand and seek necessary changes. De-tariff of many Insurance Products are the reflection of changing aspirations and growing demand of Indian consumers. For historical years, Indian consumers were at receiving end. Insurance Product was underwritten and was practically forced onto consumers on a Take-it-As-it-basis. All that got changed with passage of IRDA act in 1999. New insurance companies have come into existence leading to open competition and hence better products for customers. Indian customers have become very sensitive to Coverage / Premium as well as the Products (read Risk Solution), that is given to them. There are not ready to accept any product, no matter even if that is coming from the market leader, should that product is not serving the purpose. A case in point is ULIP Product / Group Life and Credit Life in Life Insurance segment and Travel / Family Floater Health and Liability Insurance in the Non-life segment are new age

Avatar. The new products are constantly being demanded by Indian consumers, which is putting huge pressures on Insurance companies (Read Risk Under-writers) and Brokers to respond. Customers are looking at Insurance for covering Pure Risk now which I have covered in my next section. Another good reason why we are seeing quick changes in the buying behavior of Insurance from mere Investment to risk mitigation is the cost of Replacement of Goods (ROG) or Cost of Services (COS). Now Indian customers are aware of insurance industry and insurance products provided by companies. They have become more sensitive. They would not accept any type of insurance product unless it fulfills their requirements and needs. In historic days customers looking at insurance products as a life cover which can provide security against any unacceptable events, but now customers look at insurance products as an investment as well as life cover. So todays customers wants good return from the insurance companies. The Indian customers forms the pivot of each companys strategy.

Investment of Indian household savings (as a % in different sector)

BANK DEPOSITS CORP. BANKS SHARES AND DEBENTURES MUTUAL FUNDS NBFCS GOVT. BONDS INSURANCE PF/ RETIRE FUNDS CURRENCY 39 2 1 2 3 13 13 21 6

Changing face of Indian insurance industry:

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

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

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

Increasing growth since liberalization:

YEAR FY 03 FY 04 FY 05 FY 06 FY 07 110 120 130 140 240 LIC (in billion Rs.) 10 20 40 60 160 PRIVATE PLAYER

Possibilities for insurance companies in India: Further deregulation of the market. Greater concern for the customers. Newer products and services. Competition and quality consciousness. Cost effective operations. Restructuring of the public sector. Consolidation of domestic insurance markets. Technology driven shift in product design. Actual operations and distribution. Convergence of financial services.

INSURANCE AND ECONOMY

Indian economy is growing in reference to global market. Business of insurance with its unique features has a special place in Indian economy. It is a highly specialized technical business and customer is the most concern people in this business, therefore this business is able to spur the growth of infrastructure and act as a catalyst in the overall development of Indian economy. The high volumes in the insurance business help spread risk wider, allowing a lowering of the rates of the premium to be charged and in turn, raising profits. When there is a bigger base, the probabilities become more predictable, and with system wide risks

balanced out, profits improve. This explains the current scenario of mergers, acquisitions, and globalization of insurance. Insurance is a type of savings. Insurance is not only important for tax benefits, but also for savings and for providing security. It can be serving as an essential service which a welfare state must make available to its people. Insurance and economic growth mutually influences each other. As the economy grows, the living standards of people increase. As a consequence, the demand for life insurance increases. As the assets of people and of business enterprises increase in the growth process, the demand for general insurance also increases. In fact, as the economy widens the demand for new types of insurance products emerges. Insurance is no longer confined to product markets; they also cover service industries. It is equally true that growth itself is facilitated by insurance. A welldeveloped insurance sector promotes economic growth by encouraging risk-taking. Risk is inherent in all economic activities. Without some kind of cover against risk, some of these activities will not be carried out at all. Also insurance and more particularly life insurance is a mobilizer of long term savings and life insurance companies are thus able to support infrastructure projects which require long term funds. There is thus a mutually beneficial interaction between insurance and economic growth. The low income levels of the vast majority of population have been one of the factors inhibiting a faster growth of insurance in India. To some extent this is also compounded by certain attitudes to life. The economy has moved on to a higher growth path. The average rate of growth of the economy in the last three years was 8.1 per cent. This strong growth will bring about significant changes in the insurance industry. At this point, it is important to note that not all activities can be insured. If that were possible, it would completely negate entrepreneurship. Professor Frank Knight in his celebrated book Risk Uncertainty and Profit emphasized that profit is a consequence of uncertainty. He made a distinction between quantifiable risk and non-quantifiable risk. According to him, it is nonquantifiable risk that leads to profit. He wrote It is a world of change in which we live, and a world of uncertainty. We live only by knowing something about the future; while the problems of life or of conduct at least, arise from the fact that we know so little. This is as true of business as of other spheres of activity. The real management challenges are uninsurable risks. In the case of insurable risks, risk is avoided at a cost.

DISTRIBUTION OF INSURANCE PRODUCTS

Insurance has to be sold the world over. The Touch point with the ultimate customer is the distributor or the producer and the role played by them in insurance markets is critical. It is the distributor who makes the difference in terms of the quality of advice for choice of product, servicing of policy post sale and settlement of claims. In the Indian market, with their distinct cultural and social ethics, these conditions will play a major role in shaping the distribution channels and their effectiveness. In today's scenario, insurance companies must move from selling insurance to marketing an essential financial product. The distributors have to become trusted financial advisors for the clients and trusted business associates for the insurance Companies. Challenges for insurance companies and intermediaries in India Building faith about company in the mind of clients. Building personal credibility with the clients.

Different distribution channels in India: A multi-channel strategy is better suited for the Indian market. Indian insurance market is a combination of multiple markets. Each of the markets requires a different approach. Apart from geographical spread the socio-cultural and economic segmentation of the market is very wide, exhibiting different traits and needs. Different multi-distribution channels in India are as follows: Agents: Agents are the primary channel for distribution of insurance. The public and private sector insurance companies have their branches in almost all parts of the country and have attracted local people to become their agents. Today's insurance agent has to know which product will appeal to the customer, and also know his competitor's products to be an effective salesman who can sell his company, the product, and himself to the customer. To the average customer, every new company is the same. Perceptions about the public sector companies are also cemented in his mind. So an insurance agent can play an important role to create a good image of company.

Banks: Banks in India are all pervasive, especially the public sector banks. Many insurance companies are selling their products through banks. Companies which are bank owned, they are selling their products through their parent bank. The public sector banks, with their vast branch networks, are helpful to insurance companies. This channel of selling insurance is known as Bank assurance. INSURANCE COMPANY ASSOCIATE BANKS ICICI Bank, Bank of India, Citibank, Allahabad Bank, Federal Bank, South Indian Bank, Punjab and Maharashtra Cooperative Bank

ICICI Prudential

SBI Life Birla Sun Life

State Bank of India Deutsche Bank, Citibank, Bank of Rajasthan, Andhra Bank

ING Vysya Bank Aviva Life Insurance HDFC Standard Life Met Life

Vysya Bank ABN Amro Bank, Canara Bank HDFC Bank, Union Bank, Indian Bank Karnataka Bank, J&K Bank

Brokers: Now a days different financial institution are selling insurance. These financial institutions are known as brokers. They are taking some underwriting charges from the insurance companies to sell their insurance products.

Corporate agents: Corporate agency is a cross selling type of channel. Insurance companies tie-up with business houses in other industries to sell insurance either to their employees or their customers. Insurance industry, during the past 2 years has witnessed a number of such strategic tie-ups and alliances. Corporate agents have become a major force to reckon with in distributing insurance products. Such as- Bajaj Allianz tied up with Maruti Udyog and Ford for auto insurance and Tata AIG life has tied up with Tata tea, Khaitans Williamson major and bridge foundation for selling rural policies.

Internet: In this technological world internet is also a channel of selling insurance. This can be as direct marketing.

EFFECTIVE MARKETING STRATEGIES FOR INSURANCE PRODUCTS Now the Indian consumer is knowledgeable and sensitive. Consumers are increasingly more aware and are actively managing their financial affairs. People are increasingly looking not just at products, but at integrated financial solutions that can offer stability of returns along with total protection. In view of this, the insurance managers need to understand more about the details that go into the introduction of insurance products to make it attractive in this competitive market. So now days an insurance manager requires leadership, commitment, creativity, and flexibility. "Every family in every village in the country should feel safe and secure". This vision alone will help to bring the new ideas to the insurance manager. Financial, marketing and human resource polices of the corporations influence the unit mangers to make decisions. Performance of insurance company depends on the effectiveness of such policies. Insurance corporations formulate and revise these policies from time to time to ensure that the performance of the managers is best for the organization. In the competitive market, insurance companies are being forced to adopt a strictly professional approach in marketing. The insurance companies face the challenge of changing the uninspiring public image of the industry.

Some of the important marketing elements are Marketing mix. The importance of relationship.

Positioning. Value addition. Segmentation. Branding. Insuring service quality. Effective pricing. Customer satisfaction research.

The growth of insurance sector is governed largely by factors external to it. The following factors influence the market and demand of product Government policies. Growth in population. Changing age profile. Income wise distribution of the population. Level of insurance awareness. The pricing of the policies. The economic climate of the country. The aversion to risk. Social and political features of the country. Growth scenario in the world.

Different companies adopt different approaches in their marketing strategies. One approach is focus upon product quality which can give confidence in the mind of customers that they are offered by best featured products. And other approach is focusing on customers needs, which involve a heavy investment in developing relationships with policyholders. Under this approach customer can expect a range of products and service offered to him. Third approach is market segmentation under which the population can be divided into several homogeneous products and

groups, the effort should be tie clients to the company by customized combination of coverage, easy payment plans, risk management advice, and convenient and quick claim handling. An insurance product can be classified into three phases: Core product: In insurance industry the core product is the policy that provides protection to the customers. Expected product: Because of competition customers start to expect more from an insurance product. Then insurance companies provide some tangible attributes in their product to differentiate from competitors, such as Brand Some additional features in existing product By providing instruction manual with the policy

Augmented product: An insurance company can provide different types of services to differentiate their products Post sales services. Branches in different places for customers. Customer complaint management. Payment option convenient to customers.

The entry of private players and their foreign partners has given domestic players a tough time, because the opening up of the sector has not brought in only foreign players, but also professional techniques and technologies. The present scene in India is such that everyone is trying to put in the best efforts. There are marketing strategies more for survival than growth. But the most important gift of privatization is the introduction of customer-oriented services. Utmost care is being taken to maximize customer satisfaction.

HISTORY OF THE ORGANIZATION & ITS OBJECTIVES

HISTORY OF THE ORGANIZATION & ITS OBJECTIVES

History
SBI Life insurance is a joint venture between the State Bank of India and Cardiff SA of France. SBI Life insurance is registered with an authorized capital of Rs 500 crore and a paid up capital of Rs 350 crores. SBI owns 74% of the total capital and Cardiff the remaining 26%. State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate Banks, SBI Group has the unrivalled strength of over 14,000 branches across the country, the largest in the world. Cardiff is a wholly owned subsidiary of BNP Paribas, which is The Euro Zones leading Bank. BNP is one of the oldest foreign banks with a presence in India dating back to 1860. It has 9 branches in the metros and other major towns in the country. Cardiff is a vibrant insurance company specializing in personal lines such as long-term savings, protection products and creditor insurance. Cardiff has also been a pioneer in the art of selling insurance products through commercial banks in France and 29 more countries .In 2004, SBI Life insurance became the first company amongst private insurance players to cover 30 lakh lives. The company expects to carve a niche in the Indian insurance market through extensive product innovation and aims to provide the highest standards of customer service through a technological interface. To facilitate this, call centres have been already installed and help lines will be installed and customers will have access to their accounts through the Internet or through SBI branches. SBI Life insurance is uniquely placed as a pioneer to usher banc assurance into India. The company hopes to extensively utilize the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans, personal loans and credit cards. SBIs access to over 100 million accounts provides a vibrant base to build insurance selling across every region and economic strata in the country. Under section 88 of insurance act 1961 an individual is entitled to a rebate of 20 per cent on the annual premium payable on his/her life and life of his/her children or adult children. The rebate is deductible from tax payable by the individual or a Hindu Undivided Family. This rebate is can be availed up to a maximum of Rs 12,000 on payment of yearly premium of Rs 60,000. By paying Rs 60,000 a year, you can buy anything upwards of Rs 10 lakh in sum assured. (Depending upon the age of the insured and term of the policy) This means that you get an Rs

12,000 tax benefit. The rebate is deductible from the tax payable by an individual or a Hindu Undivided Family. SBI Life Insurance is currently growing at an impressive rate of 200%. As per the latest IrDA report SBI Life ranks No. 3 amongst the private insurers. The company's market share has increased to 10% amongst the private players and is 2.25% in the total industry. This year, the company is aiming at a growth of 150%. The new business premium of the company from beginning of the year to September 2006 is Rs 660 crores. The total business premium of the company from the beginning of the year till September 2006 is Rs 765 crores. The company aims to collect first year premium of over Rs 2,000 crores. SBI Life follow a multi distribution channel approach and expect all channels to contribute to the overall growth. Today, the agency channel contributes over 50% and banc assurance channel contributes to 40% of the business. Other channels like Credit Life and Group Corporate are also performing very well.

Products of SBI Life insurance

(1) (2) (3) (4) (5) Unit Linked products Horizon 11 Unit Pus 11 Unit plus child Plan Unit Plan Elite Pension Products Horizon 11 Pension Unit Plus 11 Pension Lifelong Pension Pure Protection Products Swadhan Shield keyman Protection cum savings products Sudarshan Scholar11 Setubandhan Money back scheme products Money Back Sanjeevan Supreme (1) Group Employee Benefit Products Retirement Solutions Cap Assure Gratuity Cap Assure Superannuation Cap Assure Leave Encashment Group Immediate Annuity SBI Life Golden Gratuity Protection Plan Sampoorn Suraksha SBI Life Group Term Life Scheme In Lieu of EDLI Specialized Term Insurance SBI Life Keyman Insurance (2) Group Loan Protection Products Dhanaraksha Plus Dhanaraksha Plus SP Dhanaraksha Plus LPPT Dhanaraksha Plus RP (3) Group Savings Protection Plan Nidhi Raksha RP (4) Group Micro Insurance Grameen Shakti and Super Suraksha

The story of insurance is probably as old as the story of mankind. Tendency of a human being to secure themselves against loss and disaster has been from the starting of world. They sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years as per records. Insurance business is divided into four classes: Life Insurance Fire Marine Miscellaneous Insurance.

Insurance provides:
Protection to investor. Accumulation of savings. Channeling these savings into sectors needing huge long term investment.

Functions of insurance
Provide protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk: Insurance is an instrument to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid.

Assessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also.

Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain. Small capital to cover larger risk: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

Means of savings and investment:

Insurance serves as savings and investment,

insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. Source of earning foreign exchange: various other ways. Risk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover. Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and

Importance of life insurance

Protection against untimely death: - Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured. Saving for old age: - After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age. Promotion of savings: - Life insurance encourages people to save money compulsorily. When life policy is taken, the assured is to pay premiums regularly to keep the policy in

force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only after the expiry of duration of the policy. Initiates investments: - Life Insurance Corporation encourages and mobilizes the public savings and canalizes the same in various investments for the economic development of the country. Life insurance is an important tool for the mobilization and investment of small savings. Credit worthiness: - Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of business. Social Security: - Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future. Tax Benefit: - Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C.

Indian regulatory development authority

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

Role of IRDA
Protecting the interests of policyholders. Establishing guidelines for the operations of insurers, and brokers. Specifying the code of conduct, qualifications, and training for insurance intermediaries and agents. Promoting efficiency in the conduct of insurance business. Regulating the investment of funds by insurance companies. Specifying the percentage of business to be written by insurers in rural sectors. Handling disputes between insurers and insurance intermediaries.

Distribution of insurance products

Insurance has to be sold the world over. The Touch point with the ultimate customer is the distributor or the producer and the role played by them in insurance markets is critical. It is the distributor who makes the difference in terms of the quality of advice for choice of product, servicing of policy post sale and settlement of claims. In the Indian market, with their distinct cultural and social ethics, these conditions will play a major role in shaping the distribution channels and their effectiveness. In today's scenario, insurance companies must move from selling insurance to marketing an essential financial product. The distributors have to become trusted financial advisors for the clients and trusted business associates for the insurance Companies. Challenges for insurance companies and intermediaries in India Building faith about company in the mind of clients. Building personal credibility with the clients.

Different distribution channels in India

A multi-channel strategy is better suited for the Indian market. Indian insurance market is a combination of multiple markets. Each of the markets requires a different approach. Apart from geographical spread the socio-cultural and economic segmentation of the market is very wide, exhibiting different traits and needs. Different multi-distribution channels in India are as follows Agents: Agents are the primary channel for distribution of insurance. The public and private sector insurance companies have their branches in almost all parts of the country and have attracted local people to become their agents. Today's insurance agent has to know which product will appeal to the customer, and also know his competitor's products to be an effective salesman who can sell his company, the product, and himself to the customer. To the average customer, every new company is the same. Perceptions about the public sector companies are also cemented in his mind. So an insurance agent can play an important role to create a good image of company. Banks: Banks in India are all pervasive, especially the public sector banks. Many insurance companies are selling their products through banks. Companies which are bank owned, they are selling their products through their parent bank. The public sector banks, with their vast branch networks, are helpful to insurance companies. This channel of selling insurance is known as Banc assurance.

Effective marketing strategies

Now the Indian consumer is knowledgeable and sensitive. Consumers are increasingly more aware and are actively managing their financial affairs. People are increasingly looking not just at products, but at integrated financial solutions that can offer stability of returns along with total protection. In view of this, the insurance managers need to understand more about the details that go into the introduction of insurance products to make it attractive in this competitive market. So now days an insurance manager requires leadership, commitment, creativity, and flexibility. "Every family in every village in the country should feel safe and secure". This vision alone will help to bring the new ideas to the insurance manager. Financial, marketing and human resource

polices of the corporations influence the unit mangers to make decisions. Performance of insurance company depends on the effectiveness of such policies. Insurance corporations formulate and revise these policies from time to time to ensure that the performance of the managers is best for the organization. In the competitive market, insurance companies are being forced to adopt a strictly professional approach in marketing. The insurance companies face the challenge of changing the uninspiring public image of the industry. Some of the important marketing elements are Marketing mix. The importance of relationship. Positioning. Value addition. Segmentation. Branding. Insuring service quality. Effective pricing. Customer satisfaction research.

The growth of insurance sector is governed largely by factors external to it. The following factors influence the market and demand of product Government policies. Growth in population. Changing age profile. Income wise distribution of the population.

Level of insurance awareness. The pricing of the policies. The economic climate of the country. The aversion to risk. Social and political features of the country. Growth scenario in the world.

Different companies adopt different approaches in their marketing strategies. One approach is focus upon product quality which can give confidence in the mind of customers that they are offered by best featured products. And other approach is focusing on customers needs, which involve a heavy investment in developing relationships with policyholders. Under this approach customer can expect a range of products and service offered to him. Third approach is market segmentation under which the population can be divided into several homogeneous products and groups, the effort should be tie clients to the company by customized combination of coverage, easy payment plans, risk management advice, and convenient and quick claim handling.

An insurance product can be classified in three phases: Core product: In insurance industry the core product is the policy that provides protection to the customers. Expected product: Because of competition customers start to expect more from an insurance product. Then insurance companies provide some tangible attributes in their product to differentiate from competitors, such as Brand Some additional features in existing product By providing instruction manual with the policy.

Augmented product: An insurance company can provide different types of services to

differentiate their products Post sales services. Branches in different places for customers. Customer complaint management. Payment option convenient to customers. The entry of private players and their foreign partners has given domestic players a tough time, because the opening up of the sector has not brought in only foreign players, but also professional techniques and technologies. The present scene in India is such that everyone is trying to put in the best efforts. There are marketing strategies more for survival than growth. But the most important gift of privatization is the introduction of customer-oriented services. Utmost care is being taken to maximize customer satisfaction.

Success of an insurance company depends on four important functions

Identification of markets: Identification of markets means need to understand the trends in culture and businesses constantly, through conducting research and analysis. Insurance companies can take this job on their own or assign it to an external agency. Relying on an external agency can be risky due to the questionable loyalty of the agents. Assessment of risks (of the insured and the insurance corporation) and estimation of losses: Efficiency of actuaries and assessors of the insurance policies in fixing premiums and settling claims is foremost an important area for achieving overall efficiency in operations. The quality of assessing the risk and estimation of losses has the largest claim on the performance of an insurance company. Well trained, experienced and expert hands are needed for the operations. Penetration into and exploitation of markets: Market penetration or exploitation of a company can be identified with the growth in number of policies in each type of insurance, growth rate in earnings or turnover, companys market share, increase in number of branches and

divisions etc. Efforts of the company as a whole and that of the divisions and branches are assessed to measure the effectiveness. Control over investment and operating costs: Control over resources such as men, machines, and materials at each level of the organization provides measures of efficiency of a unit as well as the organization. Investment control and expense control are dealt separately and the effectiveness of managements decisions at various levels is to be assessed separately

To find best prospects

Allocating marketing strategies against market potential. Estimating potential for specific products within local markets. Identifying high opportunity areas. Measuring agency performance relative to market potential. Optimizing your agency network against market potential.

Attributes to develop marketing strategies

Channel data: - Useful to know future buying preferences, learning about products and purchase channels. Consumer attitudes. Consumption data: - Useful to evaluate annual premiums, number of annuities owned, value of annuities, and with which company the current policy is held.

Effective strategies for insurance agents

Learn how to construct a mental image for success. Learn how to find a proper perspective and how to turn off all the signals that cause people not to buy from you. Learn how to get and set more appointments. Learn how to convert a new lead into sales. Learn how to act when you meet a client for the first time.

Learn how the order in which you explain the types of policies can double your income. Take Easy steps to avoid delays in issuing policies.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY TITLE To determine market performance of SBI Life Insurance. OBJECTIVES The objectives of the present study are as following: Proper understanding and analysis of life insurance industry. To know about brand awareness of SBI Life Insurance and customers preference about SBI Life Insurance. Conduct market survey on a sample selected from the entire population and derive opinion on that research. To help company in establishing a network of Life Insurance Advisors and to promote the benefits those are provided by SBI Life Insurance to its Life Insurance Advisors. To offer suggestions based upon findings.

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
All the findings and conclusions are based on the survey done in the working area within time limit. I tried to select a sample representative of the whole group during my job training. I have collected data from 100 respondents for studying Market performance, selected randomly from different areas in Gwalior such as: Public places like shopping centers, malls, restaurants etc. Employees of Government Departments Employees of Private Firms Business / Self Employed

For recruitment of Life insurance Advisors, I have collected data from 200 respondents from following groups: Chartered Accountants Tax Consultants Businessmen Share Brokers Lawyers Working Professionals House Wives Retired Persons

RESEARCH DESIGN
Research was initiated by examining the secondary data to gain insight into the problem. The primary data is evaluated on the basis of the analysis of the secondary data.

DEVELOPING THE RESEARCH PLAN

The data for this research project has been collected through self administration. Due to time limitation and other constraints direct personal interview method is used. A structured questionnaire was framed as it is less time consuming, generates specific and to the point information, easier to tabulate and interpret. Moreover respondents prefer to give direct answers. In questionnaires open ended and closed ended, both the types of questions has been used.

COLLECTION OF DATA
Secondary Data: It was collected from internal sources. The secondary data was collected on the basis of organizational file, official records, news papers, magazines, management books, preserved information in the companys database and website of the company. Primary data: Individual respondents, Chartered Accountants, Tax Consultants, Insurance Agents, Auto loan providers were personally visited and interviewed. They were the main source of Primary data. The method of collection of primary data was direct personal interview through a structured questionnaire.

SAMPLING PLAN

Since it is not possible to study whole population, it is necessary to obtain representative samples from the population to understand its characteristics. Sampling Units: Individual respondents for studying Market Performance, selected randomly from different areas in Gwalior, like various shopping malls and markets, Government Offices. Chartered Accountants, Tax Consultants, Lawyers, Business Men, Professionals and House Wives of Gwalior for recruitment of Life Insurance Advisors Sample Technique: Random Sampling Research Instrument: Structured Questionnaire Contact Method: Personal Interview

SAMPLE SIZE Study of Market Performance: 100 respondents

Recruitment of Life Insurance Advisors for SBI Life Insurance: 200 respondents

DATA ANALYSIS & GRAPHICAL REPRESENTATION

DATA ANALYSIS & GRAPHICAL REPRESENTATION

Do you have any life insurance policy?

2.Are you aware about the Life Insurance products or will prefer to purchase the Life Insurance products?

3.Term of your insurance policy?

4.What do you think are the benefits of Life Insurance?

5.Which feature of Life Insurance policy will you consider while buying?

6.How have you bought / would buy a Life Insurance policy?

7.Are you satisfied with your Life Insurance policy?

8.According to you, what is the right age to buy insurance?

RECOMMENDATIONS

RECOMMENDATIONS
Networking is needed to be made broad as the number of branches with SBI Life Insurance is only 75 and only 7 states are touched by the company so, there is a huge untapped market available for SBI Life. Marketing in terms of the media via advertisements on Television to small commercials on FM, hoardings and signage etc. has to be made because there were respondents who havent even heard about SBI Life Insurance. Awareness camp for sub-urban area should be focused. SBI Life Insurance recruits its advisors mainly through personal reference, through advertisement and through walk-in interviews. They must also recruit them though placement agencies on trial basis. SBI Life Insurance must build its reputation by focusing on service quality.

CONCLUSIONS During the data collected, it has been found that people have great awareness about various companies but a lot more has to be done, especially by smaller companies like SBI Life Insurance to establish their market presence. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money. People in general have been influenced by the marketing activities of insurance companies. A high penetration of print, radio and TV ad campaigns over the years is beginning to have its impact now. Another important trend was in terms of people viewing insurance as a tax saving and investment instrument as much as protective one. The general satisfaction levels among public with regards to policy and agents still requires improvement. Here lies the opportunity for a relatively new comer like SBI Life Insurance. LIC has never been known for prompt service or customer oriented methods but SBI Life Insurance can build its reputation based on these factors.

BIBLIOGRAPHY

www.sbilife.com www.irda.com www.google.com Company manual

QUESTIONNAIRE
Q 1) Do you have any life insurance policy? a) YES b) NO

Q 2) Are you aware about the Life Insurance products or will prefer to purchase the Life Insurance products of (mark ): LIC ICICI Prudential Life Insurance HDFC Standard Life Insurance SBI Life Insurance SBI Life Insurance TATA AIG Life Insurance Reliance Life Insurance

Q3) Which companys insurance policy do you have? __________________________________________________________________ Q4) Term of your insurance policy? a) < 5 years b) c) 10 20 years b) 5 10 years d) any other_______________

Q5) What do you think are the benefits of Life Insurance? a) Covers future uncertainty b) Tax Savings c) Investments d) Comprehensive investment and risk coverage instrument Q6) Which feature of Life Insurance policy will you consider while buying? a) Money Back Guarantee b) Larger Risk Coverage c) Low Premium d) Companys Credibility e) Easy Access to Agents Q7) How have you bought / would buy a Life Insurance policy? a) Customer approaching insurance company / agent b) Insurance company / agent approaching the customer Q8) Are you satisfied with your Life Insurance policy? a) Highly Satisfied c) Not So Satisfied b) Satisfied d) Not Responding

Q9) According to you, what is the right age to buy insurance? a) < 25 years b) 25 35 years e) Anytime c) 35- 45 yearsd) > 45 years