new a project report on tata aig
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CHAPTER- 1
INTRODUCTION
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INTRODUCTION TO TATA AIG LIFE
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company,
formed by Tata Sons and AIA Group Limited (AIA). Tata AIG Life combines Tatas
pre-eminent leadership position in India and AIAs presence as the largest, independent
listed pan-Asia life insurance group in the world spanning 15 markets in Asia Pacific.
Tata Sons holds a majority stake (74%) in the company and AIA holds 26% through an
AIA Group company. Tata AIG Life Insurance Company Limited was licensed to
operate in India on February 12, 2001 and started operations on April 1, 2001.
TATA INDIA LTD AIG LIFE INSURANCE CO. LTD
OBJECTIVES OF THE STUDY
To find the market share of various life insurers in India
To suggest additions to the current product portfolio
To recognize the popular insurance plans
To showcase the influence of advertising
To suggest ideal policy term and premium for insur
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Brief history of insurance sector:
The insurance sector in India has completed all the facets of competition from being
an open competitive market to being nationalized and then getting back to the form of a
liberalized market once again. The history of the insurance sector in India reveals that it
has witnessed complete dynamism for the past two centuries approximately.
With the establishment of the Oriental Life Insurance Company in Kolkata, the
business of Indian life insurance started in the year 1818.
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Important milestones in the Indian general insurance business:
1907: The Indian Mercantile Insurance Ltd. was set up which was the first
company of its type to transact all general insurance business.
1957: General Insurance Council, an arm of the Insurance Association of India,
framed a code of conduct for guaranteeing fair conduct and sound business
patterns.
1968: The Insurance Act improved for regulating investments and set minimal
solvency levels and the Tariff Advisory Committee was set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized
the general insurance business in India. It was with effect from 1st January
1973.
107 insurers integrated and grouped into four companies viz. the National
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd. and the United India Insurance Company Ltd. GIC
was incorporated as a company.
The history of general insurance business in India can be traced back to Triton
Insurance Company Ltd. (the first general insurance company) which was
formed in the year 1850 in Kolkata by the British
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.LIST OF INSURANCE COMPANIES IN INDIA
LIFE INSURERS Websites
Public Sector
Life Insurance Corporation of India www.licindia.com
Private Sector
Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.inBirla Sun-Life Insurance Company Limited www.birlasunlife.comHDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com
ICICI Prudential Life Insurance Co. Limited www.iciciprulife.comING Vysya Life Insurance Company Limited www.ingvysayalife.comMax New York Life Insurance Co. Limited www.maxnewyorklife.comMetLife Insurance Company Limited www.metlife.comOm Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.comSBI Life Insurance Company Limited www.sbilife.co.inTATA AIG Life Insurance Company Limited www.tata-aig.comAMP Sanmar Assurance Company Limited www.ampsanmar.comDabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com
GENERAL INSURERS
Public Sector
National Insurance Company Limited www.nationalinsuranceindia.comNew India Assurance Company Limited www.niacl.comOriental Insurance Company Limited www.orientalinsurance.nic.inUnited India Insurance Company Limited www.uiic.co.in
Private Sector
Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.inICICI Lombard General Insurance Co. Ltd. www.icicilombard.comIFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.inReliance General Insurance Co. Limited www.ril.comRoyal Sundaram Alliance Insurance Co. Ltd. www.royalsun.comTATA AIG General Insurance Co. Limited www.tata-aig.comCholamandalam General Insurance Co. Ltd. www.cholainsurance.comExport Credit Guarantee Corporation www.ecgcindia.comHDFC Chubb General Insurance Co. Ltd.
REINSURER
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General Insurance Corporation of India www.gicindia.com
INTRODUCTION OF TATA
Tata Group
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The Tata group comprises over 90 operating companies in seven business sectors:
communications and information technology, engineering, materials, services, energy,
consumer products and chemicals. The group has operations in more than 80 countries
across six continents, and its companies export products and services to 85 countries.
The total revenue of Tata companies, taken together, was $67.4 billion (around
Rs319,534 crore) in 2009-10, with 57 per cent of this coming from business outside
India. Tata companies employ around 395,000 people worldwide. The Tata name has
been respected in India for 140 years for its adherence to strong values and business
ethics. Every Tata company or enterprise operates independently. Each of these
companies has its own board of directors and shareholders, to whom it is answerable.
There are 28 publicly listed Tata enterprises and they have a combined market
capitalization of about $103.67 billion (as on November 11, 2010), and a shareholder
base of 3.4 million. The major Tata companies are Tata Steel, Tata Motors, Tata
Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages,
Indian Hotels and Tata Communications.
INTRODUCTION OF AIG
AIG history dates back to 1919, when Cornelius Vander Starrestablished an insurance
agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance
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to the Chinese, which he continued to do until AIG left China in early 1949as Mao
Zedong led the advance of the Communist People's Liberation Army on Shanghai. Starr
then moved the company headquarters to its current home in New York City. The
company went on to expand, often through subsidiaries, into other markets, including
other parts of Asia, Latin America, Europe, and the Middle East.
In 1962, Starr gave management of the company's lagging U.S. holdings to Maurice R.
"Hank" Greenberg, who shifted its focus from personal insurance to high-margin
corporate coverage. Greenberg focused on selling insurance through independent
brokers rather than agents to eliminate agent salaries. Using brokers, AIG could price
insurance according to its potential return even if it suffered decreased sales of certain
products for great lengths of time with very little extra expense. In 1968, Starr named
Greenberg his successor. The company went public in 1969.
Beginning in 2005, AIG became embroiled in a series of fraud investigations conducted
by the Securities and Exchange Commission, U.S. Justice Department, andNew York
State Attorney General's Office. Greenberg was ousted amid an accounting scandal in
February 2005; he is still fighting civil charges being pursued by New York state. The
New York Attorney General's investigation led to a $1.6 billion fine for AIG and
criminal charges for some of its executives. Greenberg was succeeded as CEO by
Martin J. Sullivan, who had begun his career at AIG as a clerk in its London office in
1970.
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On June 15, 2008, after disclosure of financial losses and subsequent to a falling stock
price, Sullivan resigned and was replaced by Robert B. Willumstad, Chairman of the
AIG Board of Directors since 2006. Willumstad was forced by the US government to
step down and was replaced by Edward M. Liddy on September 17, 2008.AIG's board
of directors named Robert Benmosche CEO on August 3, 2009 to replace Mr. Liddy,
who earlier in the year announced his retirement.
Business Holdings
Further information: Holdings of American International Group
In the United States, AIG is the largest underwriterof commercial and industrial
insurance, and AIG acquired American General Life Insurance in August 2001.
Auto insurance
AIG soldauto insurance policies through its subsidiary unit, AIG Direct The policies
they offered included insurance for private automobiles, motorcycles,
recreational vehicles and commercial vehicles.
AIG purchased the remaining 39% that it did not own of online auto insurance
specialist 21st Century Insurance in 2007 for $749 million. With the failure of the
parent company and the continuing recession in late 2008, AIG rebranded its insurance
unit to 21st Century Insurance.In April 2009 it was announced that AIG was selling the
21st Century Insurance subsidiary to Farmers Insurance Group for $1.9 billion.
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http://en.wikipedia.org/wiki/Robert_B._Willumstadhttp://en.wikipedia.org/wiki/Edward_M._Liddyhttp://en.wikipedia.org/wiki/Holdings_of_American_International_Grouphttp://en.wikipedia.org/wiki/Underwriterhttp://en.wikipedia.org/wiki/Auto_insurancehttp://en.wikipedia.org/wiki/Auto_insurancehttp://en.wikipedia.org/wiki/AIG_Directhttp://en.wikipedia.org/wiki/21st_Century_Insurancehttp://en.wikipedia.org/wiki/Farmers_Insurance_Grouphttp://en.wikipedia.org/wiki/Robert_B._Willumstadhttp://en.wikipedia.org/wiki/Edward_M._Liddyhttp://en.wikipedia.org/wiki/Holdings_of_American_International_Grouphttp://en.wikipedia.org/wiki/Underwriterhttp://en.wikipedia.org/wiki/Auto_insurancehttp://en.wikipedia.org/wiki/AIG_Directhttp://en.wikipedia.org/wiki/21st_Century_Insurancehttp://en.wikipedia.org/wiki/Farmers_Insurance_Group -
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CHAPTER-2
COMPANY
PROFILE
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TATA AIG LIFE INSURANCE COMPANY
TATA AIG Life Insurance Company Limited is a joint venture that brings together two
large forces TATA India Limited, a multi-business corporate, together with AIG Life
International, a global leader who is long experienced in that unique business called life
insurance.
Together TATA India Limited and AIG Life aims to become the most admired Life
Insurance Company in India. . This vision can be realized through their unique set of
values.
KNOWLEDGE :
Knowledge leads to expertise; and their expertise is in helping people protect
themselves. Perfectly combining global expertise with local knowledge, they
are Indias life insurance specialist. TATA AIG Life believes that for
Knowledge to be of value it must be focused, current, tested and shared.
CARING :
TATA AIG life is redefining the life insurance paradigm by Focusing on
customer first. The service process responsive, Personalized, humane and
empathetic. Every individual who represents the company is for them are their
brand champion.
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UNITY: We must work cohesively with our colleagues across thegroup and with our
customers and partners around the world, building strong relationship based on
tolerance, understanding and mutual cooperation.
RESPONSIBILITY: We must continue to be responsible, sensitive tothe countries,
communities and environments in which we work, always ensuring that what comes
from people goes back to the people many times over.
VISION:
To be the most trusted life insurance company that values customers financial well-
being, consistently delivering best-in-class solutions and respected by all.
MISSION:
Enhance our customers well- being.
HONESTY:
Honesty is the heart of life insurance business. It is all about trust. Transparency,
integrity and dependability forms the corner stones of TATA AIG life experience. The
company ensures that every one who represents the brands carries a promise we care in
a word as well as deed.
QUALITY:
Excellence at TATA AIG Life implies the ability to perform a consistently high level.
Focused on the value of continuous improvement in people, processes and the
organization, the company strives higher standard of quality in every aspect of its
business.
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INTEGRITY :
We must conduct our business fairly, with honesty and transparency. Everything we do
must stand the test of public scrutiny.
UNDERSTANDING:
We must be caring, show respect, compassionand humanity for our colleagues and
customers around theworld, and always work for the benefit of the communities we
serve.
EXCELLENCE:
We must constantly strive to achieve the highestpossible standards in our day to day
work and in the quality of the goods and services we provide.
MARKETING INFORMATION:
Tata AIG began its campaign with corporate slogan of With You Always. Tata AIG
life signed up with popular TV commentator Harsha Bhogle and Bollywood icon
Naseerudin Shah to be its brand ambassadors. In a changing environment, slogan was
shifted to A new look at life which meant that Tata AIG would be proactive and
anticipate the requirements of customers. In 2009, in an attempt to stand out, Tata AIG
created two animated characters- Sukhi & Dukhi to communicate their products. Dukhi
voices the concerns in the customers mind while Sukhi answers those issues
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DISTINCTIONS:
.Tata AIG Life Insurance Company (Tata AIG Life) has been awarded the LOMA
(Life Office Management Association) award for outstanding professional life
insurance education of its employees. ( 2004)
The globally renowned Life Insurance Marketing and Research Association
(LIMRA) awarded the prestigious International Quality Agent (IQA) award to 61
Tata AIG Life Insurance Company Ltd. (Tata AIG Life) advisors. Tata AIG Life
Insurance is the only company in India whose advisors have been awarded this
unique distinction.
CLAIMS:
As an insurance company it is our priority and assurance to our policy holder's to process
their claims speedily and in best possible manner while keeping their well-being in mind
always.
To service you better in times of emergency, please inform us immediately upon
occurrence of the incident or loss.
In the unfortunate event of a critical illness, hospitalisation, disability or death, call our
Helpline No's 1-800-11-9966 (toll free BSNL & MTNL only) or at 1-860-266-9966 (local
charges apply) from 9am-9pm
TYPES OF PLANS
Risk Plans
TATA AIG Life Raksha
TATA AIG Life LifePlus
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THE ORGANIZATION STRUCTURE
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Home office
urgaon
West Zone North ZoneEast Zone
South Zone
ZVPZVP ZVPZVP
MPZTM
CSM & TEAM
PARTNER TR. MGCSM AGENCY
COORDINATOR
TEAMASSOCIATE
PARTNER
SALES
MANAGER
ASSOCIATE SALESMANAGER
ZM-Ops
AGENTS AND
ADVISOR
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INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY( IRDA)
Insurance Regulatory & Development Authority is regulatory and development
authority under Government of India in order to protect the interests of the
policyholders and to regulate, promote and ensure orderly growth of the insurance
industry. It is basically a ten members' team comprising of a Chairman, five full time
members and four part-time members, all appointed by Government of India. Thisorganization came into being in 1999 after the bill of IRDA was passed in the Indian
parliament.
POWERS AND FUNCTIONS OF IRDA
It issues the applicants in insurance arena, a certificate of registration as well as
renewal, modification, withdrawal, suspension or cancellation of such
registrations.
It protects the interests of the policy holders in any insurance company in the
matters related to the assignment of policy, nomination by policy holders,
insurable interest, and resolution of insurance claim, submission value of policy
and other terms and proposals in the contract.
It also specifies obligatory credentials, code of conduct and practical
instructions for mediator as well as the insurance company. Apart from this, it
also defines the code of conduct for the surveyors and loss assessors involved
with the insurance business.
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One of the major functions of IRDA includes endorsing competence in the
insurance business. Apart from this, upholding and regulating professional
organizations in insurance and re-insurance business is also a major duty of
IRDA.
IRDA is also entitled to for asking information, undertaking inspection and
investigating the audit of the insurers, mediators, insurance intermediaries and
other organizations related to the insurance sector.
It is also concerned with the regulation of the rates, profits, provisions and
conditions that may be offered by insurers in respect of general insurance
business if it is not controlled or regulated by the Tariff Advisory Committee.
It is also entitled to supervise the functioning of the Tariff Advisory Committee.
IRDA specifies the terms and pattern in which books of accounts are to be
maintained and statement of accounts shall be provided by insurers and other
insurance mediators.
It also regulates investment of funds by insurance companies as well as the
maintenance of margin of solvency.
It is also empowered to be involved in the arbitration of disagreements between
insurers and intermediaries or insurance intermediaries.
It is meant to specify the proportion of premium income of the insurer to
finance policies.
IRDA also specifies the share of life insurance business and general insurance
business to be accepted by the insurer in the rural and insurance sector.
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CHAPTER-3
LITERATURE
REVIEW
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LITERATURE REVIEW
An article published in IRDA Journal, April 2008 UNIT LINKED BUSINESS
PRODUCT DEVELOPMENT gave knowledge that there must be clear
distinction between traditional products and market linked products.
An article published by OUTLOOK MONEY WHY INSURANCE POLICIES
DONT MAKE GOOD INVESTMENTS says that if one drill through the
numbers is a bare truth that insurance policies dont make good investments.
An article published in OUTLOOK MONEY UNIT LINKED PLANS ARE
THE FUTURE notifies the importance of acceptance of ULIPS among the
masses.
An interview published in INDIA INFOLINE INTERVIEW OF Mr. NEERAJ
BASUR V.P. CORPORATE FINANCE- TATA INDIA LTD visualizes how
the servicing, turnaround time and other customer service parameters
differentiate TATA AIG Life with others.
An article on LIFE INSURANCE AS AN INVESTMENT says that it has
been researched that investment in life insurance is a profitable investment as
compared to other form of investments.
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Tata AIG Life Insurance Company ties up with Chennai Central Co-operative
Bank feb 2010
VOICE survey reveals Tata AIG Life Insurance as a clear winner in the life insurance
category may 10 \06
Tata AIG Life Insurance Company introduces Series II of funds under InvestAssure
Apex Supreme july 1 \11
Tata AIG Life Insurance Company launches Gyan Kosh june 15\2011
Tata AIG Life Insurance launches two limited-pay unit-linked solutions InvestAssure
Gold Supreme and InvestAssure Maximizer may 31 \2011
The globally renowned Life Insurance Marketing and Research Association (LIMRA)
awarded the prestigious International Quality Agent (IQA) award to 61 Tata
AIG Life Insurance Company Ltd. (Tata AIG Life) advisors. Tata AIG Life
Insurance is the only company in India whose advisors have been awarded this
unique distinction.Aksh trivedi (mgr corporate pensions at tata aig life) Won the highest annual
recognition Hercules award of the Tata Aig life Insurance Co India for 2010-
2011.
The knowledge about the marketing principles is gained from the book
Principles of Marketing written by Philip Kotler.
Syndicate Bank ties up with Tata AIG Life Insurance Company to offer group
insurance solution to its housing loan customers.
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CHAPTER-4
RESEARCH
METHODOLOGY
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RESEARCH METHODOLOGY
RESEARCH: Research is collecting the facts or data analyzing the facts and reaching
certain conclusions either in the form of solutions towards the concerned
problem or in generalisations for some theoritical formulation.
TYPES OF RESEARCH
There are two types of research being used in this they are as follows:
1. Descriptive Research: Descriptive Research includes surveys and
fact-findings enquiries of different kinds .The major purpose of
descriptive research is description of the state of affairs aas it exists
at present. So this research was applied to conduct surveys ad to
find out facts.
2. Analytical Research: In Analytical Research the facts or
information already available are analyzed to make a critical
evaluation of the material.so this research was used to compare the
plans on the basis of information available.
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OBJECTIVES OF THE STUDY
To find the market share of various life insurers in India
To suggest additions to the current product portfolio
To recognize the popular insurance plans
To showcase the influence of advertising
To suggest ideal policy term and premium for insurance
To showcase the consumers willingness to spend on life insurance
To showcase the factors that motivate purchase of insurance policies
To understand the type of company preferred for investment
To understand the awareness level of consumers about unit linked insurance
plans
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RESEARCH DESIGN
INTRODUCTION
A Research Design is the framework or plan for a study which is used as a guide in
collecting and analyzing the data collected. It is the blue print that is followed in
completing the study. The basic objective of research cannot be attained without a
proper research design. It specifies the methods and procedures for acquiring the
information needed to conduct the research effectively. It is the overall operational
pattern of the project that stipulates what information needs to be collected, from which
sources and by what methods.
SAMPLING METHOD
Sampling refers to the method of selecting a sample from a given universe with a view
to draw conclusions about that universe. A sample is a representative of the universe
selected for study.
Convenience sampling is used in exploratory research where the researcher is
interested in getting an inexpensive approximation of the truth. As the name implies,
the sample is selected because they are convenient. This non probability method is
often used during preliminary research efforts to get a gross estimate of the results,
without incurring the cost or time required to select a random sample.
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SAMPLE SIZE
The sample size for the survey conducted was 100 respondents.
SAMPLING TECHNIQUE
Convenience sampling technique was used in the survey conducted.
SAMPLING TOOLS
Tables were used for the analysis of the collected data. The data is also neatly presented
with the help of statistical tools such as graphs and pie charts. Percentages and averages
have also been used to represent data clearly and effectively.
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METHODS OF DATA COLLECTION
There are two types of data used. They are primary and secondary data. Primary data is
defined as data that is collected from original sources for a specific purpose. Secondary
data is data collected from indirect sources.
PRIMARY SOURCES
These include the survey or questionnaire method, telephonic interview as well as the
personal interview methods of data collection. This data was majorly used for the
analysis of surveyed questions.
SECONDARY SOURCES
These include books, the internet, company brochures, product brochures, the company
website, competitors websites etc, newspaper articles etc. This data was used majorly
for the purpose of comparative analysis.
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CHAPTER-5
DATA ANALYSIS
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SWOT ANALYSIS
STRENGTHS:
The ethics and values have a major role to play in the management.
Motivation is also given to agents for attending the training
Co-operative sales manager to whom the agents can consult anytime.
Motivation of agent advisor by distributing gifts and giving awards and
recognitions
Work and culture in TATA AIG is very friendly.
First Indian Life Insurer to be given ISO 9001:2000 certification.
New York Life has been No. 1 in MDRT for 50 consecutive years.
TATA AIG provides world class training for agent advisor.
WEAKNESS:
Training period consists of 50 hours which is too long and thus difficult for
some people to attend regularly .The Company has no alternative as it is ruled
framed by IRDA.
TATA AIG is not having any rural presence.
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OPPORTUNITIES:
Huge population over 1 billion
Insurance penetration significantly below international standards
Limited number of players given the size of the market, and in comparison to
other Asia Pacific markets
Pension reform
Insurance regulator is influential and open-minded, permitting all types of
products
Regulations are changing in a favourable manner (e.g. surplus distribution,
bancassurance)
Well developed banking system enabling bancassurance
An acceptance of unit-linked products on the back of a well developed mutual
fund market.
Health insurance is relatively limited. There has been a lack of interest in this
area and the IRDA is keen to stimulate this area.
THREATS:
LIC networking
Nascent industry
Tax relief is long term a big question mark.
Equity boom luring investors to invest in stock market.
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Agents rebating their commission.
ANALYSIS OF INSURANCE PLANS
COMPARISON -UNIT LINKED INSURANCE PLAN
Unit linked insurance plans (ULIPs) are probably the hottest selling product for most
life insurance companies today. However, when it comes to evaluating ULIPs from
across life insurance companies, individuals find the task arduous and challenging. The
table below provides information on ULIPs from three leading life insurance
companies.
LIFE
MAKER
PREMIUM
(TALIC)
UNIT LINKED
ENDOWMEN
T PLUS
(HDFC)
LIFE TIME
SUPER
(ICICI)
ENTRY AGE 0-65 18-65 yrs without
riders
18-55 yrs with
riders
0-65
MAX. AGE AT
MATURITY
75 yrs 65-75 yrs
depending on riders
chosen
75 yrs
TERM 75 yrs 10 - 30 yrs 10-75 yrs
PPT Regular, Limited Regular Regular
PREMIUM MODES Yearly, half
yearly, quarterly,
Yearly, half yearly,
quarterly, monthly
Yearly, half
yearly, monthly
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monthlyMINIMUM
PREMIUM
Rs. 20,000 p.a. Rs. 10,000 p.a. Rs. 18,000 p.a.
RIDERS PAB, DD ADB, CI ADB, CI, WoPPERSISTENCY
UNITS
0.75% of avg.
fund value of
previous 36
month starting
9th yr & every 3rd
year thereafter
0.1% of loyalty
units every yr
4%of annual
premium
starting from
4th yr & every
yr thereafter
FREE SWITCHES 6 24 4
PARTIAL
WITHDRAWALS
Allowed after 3
yrs. Minimum
amt. --
Rs.10,000.
3 free
Allowed after 3yrs.
Minimum amt. --
Rs. 10,000.
6 free
Allowed after 3
yrs. Minimum
amt. -- Rs.
3,000
ALLOCATION
CHARGE
Yr 1 25%
Yr 2 10%
Yr 3 5%
Yr 4 2%
Yr 5 2%
Yr 6-20 2%
60%
1%
1%
1%
1%
1%
20%
7.5%
4%
4%
4%
4%ADMINISTRATIO
N CHARGES
Yr 1 12%
Yr 2 12%
Rs. 240
Rs. 240
Nil
Nil
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Yr3 12%
Yr4 5%
Yr5 5%
Yr 6-20 5%
Rs. 240
Rs. 240
Rs. 240
Rs. 240
Nil
Nil
Nil
NilSURRENDER
CHARGES
After 3 yrs --
25% of fund
value
After 4 yrs -- nil
After 5 yrs -- nil
Subsequent yrs
nil
Nil
Nil
Nil
Nil
2%
1%
Nil
Nil
S
FINDINGS FROM ABOVE COMPARISON
ICICI From the above ULIPS comparison it can be analyzed that ICICIs strengthlies in its TERM which is longer as compared to TALIC. It also charges premium
which is lower than TALIC by Rs.2000. The main strength of ICICI is its nil
administration charges. The allocation charges are also lower than TALIC in 1st yr by 5
percent points.
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The weakness of ICICI is that it charges surrender charges even in the 4 th
year whereas in case of TALIC in 4th year it is nil. It also do not have quarterly
premium mode.
HDFC From the above ULIPS comparison it can be analyzed that HDFCs strengthlies in its surrender charges which are nil throughout. The administration charges are
also low and fixed. It also charges premium which is lower than TALIC by Rs.10000. It
also allows 24 free switches which is highest in above comparison.
The major weakness of HDFC is that its allocation of funds is very low in
the first year. The age at entry is also very high.
COMPARISON-CHILDRENS PLAN
YOUNG STAR
(HDFC)
SMART KID
(ICICI)
SMART STEP
(TATA AIG)
Min. age at entry 0 yrs child and 20
yrs parent.
0 yrs child and 20
yrs parent.
91 days child and
21 yrs parent.
Max. age at entry 15 yrs child and 60
yrs parent.
15 yrs child and 60
yrs parent.
15 yrs child and 50
yrs parent.
Max. age at 18 yrs min. 25 yrs 18 yrs min. 25 yrs 16 yrs min. 25 yrs
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maturity (child) max. max. max.
Max. age at
maturity
75 yrs. 75 yrs. 60 yrs.
Minimum
premium
RP- 10,000 RP- 10,000
SP- 25,000
RP- 20,000
SP- 50,000
Term 10 yrs min. and 25
yrs max.
10 yrs min. and 25
yrs max.
10 yrs min. and 25
yrs max.
Maturity Benefit FV/PV/AV FV/PV/AV FV/PV/AV
Death Benefit SA + Future
Premiums waived
off + Future
Premiums paid by
the company + FV
SA + Future
Premiums waived
off + Future
Premiums paid by
the company + FV
SA + Future
Premiums waived
off + Future
Premiums paid by
the company + FV
+ [5% FIB + DD
(50% of SA or 10
lakh whichever is
lower)]
Top up Allowed Not available Allowed min 5000
Partial
Withdrawals
Allowed after 3 yrs Allowed after 5 yrs Allowed after 5 yrs
Premium
Allocation Charge
1st 2 yrs 30%
3rd yr onwards -2%
1st yr - 20%
2nd to 5th yr 5%
6th yr onwards 2%
1st yr 30%
2nd yr onwards 2%
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COMPARISON-RETIREMENT PLANS
SMART INVEST
PENSION
(TATA AIG) LIFE
UNIT LINKED
PENSION
(HDFC)
LIFE TIME SUPER
PENSION
(ICICI)Entry age 18-60 yrs 18-65 yrs 18-65 yrs
Vesting age 50-70 yrs 50-75 yrs 45-75 yrsTerm 10-52 yrs 10-40 yrs 10-57 yrs
Minimum
premium
10,000 10,000 10,000
Premium options Level/increasing Level LevelInvestment
options
5 funds/dynamic
allocation option where
asset allocation is
determined by years to
vesting resulting in
customer having no
hassels of
switching/redirections
6 funds 4 funds
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Free switches 6 24 4Administration
charges
Rs. 50 p.m. with 5%
increase every year
Rs. 20 p.m. Rs. 40 p.m. and
additional charges of
Rs. 40 p.m. if premium
not paid in 1st 5 yrsFund
Management
Charges
Growth super- 1.35%
Growth- 1.25%
Balanced- 1.1%
Secured- 0.9%
Conservative- 0.9%
0.8% of fund value
across all funds
Maximiser II- 1.5%
Balancer II- 1%
Protector II- 0.75%
Preserver- 0.75%
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COMPARISON OF
INDIVIDUAL UNIT LINKED INVESTMENT PLAN
SMART ASSURE
(TATA AIG)
LIFE TIME
GOLD
(ICICI)
UNIT LINKED
ENDOWMENT
PLUS II
(HDFC)
Entry age 91 days 75yrs 0-65 yrs 18-65 yrsMinimum ATP Rs. 20,000 Rs. 20,000 Rs. 12000
Term/PPT Term - regular
10-30 yrs
10-75 yrs 10-30 yrs
Maturity age 85 yrs 75 yrs 65-75 depending
upon riders chosen
Switch 6 free 4 free 24 freeRedirection 3 free Unlimited 12 free
Partial withdrawal 6 free Unlimited 6 freeDeath benefit Higher of fund
value/S.A.
Higher of fund
value/S.A.
Higher of fund
value/S.A.Maturity benefit Fund value Fund value Fund value
Loyalty units 1%-3% of fund
value depending on
policy term
4% of annual
premium every 4
yrs at starting end
of fourth yr
0.1% of units every
yr
Administration
charges
Rs. 50 p.m.
increasing at 5%
p.a.
N.A. Rs. 60 p.m.
Fund management
charge
Dynamic
opportunity 1.6%
Flexi growth, RICH
2.25%
1.25% for all funds
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Growth super
1.35%
ANALYSIS OF SURVEY
AGE GROUP OF SURVEYED RESPONDENTS
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Analysis:
From the above chart we could find that 28 % of the respondents fall in the category of
20-30 age group as well as 40-50 age group.21% respondents fall in age group of 30-40
and 17% fall in the category of 50-60 age group and rest in the age group of 60-70.
Therefore people falling between age group 20-30 can be induced to buy insurance plan
by making them aware of insurance as a means of investment with high returns.
Contrary to popular belief the younger you are the more insurance you need as your
loss will mean a great financial loss to your family, spouse and children (in case the
individual is married) who are financially dependent on you.
People falling in the age group of 40-50 can be induced to buy insurance by spreading
awareness of tax benefit under sec 80C on premiums and under sec 10(10D) on
maturity proceeds of the policy.
GENDER CLASSIFICATION OF SURVEYED RESPONDENTS
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Analysis
The above graph shows that 77% of the respondent are male and rest 23% are female.
The insurance policy is being taken by 77% male and only 23% female take insurance
policy.
OCCUPATION OF RESPONDENTS
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Analysis:
From the chart above it can clearly be seen that 44% of the respondents are service
man, 38% are into business and 9% are housewives, 7% are students and rest 2% are
others .Therefore the target market would be working individuals or service man in the
age group of 20 30 as well as 40-50 years having surplus income, interested in good
returns on their investment and saving income tax.
DATA ANALYSIS
QUESTION 1 :
Whom do you keep in mind while taking an insurance policy?
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Analysis:
The above chart shows that 40% take insurance policy for themselves, 26% for their
children, 21% for spouse and 13% for other in the family.
40% of respondent are service people who are aware of the benefit of insurance. They
know life is uncertain. So they wanted to secure their family from uncertainty and 26%
of respondents take policies for children to secure their future needs like educational
and marriage expenses. 25% of people take life cover for their wife; if she is a
housewife husband would get a tax rebate as she is not a tax assesse.
QUESTION 2 :
How do you rate Life Insurance as a means of investment Vis-a Vis other forms
of investment?
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Analysis:
The above graph reveals that 55% of the masses rate the investment in life insurance as
a good means as it provide lot of benefit to the customer.21% rate it as an excellent
source, 17% rate it as fair, 7% consider that insurance is a poor investment source as
compared to other form of investment.
Respondents have rated insurance as a good means of investment because on one part it
provides a back up in case some misshappening occurs and on the other side there no
risk involved. People also get tax rebate when they put their money in life insurance
business.
QUESTION 3 :
Where do you want to invest your money?
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Analysis:
It is clear from the above chart that 55% of the respondents want to invest in
government sector and 45% want to invest in private sector. 55% want to invest in govt.
sector because of past experience and trust created by govt. companies. But private
companies are behind by just 10% points which means that the orientation of people is
shifting towards the private players in the market
Private Company advertises regularly and creates brand value for its products and
services and most people believe that they get effective return when invested in private
insurance company. Moreover the customer service provided by the private companies
is far better as compared to the Government Company.
QUESTION 4 :
Out of the following you have an insurance policy of which insurance company?
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Analysis:
LIC is holding the biggest market share of 54% according to the survey. TATA AIG
Life holds the second place having 17% market share followed by ICICI having 13%
market share. HDFC, BIRLA and OTHERS have less percentage in the market .LIC
has the highest coverage market as compared to other private players.
QUESTION 5 :
How important are the following factors while selecting an insurance policy?
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Analysis :
From the above graph it can be analyzed that only 15% of the respondents consider
additional benefit to very important; the reason behind this is that additional benefits are
though important but they are not the factors which people keep in mind while selecting
insurance policies. The policies offered by different companies have different features.
The benefits may include riders without paying any additional premium.
It is clear that 71% of people consider security of money as a very important factor,
24% of respondents say it to be important factor, whereas 5% say it to be moderately
important factor. Respondents felt that in whichever plan they invest their money
should be secure enough. That was a very important criterion for them. There were
people who belonged to high income class for whom security was not that important
criterion. Their motive behind selecting the insurance policy was quiet different, as they
are looking for the returns that are involved with the policy.
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Further from the graph above it can be analyzed that 57% of the people say that
goodwill is very important factor to invest company because it is the reputation of the
company which creates the influence on people to invest their money, 38% people
consider it to be important factor, 3% say it to be moderately important factor, 2% tell
that goodwill is not as important factor.
Lastly the above graph reveals that 61% of the people consider return on investment as
the most important factor while selecting an insurance policy and just 9% consider it to
be moderately important and 29% say it is important only 1% consider it to be not
important who are amongst those who want low but assured returns. This is the most
alluring factor that induces a person to make their investment in this sector.
QUESTION 6 :
Out of the following which plan suits to your need?
(A) ULIP PLAN
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Analysis:
From the above graph we can conclude that 16% of the respondents are in favour of
taking the whole life policy and hence 31% respondents placed WHOLE LIFE PLAN at
second position. Only for 2% of the respondents Whole Life policy does not match to
their needs. Respondents were in favour of whole life policy because in whole life plans
all the 8 riders are available which is not available in any other plan and this policy can
be surrendered at any time. It is entirely different from the Term plan because in term
plan the sum assured can be recovered only on the death of an individual but in Wholelife plan the sum assured along with bonus can be recovered after the age of 100 years
but in case of death of the life insured (being less than the age of 10 years) all the
premiums along with the interest that has been paid will be refunded.
(C) ENDOWMENT PLAN
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Analysis:
The above graph clearly shows that this plan is not that famous among the respondents.
Only one rider are available on this plan and there is no facility of term plan. And hence
the respondents have placed endowment plan at third position with 38% favouring it.
(D) TERM PLAN
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Analysis
Respondents were not interested in Term plans as the benefit was available only in case
of the death of the individual. Bonus is also not payable in this plan and no loan could
be taken on this plan. And hence the analysis shows that term plan is on fourth position
with 61% people favouring it.
(E) OTHER PLANS
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Analysis
The above graph reveals that 91% of the people are not satisfied with the current plans
they wanted that any other plan should be introduced in the market. Apart from the
above four plans there are other plans and policies that attracted the respondents. This
included Child Money Back Policy, Life Maker Investment plans and others. From time
to time the company comes out with polices with modifications that gained the attention
of people.
QUESTION 7 :
What motivates you to purchase an insurance plan?
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Analysis:
The above graph reveals that 46% of the people consider income security as an
important factor of motivating the person to purchase insurance policy. Investing
money in shares and equity market is quiet risky. Many people generally avoid
investing in this market. They are in look for much better options. In this market neither
the amount invested is saved nor is any kind of return assured. Life insurance provides
an edge over the equity market. Respondents had considered the income security as a
very important factor.
Today old age benefit is what people want to get when they dont have their job. 44%
of the people who considered it to be very important were mostly among the age group
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of 40-50. 35% consider it important and 15% moderately important and 6% of the
respondents feel that it is not an important factor.
People like to invest if they get tax benefit from any investment , 45% of respondents
consider tax benefit to be important ,37% consider it to be very important factor, 12%
to be moderately important , 6% consider it be not important. Amongst 45% of the
people who considered that tax benefit is perhaps the important criteria were young
people who were interested in returns rather than rebates. 37% of the people in our
survey who fall in very important category belonged to the service class for whom tax
saving seems to be very important whereas on the other hand for housewives this was
not that important.
The above graph reveals that 49% of respondents consider high return to be very
important, 37% say it to be important and 14% consider it is moderately important.
There was none amongst the respondents who considered it to be not important. Return
from a particular policy is an important factor which the respondents keep in mind
while investing in insurance policy. Females on the other hand considered return on
investment as moderately important factor for the investment purpose.
Lastly savings is considered to be highest motivating factor for which respondents take
up the insurance plan as 55% people considered it to be very important.38% consider it
to be important, 6% consider it to be moderately important and hardly 1% out of 100
consider it to be not at all important.
QUESTION 8 :
What is the approximate premium paid by you annually?
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Analysis:
It is clear from the above analysis that 41% of the people pay premium between 5000-
10000, 32% people pay between 10000-15000, 15% people pay between 15000-25000
and rest pay between .The sample which we had taken consisted of people belonging to
lower-middle and middle class families. They could pay premium of 5000-10000 pre
year. Respondents belonging to middle class could afford a premium of Rs.10000-
Rs.15000 per year.
QUESTION 9 :
Which according is an ideal policy term?
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(Number of years youll be willing to pay premiums)
Analysis:
According to the survey conducted 43% of the people wanted to pay premium between
6 years 9 years because they dont want to carry the policy for long they would like to
further invest the money in some other investment , 33% between 10years-15years,
10% of the people would like to pay premium between 16years- 20 years. People now
take life insurance policies at a very early age and the amount of premium gets blocked
at that very age that enables them to enjoy the benefits of insurance for a longer
duration of time.
QUESTION 10 :
Typically what kind of return would you look at?
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(Higher returns involves greater risk)
Analysis:
From the above chart we can analyse that 41% of the respondents want to have returns
between 11%-15%. This is because the risk appetite of these people is low and hence
they do not want to involve in risky ventures Returns depend upon the amount of
investment. Greater is the amount invested in a policy greater will be the amount of
return because it is said that higher return involves greater risk and they cannot bear
high risk and are in the favour of security of their money. Next 17% want to have
returns between 16%-20%. Only 6% of the people expect returns of more than 40% as
their risk appetite is very high and they are risk seekers.QUESTION 11 :
QUESTION 11:
Which private cos advertisement is more informative?
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Analysis:
The above chart states that the advertisement of TATA AIG LIFE is more informative
as compared to other market players. The reason for this is that this survey was
conducted when IPL was at peak and its major share was sponsored by TAIGL.
Another reason for TATA AIG Life being most informative is that it has taken Rahul
Dravid as brand ambassador which truly depicts the personality of TATA AIG Life.
33% of the people knew mostly of ICICI product and plan as it give the knowledge of
the new product in the market and the advertisement is comprehensive in nature which
emotionally effect people.14% opted for HDFC. And the rest 8% opted either for
AVIVA or BIRLA for giving the most informative advertisement.
QUESTION 12 :
Any suggestion to improve services offered by various insurers?
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This was an open ended question in which I received various recommendations and
advices from the masses regarding ways in which insurers can improve their services.
The most common advice is advertisement and publicity. The people want that
insurance companies shall spread awareness regarding the actual benefits of taking up
an insurance policy. These days it has become a mere tool to get rebate on taxes on year
end. Other benefits of insurance like old age benefit, investment benefit, risk cover etc
should also be brought to notice of people. Other suggestion included
More Ex-gratia payments if claims are totally denied.
Brochures in hindi shall be introduced.
Products for rural people shall be launched by private companies.
Allocation charges shall be reduced.
Claim settlement should be enhanced.
Try to relate policies with peoples emotions.
Returns should be timely informed.
Avoid unethical selling.
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CHAPTER-6
FINDINGS
AND
CONCLUSION
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FINDINGS
There was a time when people found Government life insurance companies as a
better option to invest their money in. But now times have changed. People are
now shifting their focus towards private players as well.
The main purpose of insurance is to cover the financial or economic loss that
occurs to the family in case of the uncertain death of the policy holder. But
nowadays this trend is changing. Along with protection (life cover), a savings
element is being added to insurance.
TATA AIG Life is facing a tough competition from other private players in the
market. So the company should bring out more number of plans at a reasonable
premium.
People apart from saving their money also expect a fair amount of return on
that. So the ULIP plan is gaining popularity day by day and is the maximum
revenue generating product of an insurance company.
People now prefer to take insurance policies at a younger age. The amount of
premium gets blocked at this age and they can reap the benefits of insurance for
a longer duration of time.
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LIMITATIONS
The allotted time period of 8 weeks for the study was relatively insufficient,
keeping in mind the long duration it can take at times, to close a particular
corporate deal.
The study might not produce absolutely accurate results as it was based on a
sample taken from the population.
It was difficult getting time and access to senior level Finance/HR managers
(who had to be talked to, to get required information) due to their busy
schedules and prior commitments.
A few of the managers refrained from giving the required information as he
considered being from their confidential domains.
Mode of database collection was limited only to cold calling the corporate.
Not all the plans available in the market have been covered. It might be
possible that the best selling plan from a particular company might not have
been included in the defined category
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RECOMMENDATIONS
Life Insurance business works on the trust of individuals. For a company like
AIG Life its really difficult to get into the minds of Indian customers. It has to
adopt effective marketing campaigns so that people comes to know about this
brand in the market.
The basic purpose for which life insurance industry was set up has been lost.
People just consider it as a tax saving instrument. So people should be made
aware that life insurance is an instrument that helps an individual in his difficult
times
TALIC should try to open more and more number of branches .
In a country like India it is essentially required that the company enters into
joint ventures with some rural based chains. This tie up will strengthen
TALICSs rural presence.
The company must try to bring out products according to the need and
affordability in the rural areas. The size of rural market is really huge and there
is an increasing propensity to save among them. So the potential that exists in
the rural market is really enormous.
The agents should be given sufficient incentives so that they feel motivated to
do their work.
The agent acts as a link between the company and the insurers. So the selection
procedure for agents should be made tough so that only capable people fit into
the criteria.
The documentation part of taking a policy should be made simple and flexible.
This will enable the people to take more and more number of policies.
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CONCLUSION
Insurance industry in India is witnessing a rapid growth. Players are adopting different
strategies for the changing environment and growing competition. The scope for
potential growth in life insurance market is contributed by an underinsured market,
changing demographic profile, low level of insurance awareness, growth of the
economy and changing socio-cultural behavior of the people.
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.. The basic purpose for which life insurance industry was set up has been lost.
People just consider it as a tax saving instrument. So people should be made aware that
life insurance is an instrument that helps an individual in his difficult times.
Today the acceptance of unit-linked products on the back of a well developed mutual
fund market is the greatest strength of an insurance company to prevail in the insurance
sector.
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QUESTIONNAIRE
Your fair views are required in order to perform an unbiased analysis with the
details provided by the questionnaires filled by you. All the information provided
by you will be kept confidential.
PERSONAL DETAILS:
NAME:
AGE: ....
GENDER: .
OCCUPATION:
SERVICE BUSINESS STUDENT
HOUSEWIFE OTHERS
1. WHOM DO YOU KEEP IN MIND WHILE TAKING AN INSURANCE
POLICY?
WIFE CHILDREN
YOURSELF OTHERS
2. HOW DO YOU RATE LIFE INSURANCE AS A MEANS OF INVESTMENT
VIS--VIS OTHER FORMS OF INVESTMENT?
EXCELLENT GOOD FAIR POOR
3. WHERE DO YOU WANT TO INVEST YOUR MONEY?
GOVT. COMPANY PVT. COMPANY
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4. OUT OF THE FOLLOWING YOU HAVE AN INSURANCE POLICY OF.
LIC AVIVA TATA AIG
HDFC BIRLA SUNLIFE OTHERS
5. OUT OF THE FOLLOWING WHICH PLAN BEST SUITS TO YOUR NEED?
RANK IN ORDER OF PREFERENCE.
ULIP PLANS ------- WHOLE LIFE PLAN -------
ENDOWMENT PLAN ------- TERM PLAN -------
ANY OTHER ---------
6. WHAT IS THE APPROXIMATE PREMIUM PAID BY YOU ANNUALLY?
Rs. 5000 - RS 10000 Rs. 10000 - RS 15000
Rs. 15000 - RS 25000 Rs. 25000 - RS 50000
7. WHICH ACCORDING TO YOU IS AN IDEAL POLICY TERM?
(NO. OF YEARS YOU WILL BE WILLING TO PAY PREMIUM)
6 YEARS 9 YEARS 10 YEARS -15 YEARS
16 YEARS -20 YEARS 21 YEARS -25 YEARS
26 YEARS -30 YEARS MORE THAN 30 YEARS
8. TYPICALLY WHAT KIND OF RETURN WOULD YOU LOOK AT
5% 10% 11% 15% 16% 20%
21% 25% 26% 30% 31% 40%
41% 50% MORE THAN 50%
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9. WHAT MOTIVATES YOU TO PURCHASE INSURANCE PLAN?
10. HOW IMPORTANT ARE THE FOLLOWING FACTORS WHILE
SELECTING AN INSURANCE POLICY?
11. ANY SUGGESTION TO IMPROVE SERVICES OFFERED BY VARIOUS
INSURERS.
..
**********THANK YOU*********
BIBLIOGRAPHY
Books such as:
~ 68 ~
FEATURES VERY
IMPORTANT
IMPORTANT MODERATELY
IMPORTANT
NOT
IMPORTANT
Saving
High return
Tax benefit
Old age benefit
Income security
FEATURES VERY
IMPORTANT
IMPORTANT MODERATELY
IMPORTANT
NOT
IMPORTANT
Returns on investment
Goodwill
SecurityAdditional benefit
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Financial Instruments and Market L.M.Bhole and Jitendra Mahakud
Financial Management- Sudhindra Bhatt
Internet
www.economictimes.indiatimes.com
www.tataaiglifeinsurance.com
www.thehindubusinessline.com
www.wikipedia.com historical perspective
www.lic.com
www.irdaindia.org
www.insuranceindustry.com
http://business.mapsofindia.com
http://www.tata.com/company/releases
Information from TATA AIG office and training session.
~ 69 ~
http://www.economictimes.indiatimes.com/http://www.tataaiglifeinsurance.com/http://www.thehindubusinessline.com/http://www.wikipedia.com/http://www.lic.com/http://www.insuranceindustry.com/http://business.mapsofindia.com/http://www.tata.com/company/releaseshttp://www.economictimes.indiatimes.com/http://www.tataaiglifeinsurance.com/http://www.thehindubusinessline.com/http://www.wikipedia.com/http://www.lic.com/http://www.insuranceindustry.com/http://business.mapsofindia.com/http://www.tata.com/company/releases -
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