my project (nitish)

5/27/2018 My Project (Nitish)

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A

PROJECT REPORT

ON

FUND MANAGEMENT

Submitted in partial fulfillment of the requirementsfor the award of the Degree of

BACHELOR OF BUSINESS ADMINISTRATION

To

Guru Gobind Singh Indraprastha University, Delhi

Guide: Miss. KIRTI DAHIYA Submitted by: NITISH KAUSHIK

Enroll. No. : 06020501811

BLS INSTITUTE OF TECHNOLOGY MANAGEMENT

Delhi- Rohtak Road, NH-10, Jakhoda, Bahadurgarh -

Batch (2011-2014)


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CERTIFICATE

I, Mr. NITISH KAUSHIK, Enroll No.06020501811 certify that the Summer Training Report

(Paper Code BBA 315) entitled FUND MANAGEMENTis done by me at PNB METLIFE.

To the best of my knowledge and belief, the material embodied in this Report has not been

submitted earlier for the award of any Degree or Diploma by any University or Institution.

Signature of the student

Date:

Certified that the Summer Training Report (Paper Code BBA 315) FUND MANAGEMENT

done by Mr., NITISH KAUSHIK Enroll no. 06020501811 has been completed under my

guidance and supervision.

Signature of the Guide

Date: Name of the Guide: KIRTI DAHIYA

Designation:

Countersigned

Director


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ACKNOWLEDGEMENT

In this project I have made an honest and dedicated attempt to make the research material as

authentic as it could. And I earnestly hope that it provides useful and workable information and

knowledge to any person reading it.

During this small time frame of two months in which the project reached its completion, there

were a few people whom I would like to make a mention of and without whose help the project

would have never seen the light of the day.

I also thank to my internal guide Prof. Pramod kumar Nayak and Kirti Dahiya for his and her

timely response via e-mail, which immensely helped in giving the project the initial direction itneeded.

I dedicate this project to my family and friends who were extremely kind and who at times

went out of the way to help me. Without their co-operation it would have perhaps not

been possible to research a few places, which I did, within the stipulated time frame.

NITISH KAUSHIK

BBA(B&I)


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INDEX

S.NO. CONTENT PAGE NO.

1. Introduction 5.

2. Company profile 11.

3. Objective 44.

4. SWOT Analysis of the company 46.

5. Research methodology 54.

6. Data Interpretation and Analysis 57.

7. Finding and Recommendation 71.

8. Lesson Learnt 74.

9. Conclusion 77.

10. Bibliography 79.


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CHAPTER 1

INTRODUCTION


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INTRODUCTIONThe history of life insurance in India dates back to 1818 when it was conceived as a means to

provide for English Widows. Interestingly in those days a higher premium was charged for

Indian lives than the non - Indian lives, as Indian lives were considered more risky to cover. The

Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to

charge the same premium for both Indian and non-Indian lives.

The Oriental Assurance Company was established in 1880. The General insurance business in

India, on the other hand, can trace its roots to Triton Insurance Company Limited, the first

general insurance company established in the year 1850 in Calcutta by the British. Till the end of

the nineteenth century insurance business was almost entirely in the hands of overseas

companies.

Insurance regulation formally began in India with the passing of the Life Insurance Companies

Act of 1912 and the Provident Fund Act of 1912. Several frauds during the 1920's and 1930's

sullied insurance business in India. By 1938 there were 176 insurance companies.

The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided

strict State Control over the insurance business. The insurance business grew at a faster pace

after independence. Indian companies strengthened their hold on this business but despite the

growth that was witnessed, insurance remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and provident

societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC)

was born. Nationalization was justified on the grounds that it would create the much needed


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funds for rapid industrialization. This was in conformity with the Government's chosen path of

State led planning and development.

The non-life insurance business continued to thrive with the private sector till 1972. Their

operations were restricted to organized trade and industry in large cities. The general insurance

industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and grouped

into four companies- National Insurance Company, New India Assurance Company, Oriental

Insurance Company and United India Insurance Company. These were subsidiaries of the

General Insurance Company (GIC).

KEY MILESTONES

a) 1912:The Indian Life Assurance Companies Act enacted as the first statute to regulatethe life insurance business.

b) 1928:The Indian Insurance Companies Act enacted to enable the government to collectstatistical information about both life and non-life insurance businesses.

c) 1938: Earlier legislation consolidated and amended by the Insurance Act with theobjective of protecting the interests of the insuring public.

d) 1956:245 Indian and foreign insurers along with provident societies were taken over bythe central government and nationalized. LIC was formed by an Act of Parliament- LIC

Act 1956- with a capital contribution of Rs. 5 crore from the Government of India.

INDUSTRY REFORMS

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


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fastidiously stuck to its schedule of framing regulations and registering the private sector

insurance companies. Since being set up as an independent statutory body the IRDA has put in a

framework of globally compatible regulations.

The other decision taken simultaneously to provide the supporting systems to the insurance

sector and in particular the life insurance companies was the launch of the IRDA 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.

PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA

The life insurance industry in India grew by an impressive 47.38%, with premium income at Rs.

1560.41 billion during the fiscal year 2006-2007.

The 17 private insurers increased their market share from about 15% to about 19% in a year's

time. The figures for the first two months of the fiscal year 2007-08 also speak of the growing

share of the private insurers. The share of LIC for this period has further come down to 75

percent, while the private players have grabbed over 24 percent.

With the opening up of the insurance industry in India many foreign players have entered the

market. The restriction on these companies is that they are not allowed to have more than a 26%

stake in a companys ownership. Since the opening up of the insurance sector in 1999, foreign

investments of Rs. 8.7 billion have poured into the Indian market and 22 private life insurance

companies have been granted licenses.


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Innovative products, smart marketing, and aggressive distribution have enabled fledgling private

insurance companies to sign up Indian customers faster than anyone expected. Indians, who had

always seen life insurance as a tax saving device, are now suddenly turning to the private sector

and snapping up the new innovative products on offer. Some of these products include

investment plans with insurance and good returns (unit linked plans), multi purpose insurance

plans, pension plans, child plans and money back plans.

The insurance sector was opened up for private participation four years ago. For years now, the

private players are active in the liberalized environment. The insurance market have witnessed

dynamic changes which includes presence of a fairly large number of insurers both life and non-

life segment. 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:

1. Low market penetration.2. Growth of customers interest with an increasing demand for better insurance products.3. Ever growing middle class component in population.4. Rebate from government in the form of tax incentives to be insured.


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Today, the Indian life insurance industry has a dozen private players, each of which are making

strides in raising awareness levels, introducing innovative products and increasing the

penetration of life insurance. Several of private insurers have introduced attractive products to

meet the needs of their target customers and in line with their business objectives. 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 turn of each companys strategy.

The health insurance sector has tremendous growth potential, and as it matures and new players

enter, product innovation and enhancement will increase. The deepening of the health database

over time will also allow players to develop and price products for larger segments of society.

Life insurance is also now being regarded as a flexible financial planning tool. Apart from the

traditional plans 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.

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 likely 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.


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CHAPTER 2

PROFILE OF THECOMPANY


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Company Profile

Pnb MetLife India Insurance Company Limited (Pnb MetLife) is an affiliate of MetLife,Inc. and

was incorporated between Punjab National Bank &MetLife International Holdings, Inc., The

Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors.

Pnb MetLife is one of the fastest growing life insurance companies in the country.

It serves its customers by offering a range of innovative products to individuals and group

customers at more than 600locations through its bank partners and company-owned

offices. Pnb MetLife has more than 50,000+ Financial Advisors, who help customers achieve

peace of mind across the length and breadth of the country. Pnb MetLi fe , Inc., th rough it s

affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and

Europe. Affiliated companies, outside of India, include the number one life insurer in the

United States (based on life insurance enforce), with over 140 years of experience and

relationships with more than 90of the top one hundred FORTUNE 500 companies.The

Pnb MetLife companies offer life insurance, annuities, automobile, and home insurance, retail

banking, and other financial service to individuals, as well as group insurance, reinsurance and

retirement and savings products and services to corporations and other institutions.

PNB MetLife India Insurance Company Limited (PNB MetLife) is a joint venture where

MetLife, Inc. and Punjab National Bank (PNB) are the majority shareholders. PNB MetLife was

previously known as MetLife India Insurance Company Limited (MetLife India). MetLife India

has been present in India since 2001.

PNB MetLife brings together the financial strength of one of the worlds leading life insurance

providers, MetLife, Inc., and the credibility and reliability of Punjab National Bank, one of


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India's oldest and leading nationalized banks. The vast distribution reach of PNB together with

the global insurance expertise and product range of MetLife makes PNB MetLife a strong and

trusted insurance provider.

The Company is present in over 150 locations across the country and serves customers in more

than 7,000 locations through its bank partnerships with PNB, the Jammu & Kashmir Bank

Limited and Karnataka Bank Limited.

PNB MetLife provides a wide range of protection and retirement products through its Agency

sales of over 24,000 financial advisors and bank partners, and provides access to Employee

Benefit plans for over 800 corporate clients in India. With its headquarters in Bangalore and

Corporate Office in Gurgaon, PNB MetLife is one of the fastest growing life insurance

companies in the country. The Company continues to be consistently profitable and has declared

profits for ten consecutive quarters as of Q3 2012-13.

PNB MetLife was previously known as MetLife India Insurance Company Limited (MetLife

India). MetLife India has been present in India since 2001.

DETAILS OF REGISTERED OFFICE:-

Brigade Sheshamahal

No. 5, Vani Villas Road

Basavanagudi,Bangalore-560004Fax:+91-80-22421970

Tel:-+91-80-26438638


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3.PNB METLIFE MISSION & VISION


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Our Vision and Mission

Build financial freedom for all through leadership in providing financial advice and

building long-term relationships through innovative protection, accumulation and

retirement products, robust underwriting processes and creating world-class customer

service experience for our customers.

We want to provide customers in India with world-class solutions for financial security,

and in the process add significant value to our shareholders, associates and society.

To be the first choice insurer for customers

To be the preferred employer for staff in the insurance industry.

To be the number one insurer for creating shareholder value.

As a responsible, customer focused market leader, we will strive to understand the insurance

needs of the consumers and translate it into affordable products that deliver value for money.


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4.ProductsPortfolio

Child plan

Met bhavishya Met junior endowment Met junior money back Met smart child

Savings

Met sukh Met suvidha Met saral Met 100

Protection

Met suraksha Met suraksha trop Met suraksha plus Met mortgage protector plus


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Rural

Met vishvas Met suvidhasaral Met grameenashray

Investment

Met smart platinum Met smart one Met easy super

Health

Met health care Met health cash

Monthly income

Met monthly income plan Met monthly income plan 7 pay Met monthly income plan 15 pay


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Retirement

MDMIP

Financial Performance Analysis

MetLife declared profits of 35 crore for the first time in the year ended March 2011, making it

one of the few profitable and growing life insurance in India

CONCEPTUAL FRAMEWORKThe insurance company in ULIPS collects money directly from investors. It serves as the

connecting bridge or a financial intermediary that allows a group of investors to pool their

money together with a predetermined investment objective. The income generated by selling

securities or capital appreciation of these securities is passed on to the investors in proportion to

their investment in the scheme. When an investor invests in a ULIPS, An investor is buying units

or portions of the Fund and thus on investing, become unit holder of the fund.

ULIPS operation flow chart

Investors

Fund

Managers

Securities

Return

Generates

Passed back

to

Invest in

Pool their

money with


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Asset Allocation

Asset Allocation is an investment strategy that aims to balance risk and reward by apportioning a

portfolio's assets according to an individual's goals, risk tolerance and investment horizon.

The three main asset classes - equities, fixed-income, and cash and equivalents - have different

levels of risk and return, so each will behave differently over time.

There is no simple formula that can find the right asset allocation for every fund. However, the

consensus among most financial professionals is that asset allocation is one of the most

important decisions that fund managers make. In other words, the selection of individual

securities is secondary to the way fund managers allocate the fund assets in stocks, bonds, and

cash and equivalents, which will be the principal determinants of the funds performance.

Asset-allocation of funds, also known as life-cycle, or target-date, funds, are an attempt to

provide customers with portfolio structures based on the variety of funds that address a

customers age, risk appetite and investment objectives with an appropriate apportionment of

asset classes. However, critics of this approach point out that arriving at a standardized solution

for allocating portfolio assets is problematic because every fund managers invests differently.

Fund Management

Fund Management is the professional management of various securities and assets (e.g., real

estate)in order to meet specified investment goals for the benefit of the investors. Investors may

be institutions (insurance companies, pension funds, corporations etc.) or private investors (both

directly via investment contracts and more commonly via collective investment schemes e.g.

mutual fundsor Insurance).
http://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Collective_investment_schemehttp://en.wikipedia.org/wiki/Collective_investment_schemehttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Collective_investment_schemehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Assethttp://en.wikipedia.org/wiki/Securities


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The term Fund management is often used to refer to the investment management of collective

investments, while the more generic fund management may refer to all forms of institutional

investment as well as investment management for private investors. Investment managers who

specialize in advisory or discretionary management on behalf of private investors may often refer

to their services as wealth management or portfolio management often within the context of so-

called "private banking".

The provision of 'investment management services' includes elements of financial statement

analysis, asset selection, stock selection, plan implementation and ongoing monitoring of

investments. Investment management is a large and important global industry in its own right

responsible for caretaking of trillionsof yen, dollars, euro, pounds and yen. Coming under the

remit offinancial servicesmany of the world's largest companies are at least in part investment

managers and employ millions of staff and create billions in revenue.

Fund manager refers to both a firm that provides investment management services and an

individual who directs fund management decisions.

Fund Manager

The person(s) responsible for implementing a fund's investing strategy and managing its

portfolio trading activities. A fund can be managed by one person, by two people as co-managers

and by a team of three or more people. Fund managers are paid a fee for their work, which is a

percentage of the fund's average assets under management.
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Performance measurement

Fund performance is often thought to be the acid test of fund management, and in the

institutional context, accurate measurement is a necessity. For that purpose, institutions measure

the performance of each fund (and usually for internal purposes components of each fund) under

their management, and performance is also measured by external firms that specialize in

performance measurement. The leading performance measurement firms compile aggregate

industry data, e.g., showing how funds in general performed against given indices and peer

groups over various time periods.

In a typical case (let us say an equity fund), then the calculation would be made (as far as the

client is concerned) every quarter and would show a percentage change compared with the prior

quarter (e.g., +4.6% total return in US dollars). This figure would be compared with other similar

funds managed within the institution (for purposes of monitoring internal controls), with

performance data for peer group funds, and with relevant indices (where available) or tailor-

made performance benchmarks where appropriate. The specialist performance measurement

firms calculate quartile and decile data and close attention would be paid to the ranking of any

fund.

Generally speaking, it is probably appropriate for an investment firm to persuade its clients to

assess performance over longer periods (e.g., 3 to 5 years) to smooth out very short term

fluctuations in performance and the influence of the business cycle. This can be difficult

however and, industry wide, there is a serious preoccupation with short-term numbers and the

effect on the relationship with clients (and resultant business risks for the institutions).


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An enduring problem is whether to measure before-tax or after-tax performance. After-tax

measurement represents the benefit to the investor, but investors' tax positions may vary. Before-

tax measurement can be misleading, especially in regimens that tax realized capital gains (and

not unrealized). It is thus possible that successful active managers may produce miserable after-

tax results. One possible solution is to report the after-tax position of some standard taxpayer.

Theoretical Back Ground

ULIPs

Meaning

A unit-linked insurance plan (ULIP) is a type oflife insurancewhere thecash valueof a policy

varies according to the current net asset value of the underlying investment assets. It allows

protection and flexibility in investment, which are not present in other types of life insurance

such as whole life policies. The premium paid is used to purchase units in investment assets

chosen by the policyholder

How ULIPs work

ULIPs work on the lines of mutual funds. The premium paid by the client (less any charge) is

used to buy units in various funds (aggressive, balanced or conservative) floated by the insurance

companies. Units are bought according to the plan chosen by the policyholder. On every

additional premium, more units are allotted to his fund. The policyholder can also switch among

the funds as and when he desires. While some companies allow any number of free switches to

the policyholder, some restrict the number to just three or four. If the number is exceeded, a

certain charge is levied.
http://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Life_insurancehttp://en.wikipedia.org/wiki/Cash_valuehttp://en.wikipedia.org/wiki/Cash_valuehttp://en.wikipedia.org/wiki/Cash_valuehttp://en.wikipedia.org/wiki/Net_asset_valuehttp://en.wikipedia.org/wiki/Net_asset_valuehttp://en.wikipedia.org/wiki/Whole_life_policyhttp://en.wikipedia.org/wiki/Whole_life_policyhttp://en.wikipedia.org/wiki/Unitised_insurance_fundhttp://en.wikipedia.org/wiki/Unitised_insurance_fundhttp://en.wikipedia.org/wiki/Unitised_insurance_fundhttp://en.wikipedia.org/wiki/Whole_life_policyhttp://en.wikipedia.org/wiki/Net_asset_valuehttp://en.wikipedia.org/wiki/Cash_valuehttp://en.wikipedia.org/wiki/Life_insurance


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Individuals can also make additional investments (besides premium) from time to time to

increase the savings component in their plan. This facility is termed "top-up". The money parked

in a ULIP plan is returned either on the insured's death or in the event of maturity of the policy.

In case of the insured person's untimely death, the amount that the beneficiary is paid is the

higher of the sum assured (insurance cover) or the value of the units (investments). However,

some schemes pay the sum assured plus the prevailing value of the investments.

Types of ULIPs

ULIPs for retirement planning ULIPs for long term wealth creation ULIPs for child education ULIPs for health solutions

Recent modification in ULIPs by IRDA

Initial charges:Premium paid by investors in ULIPs is partly used for insurance and partly for

making investments. However, for the first 2 -3 years of the term of the policy, insurance

companies charged heavily. Sometimes insurance companies diverted as much as 80 percent of

the premium payments towards these charges.

Initial charges are basically used for administration charges, processing fees etc. Therefore the

charges should be extremely low.


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Facility to surrender policy:Sometimes policyholders need immediate funds, and then they opt

to surrender their policy. But the problem is, the long term consequences of surrendering the

policy early had an adverse impact on the policyholder's investments.

The surrender charges on policy were high. Some companies confiscated up to 60 per cent of the

policy value in case the policyholder surrendered his policy.

ULIPs give back most when its invested as long term basis. Hence early withdrawal should be

discouraged.

Advantages

1. The accretion to the fund invested can be checked on daily basis unlike the traditionalpolicies.

2. There is lot more flexibility like partial withdrawal, switching, redirection, earlywithdrawal, Sum Assured reduction, top up contribution, etc....

3. Charges are transparent in nature, with the latest AML guidelines insisting on commonnomenclature of charges for all insurance companies.

4. The customer can time the market by exercising switch options and make the most whenmarkets are zooming or choose to be conservative when markets are falling. Its thus

win-win situation

5. He gets a life cover at a nominal cost unlike mutual funds,6. Stages in one life like education of children, marriage, and retirement needs can be

soundly planned by the help of ULIPs.

7. Tax advantages are also offered by the ULIPs.


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Disadvantages

1. Investors find it difficult to understand capital market and how ULIP works2. ULIPS are attractive for risk taking people and less attractive for risk adverse people3. Some consider taking term insurance and a mutual fund as a combination to beat the

ULIP.

4. Some consider charges levied exorbitant and not commensurate to the returns offered.5. The complicated design of the policies makes them less aware of the product features and

chances of misuse by agents are very high.

The Role of a fund Manager

The Prime Goal of a Fund Manager is to monitor and manage the securities (in the form of

stocks, bonds amongst others) to meet the investment goals and objectives of the customers

(investors). The services include financial analysis on the investments, the assets that are

invested upon and the stocks selected. The plan and strategy that is implemented is also to be

closely monitored so that in the longer run, risks on loosing out on major dividends can be

avoided. A certified company investment advisor should conduct an assessment of each client's

individual needs and risk profile. The advisor then recommends appropriate investments. The art

of managing investments is an important aspect in its own right and involves a lot of money at a

single moment taking care of trillions of dollars, euro, pounds and yen and other major Global

economies.

The budget of an investment management firm directly depends on the Asset Allocation that is

made by the Fund Manager for the investors. Asset Allocation involves a lot of money at stake at


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a go, because at one time you are investing one more than one commodity. Moreover Asset

Allocation has more predictive power than the choice of individual holdings in determining

portfolio/investment return. The real test and skill proof of a Fund Manager truly lies in handling

asset allocations and individual investments separately so that the competition that the

investment faces from other competing funds is handled with care. Another important factor that

a Fund Manager has got to take care of is the diversification in assets once an investment is being

made. It is always advisable to investors to invest in more then one commodities at a time. A

fund does fluctuate and varies with market conditions, so if an investor looses out on the

dividend from one investment he has the other to gain from. As it is people investing in Mutual

Funds do gain from long term returns.

There are numerous ways to invest in a Fund. It depends upon the risk you are willing to

undertake and your expected dividends from your investments. Fund performance is the main

test of fund management and for the investment management firm as well. In order to be sure

that fund they are monitoring, the firm measures the performance of each fund they are

managing. The performance of a Fund shouldn't be decided on the returns provided alone, as

there are several other factors associated with it. Whether the return was worth the risk taken,

Performance of the fund compared to their competitors and finally whether the portfolio

management results were due to luck or the manager's skill. A Fund Manager is hence compared

to God when it comes to Fund Investments.

ULIPs are almost similar to Mutual funds. Only difference in ULIPs is it covers the risk also.


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Major Problems For fund Management Companies

Revenue is directly linked to market valuations, so a major fall in asset prices causes aprecipitous decline in revenues relative to costs;

Above-average fund performance is difficult to sustain, and clients may not be patientduring times of poor performance;

Successful fund managers are expensive and may be headhunted by competitors; Above-average fund performance appears to be dependent on the unique skills of the

fund manager; however, clients are loath to stake their investments on the ability of a few

individuals- they would rather see firm-wide success, attributable to a single philosophy

and internal discipline;

Analysts who generate above-average returns often become sufficiently wealthy that theyavoid corporate employment in favor of managing their personal portfolios.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA

The Insurance Regulatory and Development Authority (IRDA) is a national agency of the

Government of India,based inHyderabad.It was formed by an act of Indian Parliament known

as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements.

Mission of IRDA as stated in the act is "to protect the interests of the policyholders, to regulate,

promote and ensure orderly growth of the insurance industry and for matters connected therewith

or incidental thereto."In 2010, the Government of India ruled that the Unit Linked Insurance

Plans(ULIPs) will be governed by IRDA, and not the market regulatorSecurities and Exchange

Board of India
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DUTIES, POWERS AND FUNCTIONS OF IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA

1. Subject to the provisions of this Act and any other law for the time being in force, theAuthority shall have the duty to regulate, promote and ensure orderly growth of the

insurance business and re-insurance business.

2. Without prejudice to the generality of the provisions contained in sub-section (1), thepowers and functions of the Authority shall include,

I. Issue to the applicant a certificate of registration, renew, modify, withdraw,suspend or cancel such registration;

II. Protection of the interests of the policy holders in matters concerning assigning ofpolicy, nomination by policy holders, insurable interest, settlement of insurance

claim, surrender value of policy and other terms and conditions of contracts of

insurance;

III. Specifying requisite qualifications, code of conduct and practical training forintermediary or insurance intermediaries and agents;

IV. Specifying the code of conduct for surveyors and loss assessors;V. Promoting efficiency in the conduct of insurance business;

VI. Promoting and regulating professional organizations connected with the insuranceand re-insurance business;

VII. Levying fees and other charges for carrying out the purposes of this Act;


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VIII. Calling for information from, undertaking inspection of, conducting enquiries andinvestigations including audit of the insurers, intermediaries, insurance

intermediaries and other organizations connected with the insurance business;

IX. Control and regulation of the rates, advantages, terms and conditions that may beoffered by insurers in respect of general insurance business not so controlled and

regulated by the Tariff Advisory Committee under section 64U of the Insurance

Act, 1938 (4 of 1938);

X. Specifying the form and manner in which books of account shall be maintainedand statement of accounts shall be rendered by insurers and other insurance

intermediaries;

XI. Regulating investment of funds by insurance companies;XII. Regulating maintenance of margin of solvency;

XIII. Adjudication of disputes between insurers and intermediaries or insuranceintermediaries;

XIV. Supervising the functioning of the Tariff Advisory Committee;XV. Specifying the percentage of premium income of the insurer to finance schemes

for promoting and regulating professional organizations referred to in clause (f);

XVI. Specifying the percentage of life insurance business and general insurancebusiness to be undertaken by the insurer in the rural or social sector; and

XVII.

Exercising such other powers as may be prescribed from time to time.


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Protection of the interest of policy holders:

IRDA has the responsibility of protecting the interest of insurance policyholders. Towards

achieving this objective, the Authority has taken the following steps:

IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policyproposal documents in easily understandable language; claims procedure in both life and non-

life; setting up of grievance redressal machinery; speedy settlement of claims; and

policyholders' servicing. The Regulation also provides for payment of interest by insurers for

the delay in settlement of claim.

The insurers are required to maintain solvency margins so that they are in a position to meettheir obligations towards policyholders with regard to payment of claims.

It is obligatory on the part of the insurance companies to disclose clearly the benefits, terms andconditions under the policy. The advertisements issued by the insurers should not mislead the

insuring public.

All insurers are required to set up proper grievance redress machinery in their head office and attheir other offices.

The Authority takes up with the insurers any complaint received from the policyholders inconnection with services provided by them under the insurance contract.

The institution of Insurance Ombudsman was created by a Government of India Notificationdated 11th November, 1998 with the purpose of quick disposal of the grievances of the insured

customers and to mitigate their problems involved in redressal of those grievances. This

institution is of great importance and relevance for the protection of interests of policy holders


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and also in building their confidence in the system. The institution has helped to generate and

sustain the faith and confidence amongst the consumers and insurers.

Insurance Ombudsman

The governing body of insurance council issues orders of appointment of the insurance

Ombudsman on the recommendations of the committee comprising of Chairman, IRDA,

Chairman, LIC, Chairman, GIC and a representative of the Central Government. Insurance

council comprises of members of the Life Insurance council and general insurance council

formed under Section 40 C of the Insurance Act, 1938. The governing body of insurance council

consists of representatives of insurance companies.

Terms of office

An insurance Ombudsman is appointed for a term of three years or till the incumbent attains the

age of sixty five years, whichever is earlier. Re-appointment is not permitted.

Territorial jurisdiction of Ombudsman

The governing body has appointed twelve Ombudsmen across the country allotting them

different geographical areas as their areas of jurisdiction. The Ombudsman may hold sitting at

various places within their area of jurisdiction in order to expedite disposal of complaints. The

offices of the twelve insurance Ombudsmen are located at (1) Bhopal, (2) Bhubaneswar, (3)

Cochin, (4) Guwahati, (5) Chandigarh, (6) New Delhi, (7) Chennai, (8) Kolkata, (9) Ahmedabad,

(10) Lucknow, (11) Mumbai, (12) Hyderabad. The area of jurisdiction of each Ombudsman has

been mentioned in the list of Ombudsman


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Office Management

The Ombudsman has a secretarial staff provided to him by the insurance council to assist him in

discharging his duties. The total expenses on Ombudsman and his staff are incurred by the

insurance companies who are members of the insurance council in such proportion as may be

decided by the governing body.

Removal from office

An Ombudsman may be removed from service for gross misconduct committed by him during

his term of office. The governing body may appoint such person as it thinks fit to conduct

enquiry in relation to misconduct of the Ombudsman. All enquiries on misconduct will be sent to

Insurance Regulatory and Development Authority which may take a decision as to the proposed

action to be taken against the Ombudsman. On recommendations of the IRDA, the Governing

Body may terminate his services, in case he is found guilty.

Power of Ombudsman

Insurance Ombudsman has two types of functions to perform (1) conciliation, (2) Award

making. The insurance Ombudsman is empowered to receive and consider complaints in respect

of personal lines of insurance from any person who has any grievance against an insurer. The

complaint may relate to any grievance against the insurer i.e. (a) any partial or total repudiation

of claims by the insurance companies, (b) dispute with regard to premium paid or payable in

terms of the policy, (c) dispute on the legal construction of the policy wordings in case such

dispute relates to claims; (d) delay in settlement of claims and (e) non-issuance of any insurance


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document to customers after receipt of premium. Ombudsman's powers are restricted to

insurance contracts of value not exceeding Rs. 20 lakhs. The insurance companies are required to

honour the awards passed by an Insurance Ombudsman within three months

Manner of lodging complaint

The complaint by an aggrieved person has to be in writing, and addressed to the insurance

Ombudsman of the jurisdiction under which the office of the insurer falls. The complaint can

also be lodged through the legal heirs of the insured. Before lodging a complaint:

I.The complainant should have made a representation to the insurer named in thecomplaint and

the insurer either should have rejected the complaint or the complainant have not

received any reply within a period of one month after the concerned insurer has received

his complaint or he is not satisfied with the reply of the insurer.

II.The complaint is not made later than one year after the insurer had replied.

III.The same complaint on the subject should not be pending with before any court, consumer

forum or arbitrator.

Recommendations of the Ombudsman

When a complaint is settled through the mediation of the Ombudsman, he shall make the

recommendations which he thinks fair in the circumstances of the case. Such a recommendation

shall be made not later than one month and copies of the same sent to complainant and the

insurance company concerned. If the complainant accepts recommendations, he will send a

communication in writing within 15 days of the date of receipt accepting the settlement.


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Award

The ombudsman shall pass an award within a period of three months from the receipt of the

complaint. The awards are binding upon the insurance companies. If the policy holder is not

satisfied with the award of the Ombudsman he can approach other venues like Consumer Forums

and Courts of law for redressal of his grievances.

As per the policy-holder's protection regulations, every insurer shall inform the policy holder

along with the policy document in respect of the insurance Ombudsman in whose jurisdiction his

office falls for the purpose of grievances redressal arising if any subsequently. Steady increase in

number of complaints received by various Ombudsman shows that the policy-holders are

reposing their confidence in the institution of Insurance Ombudsman.

APPLICATION OF INFORMATION TECHNOLOGY IN INSURANCE SECTOR

There is an evolutionary change in the technology that has revolutionized the entire insurance

sector. Insurance industry is a data-rich industry, and thus, there is a need to use the data for

trend analysis and personalization.

With increased competition among insurers, service has become a key issue. Moreover,

customers are getting increasingly sophisticated and tech-savvy. People today dont want to

accept the current value propositions, they want personalized interactions and they look for more

and more features and add ones and better service

The insurance companies today must meet the need of the hour for more and more personalized

approach for handling the customer. Today managing the customer intelligently is very critical

for the insurer especially in the very competitive environment. Companies need to apply

different set of rules and treatment strategies to different customer segments. However, to


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personalize interactions, insurers are required to capture customer information in an integrated

system.

With the explosion of Website and greater access to direct product or policy information, there is

a need to developing better techniques to give customers a truly personalized experience.

Personalization helps organizations to reach their customers with more impact and to generate

new revenue through cross selling and up selling activities. To ensure that the customers are

receiving personalized information, many organizations are incorporating knowledge database-

repositories of content that typically include a search engine and let the customers locate the all

document and information related to their queries of request for services. Customers can hereby

use the knowledge database to manage their products or the company information and invoices,

claim records, and histories of the service inquiry. These products also may be able to learn from

the customers previous knowledge database and to use their information when determining the

relevance to the customers search request.

There is a probability of a spurt in employment opportunities. A number of web-sites are coming

up on insurance, a few financial magazines exclusively devoted to insurance and also a few

training institutes being set up hurriedly. Many of the universities and management institutes

have already started or are contemplating new courses in insurance. Life insurance has today

become a mainstay of any market economy since it offers plenty of scope for garnering large

sums of money for long periods of time. A well-regulated life insurance industry which moves

with the times by offering its customers tailor-made products to satisfy their financial needs is,

therefore, essential if we desire to progress towards a worry-free future


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The different portfolio strategies available in ULIPS

An Portfolio strategy is a set of rules, behavior or procedures, designed to guide an investors

selection on a portfolio. Usually the strategy will be designed around the investors risk-return

trade off. Some investor will prefer to maximize expected returns by investing in risky assets,

other will prefer to minimize risk, but most will select a strategy somewhere in between. Investor

does not know how to invest in which fund so that where insurance companies provides an

option for a investor to select a strategy for investment as per his risk appetite

There are two types of strategy in insurance sector:

Passive strategy Active strategyPassive strategy: It is a strategy in which an investor invests in accordance with a

predetermined strategy that doesnt entail any forecasting. (E.g. any use of market timing or

stock picking would not qualify as passive management.). The idea is to minimize investing

fees and to avoid the adverse consequence of falling to correctly anticipate the future. The

most popular method is to mimic the performance of an externally specified index. Retail

investors typically do this by buying one or more index funds. By tracking an index, an

investment portfolio typically gets good diversification, low turnover (good for keeping

down internal transaction costs), and extremely low management fees. With low

management fees, an investor in such strategy would have higher returns than a similar

investment but higher management fees and /or turnover /transaction costs.

Active strategy: It is also refers as portfolio management strategy where the manager makes

specific investment with a goal of outperforming an investment benchmark index. Investors


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or funds that do not aspire to create a return in excess of the benchmark index will often

invest in an index fund that replicates as closely as possible the investment weighting and

returns of that index; this is called a passive strategy. Active strategy is the opposite of

passive strategy, because in passive strategy the fund manager does not seek to outperform

the benchmark index

Existing portfolio strategies in insurance sector:

I. Fixed portfolio Strategy: In this strategy investor have a option in ulip to allocate his allsaving which he wants to invest in the fund of his choice including a option to guarantee

the highest NAV achieved by his fund

II. Life cycle based portfolio strategy: It is a unique and personalized strategy to create anideal balancebetween equity and debt, based on investors age

III. Trigger portfolio strategy:A unique portfolio strategy to protect gains made in equitymarket from any feature equity market volatility while maintaining a pre-defined assets

allocation. It books gains made in equity market and reinvest these gains in the funds of

your choice.

IV. Investor selectable portfolio strategy: In this strategy insurance company offersallocation of premiums based on investors personal choice and decisions. An investor

can opt any fund or mixture any two or three fund as per his personal choice and

decisions


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V. Self managedoption:Under this strategy an investor can manage his investment bychoosing among the six unit linked option available in met life India. In this strategy

investor has an option of switching among various funds & may choose premium

redirection for his future premiums depending on his changing risk appetite and market

conditions

VI. Systematic transfer option: this is an strategy allows an investor to make the most ofmarket volatility by taking the advantage of rises and falls in the market with the benefit

of rupee cost averaging. In this strategy 50% of annualized premium is been invest in

protector II fund and rest of fund will be as per investors choice and this fund which is

been kept in protector II will be systematically transferred from protector II to flexi cap

as per market volatility. If market rises the fund systematically transferred to flexi from

protector II & if market falls then the MR.X funds transfer to Protector II from flexi cap

VII. Auto rebalancing option:Auto rebalancing is strategy which helps an investor with hisinvestment, in this strategy the investment proportion of investor will automatically

rebalanced as per market conditions. Under this option, the capital is only invested in two

funds i.e. flexi cap & protector II. In this strategy a trigger level has been created for e.g.

if a investor opt for 10% of total fund as a trigger level then any increase ordecrease in

total fund value of a investor will rebalance the ratio of flexi cap & protector fund which

was at the time of inception.


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Example of met life portfolio strategy:

Suppose there is a MR. X, he is willing to invest 5, 00,000 in ulip funds with a purpose of

investment. The risk appetite of investor was medium. Investor was willing to invest for his

better retirement, so an advisor helps him with a met smart platinum where MetLife was offering

a wealth creation & a protection under this plan with offering to select any fund or any mix of

debt & equity under this plan with different portfolio strategies like self managed option, auto

rebalancing , systematic transfer option.

Lets understands the portfolio strategies of met life:

Self managed option: under this strategy met smart platinum offer to MR. X the choice of 6

unit linked funds for investment based on MR. X propensity to take risk. MR.X may choose to

invest his premium in these unit linked funds in any proportion aggregating to a total of 100%

subject to a minimum allocation in chosen funds not being less than 20%.

In this strategy MR. X can mange his investment by himself. He can choose any fund which suits

him better at any point of time in a policy year or switch to any fund in between of policy .

Systematic transfer option:under this plan, STO allows to MR. X to make the most of market

volatility by taking the advantage of rises and falls in the market with the benefit of rupee cost

averaging.

This option can be taken by MR.X at time of policy inception or during the term of the policy. If

MR.X chooses STO option, then the premium allocation percentage should be at least 50% of

annualized premium in protector II fund and then this protector fund systematically transferred

from protector II to flexi cap as per the market volatility. If market rises the fund of MR.X

systematically transferred to flexi from protector II & if market falls then the MR.X funds

transfer to Protector II from flexi cap.


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So, this option provides the flexibility to MR.X to take an advantage of market volatility to

appreciate his capital.

Auto rebalancing option: Auto rebalancing is strategy which helps an investor with his

investment, in this strategy the investment proportion of investor will automatically rebalanced

as per market conditions. Under this option, the capital is only invested in two funds i.e. flexi cap

& protector II. In this strategy a trigger level has been created for e.g. if a investor opt for 10% of

total fund as a trigger level then any increase or decrease in total fund value of a investor will

rebalance the ratio of flexi cap & protector fund which was at the time of inception.

This option suits to MR.X if he wants to manage his investment portfolio directly on the regular

basis. Under this option, MR.Xs funds are allocated in flexi cap fund and protector II fund in the

proportion as per MR.Xs choice which he can exercise at the time of opting for auto rebalancing

option. In case of any market movement, to a level as specified by him, the mix of flexi cap

fund & protector II fund is automatically rebalanced to the ratio chosen by MR.X at inception of

this option.

As this strategy works on trigger level, MR.X has 4 rebalancing option available with met life:

10% of the total fund value 15% of the total fund value 20% of the total fund value 25% of the total fund value


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These are three portfolio strategies which an financial advisor of Met life has offered to MR.X.

These three strategies are been different among themselves. Every strategy has their own benefit

depends on investors risk appetite and market knowledge.


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5.Management Team

Managing Director Mr.Rajesh Relan

Director Agency Mr.GirishMalhotra

Director - BA & BP Mr.Sameer Bansal

Director Marketing Mr.Pankaj Raj

Director - Business Support Mr.Sankaran P S

Deputy Director - Corporate Sales & Sales Training Mr.PreetinderChadha

Appointed Actuary Mr.Phanesh M S V S

Director Finance Mr.Nick Taket

Director - Financial Planning & Controller Mr.K R Anil Kumar

Director - IT & Facilities Mr.K S Raghavan

Director - Human Resources Mr.AmitaMaheshwari

Deputy Director - Strategic Initiatives & Business

Transformation

Mr.Vijay Raghavan

Deputy Director Operations Mr.Gaurav Sharma


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MARKET SHARE & POSITION OF COMPANY

Commencement of operations in 2001.

Presence in 132 cities through 192 offices & growing.

Presence in 686 cities through 1910 offices through bank partners

Paid up capital of Rs. 1240 crore

Total Sum assured in force Rs 39,71,611(in lakhs)

Market Share as a company has come up from 1.8% to 2.4% Total Number of livescovered 13,77,250 ( in lakhs )

Number of employees 7688, Number of Advisors 56,072 and growing.

Widest product basket in the market with 28 products.


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CHAPTER 3

OBJECTIVES OF THE

STUDY


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OBJECTIVES OF THE STUDY

Indian insurance sector is comprises of various investment and protection plan with various

funds, investment objectives & portfolio strategies for an investor it is very difficult to select any

particular fund for investment. This present study has an objective of find out the assets

allocation of met life and fund management.

The specific objectives of study are:

1. To analyze the fund option available at met life and measure their past performance.2. To explore different portfolio strategies available at met life for an investor for maximum

returns.

3. To compare the funds of the met life against others in the industry


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CHAPTER 4

SWOT ANALYSIS OF THE

COMPANY


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STRENGTH

1.Premium rates are increasing and so are commissions.

2.The variety of products are increasing.

3. Customers expectes more services from their brokers.

WEAKNESS

1.Companies are slow respond to changing need.

2. Increasing trend of financial weakness among the companies.

3. More competitors for agencies to compete with banks and internet players.

OPPORTUNITIES

1.Ability to cross sell financial services barely being tapped.

2. Technology is improving to that point that paperlass transactions are available.

3. Clients increasing need for insurance consultant can open new ways to service the client and

generate income.

THREAT

1.Increasing cost and need for insurance might hit a point where a backlash will occur.

2.Incresing expenses and lower profit margins can hit smaller agencies and insurance companies.


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PROFIT AND LOSS AND BALANCE SHEET FOR THE YEAR 2010-11


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BALANCE SHEET FOR THE YEAR 2010-11


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CASH FLOW STATEMENT


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PROFIT AND LOSS ACCOUNT FOR THE YEAR 2011-12


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BALANCE SHEET FOR THE YEAR 2011-12


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CASH FLOW STATEMENT FOR THE YEAR 2011-12


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CHAPTER 5

RESEARCHMETHODOLOGY


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RESEARCH METHODOLOGY

Research design

Research design is considered as a "blueprint" for research, dealing with at least four problems:

which questions to study, which data are relevant, what data to collect, and how to analyze the

results. The best design depends on the research question as well as the orientation of the

researcher.

Data collection method

Primary source:

Primary sources are originalmaterials.Information for which the writer has no personal

knowledge is not primary, although it may be used by historians in the absence of a primary

source. In the study of history as an academic discipline, a primary source (also called original

source or evidence) is an artifact, a document, a recording, or other source of information that

was created at the time under study is called primary source.

Secondary source:

When an investor uses the data which has already been collected by the others, such data is

called secondary data. The data is primary data for the agency that collects it and it becomes

secondary data for someone else who uses this data for his own purpose.

Secondary data for the study is collected from internet, government publication, publications of

professional and research organization. Following are few sources for secondary data.
http://en.wikipedia.org/wiki/Documenthttp://en.wikipedia.org/wiki/Documenthttp://en.wikipedia.org/wiki/Documenthttp://en.wikipedia.org/wiki/Document


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Model of Research

The present research is conducted for analysing a quantitative data. Hence, the Research model

selected is descriptive research

Descriptive Research

Descriptive research attempts to determine, describe, or identify what is. It uses description,

classification, measurement and comparison to describe a situation. The main characteristic is

that the researcher has no control over variables. He only reports the situation as it is at the time.

The term ex-post facto is usually used for descriptive research studies in social sciences. The

survey method is commonly used in descriptive research.


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CHAPTER 6

DATA INTERPRETATION &

ANALYSIS


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1. To analyze the funds available at met life and measure their past

performance.INVESTMENT PHILOSPY

To invest 100% in government and other debt instrument to meet the stated objective of

the company and the expectation of the customer.

SECURITY NAME WEIGHT RATING

Government security 34.74%

GOI 2024 11.09% Sovereign

GOI oil bond 2012 10.46% Sovereign



Others 0.15%

Corporate bonds 50.60%

IL&FS 7.63% AAA

TATA sons Ltd 7.45% AAA

LIC Housing Finance

company Ltd

6.99% AAA

Reliance Industries Ltd 6.59% AAA

Power grid corporation Ltd 5.33% AAA

HDFC 4.32% AAA

Power finance corporation 3.17% AAA

Indian railway financial

corporation

2.76% AAA

Reliance capital Ltd 2.72% AAA

Reliance Gas TransportationInfrastructure

2.48% AAA

Others 1.16%

Cash &money market 14.65%

TOTAL 100.00%


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Investment philosophy

The company target to invest 50% in equity and 50% investment in Government and other debt

securities to meet stated objective. Here company tries to appreciate the capital and current

income through judicious mix of investment in equities and other fixed income securities.

Portfolio of balancer II

SECURITY NAME WEIGHT RATING

Government securities 7.76%



GOI oil bond 2012 1.09% Sovereign

Others 0.09%

Corporate bonds 33.08%

LIC Housing finance company 8.23% AAA

0.00% 2.00% 4.00% 6.00% 8.00%

IL&FSTATA sons Ltd

LIC Housing Finance company

Reliance Industries Ltd

Power grid corporation Ltd

HDFC

Power finance corp.

IRFC

Reliance capid.tal Lt

Reliance Gas transp.

others

percentage of bonds investment

percentain bondsge of

investment


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Ltd.

IL&FS 8.02% AAA

TATA &sons 7.24% AAA

Reliance Gas Transport

Infrastructure

4.70% AAA

HDFC 2.72% AAA

Reliance Infrastructure Ltd 1.05% AA+

Other 1.11%

Equities 47.30%

ITC Ltd. 2.97%

Infosys Ltd. 2.85%

HDFC Bank Ltd. 2.15%

HDFC 2.10%

ICICI Bank Ltd. 2.02%

Reliance Industries Ltd. 1.85%

TATA Consultancy services 1.82%

Larsen & Turbo Ltd. 1.39%

Oil & Natural gas 1.34%

State Bank Of India 1.32%

Tata Motors Ltd. 1.16%

Hindustan Unilever Ltd. 1.04%

BhartiAirtel Ltd. 1.01%

Others 24.30%

Cash & Money market 11.86%

TOTAL 100.00%


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Graph of equity Investment

government

securities

8%

corporate

bonds

33%

equity

47%

cash & money

market

12%

assets allocation

0.00%

10.00%

20.00%

30.00%

ITC

Ltd.

Infosys

HDFC

HDFC

ICICI

Reliance

Larsen&

Tata

Hindusta

Bharti

others

shares

shares


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Equity sectorial Breakup

Investment philosophy

To invest 100% in equities of those companies who are promoting healthy lifestyle and

enhancing quality of life to meet the stated objective.

Portfolio of Virtue II

SECURITY NAME WEIGHT

Equity 93.61%

ITC Ltd. 7.48%Infosys Ltd. 6.29%

ICICI Bank Ltd 5.69%

Reliance Industries Ltd. 5.56%

HDFC Bank Ltd. 5.27%

HDFC 5.19%

Larsen & Turbo 4.33%

Tata consultancy services ltd. 3.96%

State Bank of India 3.65%

Oil and Natural Gas 2.87%

Hindustan Unilever Ltd. 2.74%

BhartiAirtel Ltd. 2.51%

8%

5%

11%

3%

15%

25%7%

20%

6%

% shares

automobile

power

oil & gas

media & telecom

IT

Finance

engineering & construction


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Tata motors ltd 2.22%

Axis Bank Ltd. 2.02%

Sun Pharmaceuticals Ltd. 1.90%

Tata steels Ltd. 1.80%

Mahindra & Mahindra Ltd. 1.75%

Dr.Reddys Laboratory Ltd. 1.61%

Coal India Ltd. 1.56%

HCL technologies Ltd. 1.32%

BPCL 1.24%

Jindal Steels & Power Ltd. 1.23%

NTPC 1.23%

Wipro 1.22%

Gail( India ) Ltd. 1.18%

Bajaj Auto Ltd. 1.17%

Cipla Ltd. 1.16%

Maruti Suzuki India Ltd. 1.07%

Tata Power co. Ltd. 1.06%

Hindalco Industries Ltd. 1.04%

Others 11.17%

Cash & Money market 6.39%

TOTAL 100.00%


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Graph Representing equity share in companies

NAV Movement of Virtue II

0.00%

2.00%

4.00%

6.00%

8.00%

Series 1

Series 1


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Tasis Sharia 50 index performance from Dec 2010 till 2 July 2012

Analysis:

According to above statements and graphs it is been acknowledged that the company is investing

93% in equities and 7% in cash & money market. This fund is invested in those companies who

are promoting healthy life cycle and enhancing the quality of life. This fund works on the model

of sharia compliant fund as it has been managed as per the fundamentals of Islamic investment.

Many insurance companies and AMC are using these funds to attract the Islamic investor. As in

this fund company is invested 93% in equity as same as in multiplier II but the capital has been

invested in those companies who are as per the fundamentals of Islamic investment. The NAV of

virtue II is performing as per sharia 50 index. In virtue II company has invested in those

companies which are fulfilling these conditions:

Not involved in any such trades which are treated as unethical and immoral. Stocks that passed the financial ratio clause of taqwa advisory board. Stocks are screened

for Debt, cash and interest bearing securities and receivables as against their trailing

twelve months (TTM) market cap.


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FINANCIAL RATIOS

1 Total debt to Average TTM market cap less than 33%

2 Cash+interest bearing investment to average TTM market cap less than 33%

3. Sundry debtors to average TTM market cap less than 33%

4 Interest income to total Income less than 5%

Who all companies are fulfilling the above conditions are invested under this fund. In this fund

met life India is using sharia 50 index for the benchmark.

This fund is good option for Islamic investors as this fund full fill the Islamic condition for

investment.

The currently the return in this fund is only 1% but this is a good option for people who follows

the Islamic principles of investment.

To compare the funds of met life with different insurance companies of this

sector.

Under this objective the different funds of met life are compared with Aviva & SBI life on the

basis of their benchmark and actual return. For comparison the data has been taken for last three

years. Basically ulips are divided into four heads as follows:

Growth Fund 100% Equity

Balance Fund 60% Equity, 40% Debt

Debt Fund 100% Debt

Money Market Fund 100% mm instrument for a period of one year


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A. Equity fundsMETLIFE SBI AVIVA

Flexi cap Equity fund Enhancer fund

Multiplier II Index fund Index fund

Virtue II P/E managed fund PSU fund

Equity pension fund Infrastructure fund

Benchmark (%) Returns (%)

Met life

Flexi cap -1.9% -2.5%

multiplier 3.4% 2.5%

Virtue II 1.0%SBI

Equity fund 3.44% 6.6%

p/e managed fund -7.18%

Index Fund -2.73% -2.07%

Aviva

Enhancer fund 3.4% 2.4%

Index fund 3.4% 3.9%

PSU fund( since inception ) -14.1% -9.2%

Infrastructure fund (since

inception )

-19.5% -11.2%

-4.00%

-2.00%

0.00%

2.00%

4.00%

met life

benchmark

Returns

-10.00%

-5.00%

0.00%

5.00%

10.00%

SBI

Benchmark

Returns


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Analysis:

In equity fund all three insurance companies has invested their fund fully 100 % in equity

market. The fund managers of Met life, SBI &Aviva had set their benchmark as per the sensex.

Only SBI equity fund and Aviva index fund has over performed against their benchmark where

Met life had under performed.

b. Balanced fund

METLIFE SBI AVIVA

Balancer Balanced fund Balancer fund

Benchmark Returns

Metlife

Balancer 4.7% 4.4%

SBI

Balanced fund 5.17% 5.49%

Aviva

Balanced fund 5.7% 4.7%

-20.00%

-10.00%

0.00%

10.00%

Enhancer Index fund PSU fund Infrastruture

fund

AVIVA

benchmark

Returns


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Analysis:

Balanced funds are those funds in equity & debt is mixed. This fund is very good option for

investor here there is a mixture of equity and debt that why any loss in equity can be balanced by

debt portion. In this only SBI had over performed with return of 5.49% against its benchmark of

5.17% and both Met life and Aviva had under performed.

C.Debt fund

METLIFE SBI AVIVA

Protector Bond fund Secure fund

Preserver Protector

Benchmark Returns

MetLife

Protector 5.9% 6.9%

Preserver 6.0% 4.8%

SBI

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Met life SBI AVIVA

Balanced funds

Benchmark

Return


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Bond fund 5.88% 7.47%

Aviva

Secure fund 5.9% 5.4%

Protector 5.8% 5.6%

Analysis:

In debt fund all three insurance companies had 100% invested their funds in debt either in

corporate bonds or in government securities. In this fund all three insurance companies had

performed quite good but met life & SBI had over performed against their benchmark. Aviva had

quite managed to perform only.

0.00%

2.00%

4.00%

6.00%

8.00%

Met life

Benchmark

Returns

0.00%

2.00%

4.00%

6.00%

8.00%

Bond Fund

SBI

Benchmark

Returns

5.00%

5.50%

6.00%

Secure Fund Protector

Aviva

Benchmark

Returns


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CHAPTER 7

FINDINGS &

RECOMMENDATIONDS


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Scope of study

This study will help to understand portfolio construction, evaluation, revision of insurance funds

of Met life India insurance, at the same times gives an idea whether companies is gaining

maximum returns or not, also helps in understanding the different strategies available in met life

and helps in evaluating whether the funds of met life are performing against other insurance

companies or not.

Limitations of the study

Secondary data can be general and vague and may not really help the company withdecision making.

The information and data may not be accurate. The source of the data must always bechecked.

The data may be old and out of date. The sample used to generate the secondary data may be small. The company publishing the data may not be repute.

Recommendation

Equity has always been attractive investment options for all the investors in last fewdecades due to its over performing in comparison to other asset class, and in case of

ULIPS the same held true for equity as a class because of its long term view of

investments.

MetLife should start introspecting its performance in equity funds as they havesignificantly underperformed as compared to other companies.


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Met life has some very advanced and customer friendly passive portfolio managementoptions and they should introduce them in their future products also.

Debt performance has been exemplary for the funds of MetLife, so we can say that theyhave been able to manage their debt portfolio well and should keep on doing the same.


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CHAPTER 8

LESSON LEARNT


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LESSON LEARNT

During summer training I have gained experience of working in an organization are being

different rather than studying books as student. I had a great experience and good exposure with

the corporate world; I would like to share my experience.

As summer trainee I learned to be punctual i.e. to reaching the office at time, adopting myself to

rules and regulations of the organization, and being used to and know about the MNCs culture,

atmosphere etc.

Here are some of the experiences in which I came across during my summer training.

A) I have learnt to work in a team.B) How to take orders from my senior and explore the possibility to serve these

orders in an effective way.

C) How to deal with the customers by explaining the benefits of the insurance andgive advise i.e which is best product for them who suits their needs and

requirement..

D) Learnt how to take responsibilities and get them initiated in a better way.E) How to develop, plan and get ready for the work.F) Making customers focusing decisions.G) Researching and reporting on external opportunities.H) Based on overall company goals and direction.

Based on the above said experiences I can definitely say that it was the unique experience

working with PNB METLIFE.


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I can conclude that working in an organization teaches far beyond the classroom teaching, you

have to work hard within the defined limits which enhances your skills and personality. It had a

very good experience and I highly appreciate the effort of the university and recommend it for

students in future.


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CHAPTER 9

CONCLUSIONS


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Conclusion

Equity as an asset class has not performed in recent months, but as we all know thatequity investments demands time to be spent in market. Thus equity although has not

been able to outperform other asset class but taking a long term view of the market equity

has delivered always.

We can very clearly see in the analysis that debt has over performed and has been able togive some exemplary returns in the past few months, thus it proves that equity and debt

are inversely related.

We have also analyzed that there are three types of passive strategies in Met life. Thesestrategies are different from each other and beneficial for different mindset of investors.

All three are able to provide good returns to investor as per their risk appetite.

The analysis also shows that the SBI life is performing far better than Met life and Avivain equity and balanced funds category, where in debt fund MetLife as well as SBI has

performed well in comparison to their respective benchmarks; Avivas debt fund

performance has not been satisfactory for the investors.


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CHAPTER 10

BIBLIOGRAPHY


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Bibliography

https://www.google.co.in/#q=www.metlife.co.in https://www.google.co.in/#q=www.avivaindia.com https://www.google.co.in/#q=www.sbi.co.in https://www.google.co.in/#q=www.bajajallianz.com https://www.google.co.in/#q=www.iciciprulife.com https://www.google.co.in/#q=www.wikipedia.org https://www.google.co.in/#q=www.irda.gov.in https://www.google.co.in/#q=www.nseindia.com https://www.google.co.in/#q=www.bseindia.com https://www.google.co.in/#q=www.hdfclife.com https://www.google.co.in/#q=www.moneycontrol.com Cases of met life India Books of Insurance institute of India

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project nitish

nitish kaushikbbabi5272018

nitish kaushikenroll

firstgeneral insurance

company tocharge

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nonindian lives

century insurance bus