project report 24

8/2/2019 Project Report 24

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A SUMMER TRAINING REPORT ON

A COMPARATIVE STUDY ON UNIT LINKED INSURANCE

POLICIES (ULIPs) IN INDIA.Conducted

at

(CHANDIGARH)

UNDER THE SUPERVISION OF: SUBMITTSD BY:

Mr. Gurmej Singh Ram Parkash

DESIGNATION: Roll No. 1210742

Branch Manager

SUBMITTED TO:

M.M. INSTITUTE OF MANAGEMENT

MAHARISHI MARKANDESHWAR UNIVERSITY,

MULLANA (AMBALA) HARYANA-133207


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MM INSTITUTE OF MANAGEMENT MMU, MULLANA, AMBALA

DECLARATION

This is to certify that the summer training report, A comparative study on ULIPs in

India is an authentic work carried out by me under guidance and supervision of MR.

Gurmej Singh (BRANCH MANAGER) at Bharti-AXA Life Insurance (Chd.).

The report is being submitted in partial fulfillment of the requirements for the award

of the degree of MASTER DEGREE IN BUSINESS ADMINISTRATION from

MM INSTITUTE OF MANAGEMENT, MAHARISHI MARKANDESHWAR

UNIVERSITY MULLANA, HARYANA.

Ram Parkash


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ACKNOWLEDGEMENT

Live as if you were to die tomorrow. Learn as if you were to live forever.

Gandhi

The satisfaction and euphoria that accompany the successful completion of any task

would be incomplete without mentioning the people who made it possible, whose

consistent guidance and encouragement crowned the efforts with success.

I would consider it my privilege to express my gratitude and respect to Mr.

GURMEJ SINGH for having accorded me the opportunity to learn in their

organization.

I cannot forget the contribution of the staff of Bharti-Axa Life Insurance Co., as I

troubled them through my queries at every stage of their work and I really appreciate

the patience with which they resolved my doubts amidst their busy schedule, I express

my sincere thanks to all of them.

I would express my thanks and gratitude to the senior most person of the branch Mr.

P. K. Thakur & Dr. Amit Mittal (Principal of MMIM) for his able guidance and

support throughout the tenure of summer training.

RAM PARKASH


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PREFACE

Practical training is an important part of the theoretical studies. It is of an immense

importance in the field of management. It offers the students to explore the valuable

treasure of experience and an exposure to real work culture followed by the industries

and thereby helping the students to bridge the gap between the theories explained in

the books and their practical implementations.

Training plays an important role in future building of an individual so that he/she can

better understand the real world in which he has to work in future. The theory greatly

enhances our knowledge and provides opportunities to blend theoretical with the

practical knowledge where trainees get familiar with certain aspects of industries .

The topic which I have taken for project isCOMPARATIVE ANALYSIS OF UNIT

LINKED INSURANCE POLICIES (ULIPs) VIS-A-VIS OTHER

INVESTMENT OPTIONS AVAILABLE IN THE MARKET that has been

suggested to me by Mr. Gurmej Singh (ASSTT. BRANCH MANAGER)

ULIPS plays an important role in insurance policies.

The recent development in the financial innovation is Unit Linked Insurance

Policies (ULIPs), which covers the concept of mutual fund and insurance.


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CONTENTS

CERTIFICATE

ACKNOWLEDGEMENT

PREFACE

Chapter No. Particulars. Page No.

Ch-1 Introduction 1

Ch-2 Company Profile 23

Ch-3 Research Methodology 39

Ch-4 Data Analysis and Interpretation 42

Ch-5 Findings & Suggestions 54

Bibliography/References 59

Annexure 60

Questionnaire


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Chapter-1

Introduction

INSURANCE

Insurance is a form of risk management in which the insured transfers the cost of

potential loss to another entity in exchange for monetary compensation known as the

premium.

Insurance allows individuals, businesses and other entities to protect themselves

against significant potential losses and financial hardship at a reasonably affordable

rate. We say "significant" because if the potential loss is small, then it doesn't make

sense to pay a premium to protect against the loss. After all, you would not pay a

monthly premium to protect against a $50 loss because this would not be considered a

financial hardship for most.

Insurance is appropriate when you want to protect against a significant monetary loss.

Take life insurance as an example. If you are the primary breadwinner in your home,

the loss of income that your family would experience as a result of our premature

death is considered a significant loss and hardship that you should protect themagainst. It would be very difficult for your family to replace your income, so the

monthly premiums ensure that if you die, your income will be replaced by the insured

amount. The same principle applies to many other forms of insurance. If the potential

loss will have a detrimental effect on the person or entity, insurance makes sense.

Everyone that wants to protect themselves or someone else against financial hardship

should consider insurance. This may include:

Protecting family after one's death from loss of income Ensuring debt repayment after death Covering contingent liabilities Protecting against the death of a key employee or person in your business Buying out a partner or co-shareholder after his or her death Protecting your business from business interruption and loss of income Protecting yourself against unforeseeable health expenses Protecting your home against theft, fire, flood and other hazards
http://www.investopedia.com/terms/i/insurance.asphttp://www.investopedia.com/terms/p/premium.asphttp://www.investopedia.com/terms/l/lifeinsurance.asphttp://www.investopedia.com/terms/c/contingentliability.asphttp://www.investopedia.com/terms/c/contingentliability.asphttp://www.investopedia.com/terms/l/lifeinsurance.asphttp://www.investopedia.com/terms/p/premium.asphttp://www.investopedia.com/terms/i/insurance.asp


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Protecting yourself against lawsuits Protecting yourself in the event of disability Protecting your car against theft or losses incurred because of accidents And many more

History of insurance

History of insurance refers to the development of a modern business in insurance

against risks, especially regarding ships, cargo, and buildings ("property" and "fire"),

death ("life" insurance), automobile accidents ("auto"), and the cost of medical

treatment (health insurance). The industry has been profitable and has provided

attractive employment opportunities for white collar workers. It helps eliminate risks

(as when fire insurance companies demand safe practices and the availability of fire

stations and hydrants), spreads risks from the individual or single company to the

larger community, and provides an important source of long-term finance for both the

public and private sectors.

Ancient world

The first methods of transferring or distributing risk were practiced by Chinese and

Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively.

Chinese merchants travelling treacherous river rapids would redistribute their wares

across many vessels to limit the loss due to any single vessel's capsizing. The

Babylonians developed a system which was recorded in the famous Code of

Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a

merchant received a loan to fund his shipment, he would pay the lender an additional

sum in exchange for the lender's guarantee to cancel the loan should the shipment be

stolen.

Achaemenian monarchs were the first to insure their people and made it official by

registering the insuring process in governmental notary offices. The insurance

tradition was performed each year in Nowruz (beginning of the Iranian New Year);

the heads of different ethnic groups as well as others willing to take part, presented
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gifts to the monarch. The most important gift was presented during a special

ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin)

the issue was registered in a special office. This was advantageous to those who

presented such special gifts. For others, the presents were fairly assessed by the

confidants of the court. Then the assessment was registered in special offices.

The purpose of registering was that whenever the person who presented the gift

registered by the court was in trouble, the monarch and the court would help him.

Jahez, a historian and writer, writes in one of his books on ancient Iran: "[Whenever

the owner of the present is in trouble or wants to construct a building, set up a feast,

have his children married, etc. the one in charge of this in the court would check the

registration. If the registered amount exceeded 10,000 Derrik, he or she would receive

an amount of twice as much.]

A thousand years later, the inhabitants ofRhodes created the 'general average', which

allowed groups of merchants to pay to insure their goods being shipped together. The

collected premiums would be used to reimburse any merchant whose goods were

jettisoned during transport, whether to storm or sink age.

The ancient Athenian "maritime loan" advanced money for voyages with repayment

being cancelled if the ship was lost. In the 4th century BC, rates for the loans differed

according to safe or dangerous times of year, implying an intuitive pricing of risk with

an effect similar to insurance.

The Greeks and Romans introduced the origins of health and life insurance c. 600

BCE when they created guilds called "benevolent societies" which cared for the

families of deceased members, as well as paying funeral expenses of members. Guilds

in the middle Ages served a similar purpose. The Talmud deals with several aspects

of insuring goods. Before insurance was established in the late 17th century, "friendly

societies" existed in England, in which people donated amounts of money to a general

sum that could be used for emergencies.

Medieval and Early modern

Separate insurance contracts (i.e., insurance policies not bundled with loans or other

kinds of contracts) were invented in Genoa in the 14th century, as were insurance

pools backed by pledges of landed estates. The first known insurance contract dates
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from Genoa in 1347, and in the next century maritime insurance developed widely

and premiums were intuitively varied with risks. These new insurance contracts

allowed insurance to be separated from investment, a separation of roles that first

proved useful in marine insurance. The first printed book on insurance was the legal

treatise On Insurance and Merchants' Bets by Pedro de Santarm (Santerna), written

in 1488 and published in 1552.

Insurance became far more sophisticated in post-Renaissance Europe, and specialized

varieties developed. The will of Robert Hayman, written in 1628, refers to two

policies he has taken out with a wealthy Londoner: one of life insurance and one of

marine insurance. Toward the end of the 17th century, London's growing importance

as a centre for trade increased demand for marine insurance. In the late 1680s, Mr.

Edward Lloyd opened a coffee house that became a popular haunt of ship owners,

merchants, and ships captains, and thereby a reliable source of the latest shipping

news. It became the meeting place for parties wishing to insure cargoes and ships, and

those willing to underwrite such ventures. Today, Lloyd's of London remains the

leading market (note that it is not an insurance company) for marine and other

specialist types of insurance, but it works rather differently than the more familiar

kinds of insurance.

Insurance as we know it today can be traced to the Great Fire of London, which in

1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon

opened an office to insure buildings. In 1680, he established England's first fire

insurance company, "The Fire Office," to insure brick and frame homes.

In the late 19th century, "accident insurance" began to be available, which operated

much like modern disability insurance. This payment model continued until the start

of the 20th century in some jurisdictions (like California), where all laws regulating

health insurance actually referred to disability insurance.

The first insurance company in the United States underwrote fire insurance and was

formed in Charles Town (modern-day Charleston), South Carolina in 1732, but it

provided only fire insurance.
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Modern Europe

German and British government programs

Germany built on a tradition of welfare programs in Prussia and Saxony that began as

early as in the 1840s. In the 1880s Chancellor Otto von Bismarckintroduced old age

pensions, accident insurance, medical care and unemployment insurance that formed

the basis of the modern European welfare state. His paternalistic programs won the

support of German industry because its goals were to win the support of the working

classes for the Empire and reduce the outflow of immigrants to America, where wages

were higher but welfare did not exist.

After 1905, led by the Liberal Party, the British introduced a system of social

insurance as well. It was greatly expanded after 1944.

American history

Colonial

Benjamin Franklin helped to popularize and make standard the practice of insurance,

particularly Property insurance to spread the risk of loss from fire, in the form of

perpetual insurance. In 1752, he founded the Philadelphia Contribution ship for the

Insurance of Houses from Loss by Fire. Franklin's company was the first to make

contributions toward fire prevention. Not only did his company warn against certain

fire hazards, it refused to insure certain buildings where the risk of fire was too great,

such as all wooden houses.

The sale of life insurance in the U.S. began in the late 1760s. The Presbyterian Synods

in Philadelphia and New York founded the Corporation for Relief of Poor and

Distressed Widows and Children of Presbyterian Ministers in 1759; Episcopalian

priests created a comparable relief fund in 1769. Between 1787 and 1837 more than

two dozen life insurance companies were started, but fewer than half a dozen survived.
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19th century

Most insurance companies operated locally. The ambitious ones expanded

geographically in the 1830s, such as the New York Life Insurance and Trust

Company in upstate New York, and the Baltimore Life Insurance Company in theMid-Atlantic and Upper South. They built a network of agents to develop markets in

different cities. The goal was to only insure people "of sound health, and of sober

habits, without hereditary disease, and not belonging to families remarked for short

lives." The company had to judge the reliability of agents, who sought out clients,

canceled dubious policies, and judged the health of potential customers. The agents

were not medical men, but they were instructed to ask applicants some standard

questions:

"Is he now in good health, and does he usually enjoy good health, or how

otherwise? . . . Has he at any time been afflicted with gout, asthma,

consumption, scrofula, convulsions, palsy, or any other disease likely to

impair his constitution? . . . Has he been vaccinated, or had the small pox? . . .

Is he of a sedentary turn, or accustomed too much exercise? . . . Do you know

of any circumstance which renders insurance on his life more than usually

hazardous?"

A better solution came late in the 19th century when the companies employed doctors

who used standardized criteria.

Moral hazards

An important concern for insurance companies was the moral hazard--people might

set fires to collect property insurance--or even commit suicide or murder when life

insurance was involved. From the opposite angle, religious people refused to consider

insurance against God's decisions. Fraud was also a problem, as people lied on

applications, broke policy restrictions, or falsified their own deaths so their family

could collect. Sharon Murphy, "How to Make a Dead Man: Murder, Fraud and Life

Insurance in 19th-century America," Financial History, spring 2010, Issue 97, pp 28-

39


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Slaves

Prior to the Civil War (1861-65), some insurance companies in the South insured the

lives of slaves for their owners. In response to bills passed in California in 2001 and

in Illinois in 2003, the companies have been required to search their records for such

policies. New York Life for example reported that Nautilus sold 485 slaveholder life

insurance policies during a two-year period in the 1840s; they added that their trustees

voted to end the sale of such policies 15 years before the Emancipation Proclamation

of 1863.

20th century

Social Security

Until the passage of the Social Security Act in 1935, the federal government had

never mandated any form of insurance upon the nation as a whole, but this program

expanded the concept and acceptance of insurance as a means to achieve individual

financial security that might not otherwise be available. That expansion experienced

its first boom market immediately after the Second World War with the original VA

Home Loan programs that greatly expanded the idea that affordable housing for

veterans was a benefit of having served. The mortgages that were underwritten by the

federal government during this time included an insurance clause as a means of

protecting the banks and lending institutions involved against avoidable losses.

During the 1940s there was also the GI life insurance policy program that was

designed to ease the burden of military losses on the civilian population and survivors.

During the 1970s and 1980s there was a growth in support for the requirement for

drivers to have insurance as a means of proving financial responsibility since it was

recognized that the automobile, in the case of an accident, could cause significant

collateral damage. It soon followed that car insurance became a mandatory

requirement for all drivers

Brief history of insurance sector

Insurance sector in India has completed all the facets of competitionfrom being an

open competitive market to being nationalized and then getting back to the form of a
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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.

Important milestones in the Indian life insurance business

1912: The Indian Life Assurance Companies Act came into force forregulating the life insurance business.

1928: The Indian Insurance Companies Act was enacted for enabling thegovernment to collect statistical information on both life and non-life

insurance businesses.

1938: The earlier legislation consolidated the Insurance Act with the aim ofsafe guarding the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies were taken overby the central government and they got nationalized. LIC was formed by anAct of Parliament, viz. LIC Act, 1956. It started off with a capital of ` 5 crore

and that too from the Government of India.

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.

Important milestones in the Indian general insurance business

1907: The Indian Mercantile Insurance Ltd. was set up which was the firstcompany 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


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patterns.

1968: The Insurance Act improved for regulating investments and set minimalsolvency levels and the Tariff Advisory Committee was set up.

1972: The General Insurance Business (Nationalization) Act, 1972nationalized 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.

Insurance companies in India

IRDA has till now provided registration to 12 private life insurance companies and 9

general insurance companies. If the existing public sector insurance companies are

considered then there are presently 13 insurance companies in the life side and 13

companies functioning in general insurance business. General Insurance Corporation

has been sanctioned as the "Indian reinsurer" for underwriting only reinsurance

business.


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TYPES OF INSURANCE

(A) LIFE INSURANCE:

Term Life Insurance

Permanent Life Insurance

ULIPS

(B) GENERAL INSURANCE

Fire Insurance

Marine Insurance

Accident Insurance

(A)Life Insurance

Life Insurance is a contract providing for payment of a sum of money to the person

assured or, following him to the person entitled to receive the same, on the happening

of a certain event. It is a good method to protect your family financially, in case of

death, by providing funds for the loss of income.


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Life Insurance or Long-Term Insurance

Long term insurance is so called because it is meant for a long-term period which may

stretch to several years or whole life-time of the insured. Long-term insurance covers

all life insurance policies. Insurance against risk to one's life is covered under

ordinary life assurance. Ordinary life assurance can be further clasified into following

types:

Types of Ordinary

Life Assurance

Meaning

1. Whole Life

Assurance

In whole life assurance, insurance company collects premium

from the insured for whole life or till the time of his retirement

and pays claim to the family of the insured only after his death.

2. Endowment

Assurance

In case of endowment assurance, the term of policy is defined for

a specified period say 15, 20, 25 or 30 years. The insurance

company pays the claim to the family of assured in an event of

his death within the policy's term or in an event of the assured

surviving the policy's term.

3. Assurances for

Children

i).Child's Deferred Assurance: Under this policy, claim by

insurance company is paid on the option date which is calculated

to coincide with the child's eighteenth or twenty first birthday. In

case the parent survives till option date, policy may either be

continued or payment may be claimed on the same date.

However, if the parent dies before the option date, the policy

remains continued until the option date without any need for

payment of premiums. If the child dies before the option date, the

parent receives back all premiums paid to the insurance company.

ii). School fee policy: School fee policy can be availed by

effecting an endowment policy, on the life of the parent with the

sum assured, payable in installments over the schooling period.

4. Term Assurance The basic feature of term assurance plans is that they providedeath risk-cover. Term assurance policies are only for a limited


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time, claim for which is paid to the family of the assured only

when he dies. In case the assured survives the term of policy, no

claim is paid to the assured.

5. Annuities Annuities are just opposite to life insurance. A person entering

into an annuity contract agrees to pay a specified sum of capital

(lump sum or by installments) to the insurer. The insurer in return

promises to pay the insured a series of payments until insured's

death. Generally, life annuity is opted by a person having surplus

wealth and wants to use this money after his retirement.

There are two types of annuities, namely:

Immediate Annuity: In an immediate annuity, the insured pays a

lump sum amount (known as purchase price) and in return the

insurer promises to pay him in installments a specified sum on a

monthly/quarterly/half-yearly/yearly basis. Deferred Annuity: A

deferred annuity can be purchased by paying a single premium or

by way of installments. The insured starts receiving annuity

payment after a lapse of a selected period (also known as

Deferment period).

6. Money Back

Policy

Money back policy is a policy opted by people who want

periodical payments. A money back policy is generally issued for

a particular period, and the sum assured is paid through periodical

payments to the insured, spread over this time period. In case of

death of the insured within the term of the policy, full sum

assured along with bonus accruing on it is payable by hte

insurance company to the nominee of the deceased.


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UNIT LINKED INSURANCE POLICIES

Mutual funds is the 'safety of the principal' guaranteed, plus the added

advantage of capital appreciation together with the income earned in the form

of interest or dividend. Insurance is a provision against risk and it is a device

with which man tries to protect himself from risk in life. The recent

development in the financial innovation is Unit Linked Insurance Policies

(ULIPs), which covers the concept of mutual fund and insurance.

A Unit Linked Insurance Policies (ULIPs) is one in which the customer is

provided with a life insurance cover and the premium paid is invested in

either debt or equity products or a combination of the two. In other words, it

enables the buyer to secure some protection for his family in the event of his

untimely death and at the same time provides him an opportunity to earn a

return on his premium paid. In the event of the insured person's untimely death,

his nominees would normally receive an amount that is the higher of the sum

assured or the value of the units (investments). To put it simply, ULIP attempts

to fulfill investment needs of an investor with protection/insurance needs of an

insurance seeker. It saves the investor/insurance-seeker the hassles of

managing and tracking a portfolio or products.

Traditionally, insurance products have been associated with attractive returns

coupled with tax benefits. The returns were often so compelling that insurance

products competed with investment products for a place in the investors

portfolio. Insurance policies then were symbolic of the times when high

interest rates and the absence of a rational risk-return trade-off were the norms.

The softening of interest rates introduced a degree of much-needed

rationality to endowment plans; attractive returns at low risk became a

thing of the past. This also coincided with an upturn in equity markets and the

emergence of a new breed of market-linked insurance products like ULIPs.

While in conventional insurance products the insurance component takes

precedence over the savings component, the opposite holds true for


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ULIPs. More importantly ULIPs (powered by the presence of a large

number of variants) offer investors the opportunity to select a product which

matches their risk profile; for example an individual with a high risk appetite

can shun traditional endowment plans (which invest about 85% of their funds

in the debt instruments) in favor of a ULIP which invests largely in equities.

In traditional insurance products, the sum assured is the cornerstone; in ULIPs,

premium payments are the key component. ULIPs are remarkably similar to

mutual funds in terms of structure and functioning; premium payments made

are converted into units and a net asset value (NAV) is declared. Investors

have the choice of enhancing their insurance cover, modifying premium

payments and even opting for a distinct asset allocation than the one they

originally opted for. also if an eventuality were to occur, in case of traditional

products, the sum assured is paid along with accumulated bonuses ; conversely

in ULIPs , the insured is paid either the sum assured or investment corpus

whichever is higher. While few would dispute the value-add

that ULIPs can provide to one s insurance portfolio and financial planning;

the same is not without its flipside. For the uninitiated, understanding the

functioning of ULIPs can be quite a handful! The presence of what seems to

be relatively higher expenses, rigidly defined insurance and investment

components and the impact of markets on the corpus clearly make

ULIPs a complex proposition.

Traditionally, the insurance seekers role was a passive one restricted to

making premium payments; ULIPs require greater participation from both the

insured and the insurance advisor. As is the case with most evolved

investment avenues, making informed decisions is the key if investors inULIPs wish to truly gain from their investments. The various aspects of ULIPs

dealt with in this publication will certainly further the ULIP investors cause.

HOW ULIPs MANAGE MONIES:

Broadly speaking, most life insurance companies offer individuals 4 options to

choose from; Aggressive/Growth funds, balanced funds, Debt funds and


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Money market funds. They differ primarily in the nature of their investments

as well as their risk profiles which is shown in the graph below:

Aggressive/Growth fund

Such funds invest a major portion of the premiums in the equity markets. They

are therefore, considered to be high on the risk parameter. The investment

mandate, though largely the same, may differ slightly across various life

insurance companies. For example, while most companies have a mandate to

invest upto 100% of the aggressive/growth fund corpus in stocks, a few

cannot exceed say, 80% of their investments in equities. The above mandate

has the potential to make a difference to the returns generated by the ULIP

portfolio. For example, if stock markets look attractive from a long -term

perspective, an individual can take advantage of the same by investing in the

aggressive/growth fund option so long as his risk profile coincides with the

higher risk levels associated with such an investment.

Debt fund

These types of funds invest the premium money in debt instruments like gsecs,

bonds and AAA-rated securities. Such funds are 'low risk' in nature when

compared to their equity/balanced counterparts. The returns though, tend to be

lower and steadier than the equity/ balanced fund.

Debt funds act as a good avenue for individuals to park their corpus in case

they feel that the stock markets are overheated and could be headed for a

correction. They also add value for individuals who feel that they have

attained their targeted returns and would now like to book profits by shifting

a part/whole of their corpus into debt instruments. Besides, if one considers

the tax benefits which life insurance offers to individuals, then

debt investments offer a good opportunity when compared to avenues such as

bank fixed deposits.


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Balanced fund

A balanced fund invests the premium money in a portfolio, which consists of

both equities as well as debt instruments in varying proportions. The balance is struck

by investing predominantly (generally upto 60% of the portfolio) inequities. The allocation to equities varies across insurance companies. Balanced funds

are considered to be medium risk investments vis - -vis aggressive / growth funds

which have a higher portion of assets in equities.

Investments in balanced funds are ideal for individuals who are apprehensive

of taking the 100% equity route but would still like to add a dash of equity to

their portfolio to spruce up returns. Balanced funds can also add value to

individual portfolios when the stock markets are running high and individuals would

like to moderate their risks with the help of an equity component.

Money market fund/Liquid fund

Such a fund invests the premium money it receives in short -term liquid

instruments like bank deposits and money market instruments. By short- term, we

mean instruments, which have a maturity of one year or less. This fund is considered

to be very safe on the risk parameter and stable on the returns front. Individuals can

use such funds to park their money for the short term.

Capital guarantee products

A few insurance companies also offer ULIPs with a capital guarantee. This

product guarantees the return of at least the premiums that have been paid over

the policys tenure should the fund value fall lower than the premiums paid. Capital

guarantee , for most insurance companies, is applicable usually on the

premium, which is net of expenses and the applicable bonus, if any. At kotak life

insurance kotak safe investment plan, kotak flexi plan and the retirement plan offers

the guaranteed maturity value (GMV).i.e., the capital guarantee. Such ULIPs are

primarily balanced funds in nature with a difference; they invest upto 30%

of their portfolio in stocks and the remaining 70% in debt instruments. The safety of

the capital guarantee stems from the fact that 70% of the premium money is


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invested in relatively safe debt instruments, which moderates the risks of investing in

stocks but might lower potential returns.

Bharti AXA Life Insurance launches ULIP with increasing guarantee

Announcement / Banking June 03, 2009, 19:56 IST

Bharti AXA Life Insurance Company Limited, the private life insurance joint venturebetween Bharti Enterprises and AXA, world leader in financial protection, todayannounced the launch of an innovative premium guarantee product - GuaranteeBuilder.

Speaking at the launch, Mr.Nitin Chopra, CEO, Bharti AXA Life said, The launchof Guarantee Builder is in line with our objective to provide best-in-class products tosuit the needs of different customer profiles. While our other ULIPs partner withcustomers in their financial planning for long-term needs, our premium guaranteeproduct addresses the needs of those traditional and new investors who are wary ofmarket volatility - as is the case currently - but would still like to participate in theIndian growth story.

As the name suggests, Guarantee Builder provides the perfect balance of growth andprotection. Aligned to our focus on providing innovation that is packaged for long-term customer benefit, Guarantee Builder is also not just a premium guaranteeproduct. It provides customers the benefit of increasing Guaranteed Maturity Value(GMV), which is a first-of-its-kind benefit offered to Indian customers.

GMV is the sum of the investment premiums payable over the term of the policy.Guarantee Builder provides customers the comfort of the GMV increasing by 1%each year till it reaches 115% of GMV at maturity (if the Reference Rate* is at least3.5% for each financial year).

Mr. Shyamal Saxena, Chief Distribution and Marketing Officer of Bharti AXA Lifesaid, At maturity, the customer gets the fund value or 115% of the GMV, whicheveris higher. Thus, the customer is not just insulated from the impact of the market fall,but is also provided an opportunity to enjoy the benefits of long-term investing with ahigher GMV.

In addition, the new Guarantee Fund, Build n Protect provides customers the option toremain invested in equity up to 40% over the long-term. In the event of the customerwanting to shift to larger equity allocation, Guarantee Builder provides the flexibilityto move out of the guarantee by switching out of Build n Protect Fund and investingin non-guaranteed funds.

Such flexibility in product design allows the policyholder to manage investments

effectively in any market condition. This, we believe, provides customers theconfidence to manage a financial crisis situation, while allowing them to shift to highyield funds in a stable market environment.

Another significant flexibility for customers is the policy reinstatement facility, whichprovides customers the assurance of not foregoing the Guarantee even if premium


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payments have been missed inadvertently, Mr. Saxena adds. The GMV has a

reinstatement period of 2 years from lapse, provided all due premiums are paid alongwith interest.

The special addition of 2.5% of average policy fund value at the end of the 10th and15th year respectively provides customers the benefit of wealth creation over the

long-term. The protection is comprehensive as Guarantee Builder provides DeathBenefit of Sum Assured PLUS Fund Value, with Sum Assured being ten times theannual investment premium.

*Reference Rate = Interest Rate (Yield) on the 10 year Government of India Bonddeclared by RBI on 31st March every financial year.

Bharti Enterprises

Bharti Enterprises is one of Indias leading business groups with interests in telecom,agri. business, financial services, retail and manufacturing. Bharti has been a

pioneering force in the telecom sector with many firsts and innovations to its credit.Bharti Airtel, a group company, is one of Asias leading providers oftelecommunications services with operations in India and Sri Lanka spanning Mobileservices, Tele-media services and Enterprise services. Bharti Airtel has been voted asIndia's most innovative company, in a survey conducted by The Wall Street Journal.Bharti Teletech is the countrys largest manufacturer and exporter of telephone

terminals. Bharti has a joint ventureBharti Del Monte (formerly Field Fresh Foods)with Del Monte Foods India, to offer fresh and processed fruits and vegetables inthe domestic as well as international markets. Bharti has joint ventures with AXA,world leader in financial protection and wealth management, for Life Insurance,General Insurance and Asset Management. Bharti has retail business under a companycalled Bharti Retail. It also has a joint venture - Bharti Wal-Mart - with Wal-Mart forwholesale cash-and-carry and back-end supply chain management operations in India.

AXA GROUP (AXA SA)

Since the AXA name was created in 1985, the Group's growing international presenceand wide range of quality products and services have established AXA as one of thefew successful global brands in the financial services industry. AXA's strategic focusis global, aimed at developing a single worldwide brand, being powerful in every oneof its markets and developing synergies across the Group. The AXA Group is

committed to international expansion and sees commitment to the Asia-PacificRegion as offering many opportunities for future growth. As of 31 December 2008,AXA had over 80 million clients worldwide, 135,000 employees, 91.2 billion Eurosin consolidated revenues, 816 billion Euros in assets under management, and 4,044million Euros in underlying earnings.

Headquartered in Paris and active across all five continents in 55 countries, AXA isfocused on the world's major markets, in particular Europe, North America andselected countries in Asia Pacific. A global leader in Financial Protection, the Groupsupports its clients, both individuals and businesses, at every stage in their lives byproviding products and services to meet their needs, including insurance, personal

protection, savings and estate planning.


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AXA is listed on most of the world's major stock markets. A number of Groupcompanies are also listed in their local markets: Australia, London, Paris, Frankfurtand New York. The Group enjoys AA-range ratings with the three leading globalrating agencies. AXA was also ranked 15th in 2008s FORTUNE GLOBAL 500

survey of The Worlds Largest Corporations, and ranked top under the categoryInsurance: Life, health (stock). AXA was ranked no. 55 in Inter-brands list of Top

Global Brands in the Business Week magazine published in September 2008.

About AXA Asia Life and AXA Asia Pacific Holdings

AXA Asia Life is part of AXA Asia Pacific Holdings Limited, and has operations inHong Kong, the Philippines, Indonesia, Thailand, Singapore, Malaysia, India andChina serving approximately 2.5 million customers.

AXA Asia Pacific Holdings Ltd is listed on the Australian Stock Exchange and isapproximately 53 percent owned by AXA SA. In 2008 AXA Asia Pacific HoldingsLimited reported a 2 percent increase in operating earnings at A$555.6 million and

ended 2008 with assets of A$779 million in excess of the regulatory requirements.

AXA is committed to become the preferred company in financial protection andwealth management by 2012. It is available, attentive and reliable to the needs ofAXA customers.

MAJOR COMPETITORS

INSURER INDIAN PARTNER

ICICI PRUDENTIAL LIFE

INSURANCE

ICICI

SBI LIFE INSURANCE STATE BANK OF INDIA

LIFE INSURANCE

CORPORATION

LIC

Reliance Life Insurance Reliance

MAX NEW YORK LIFE

INSURANCE

MAX INDIA

BIRLA SUNLIFE ADITYA BIRLA GROUP


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INSURANCE

ALLAINZ BAJAJ LIFE

INSURANCE

BAJAJ AUTO

HDFC STANDARD LIFE

INSURANCE

HDFC


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Chapter:- 2 Company Profile

Bharti Group Overview

Founded in 1976, by Sunil Bharti Mittal, Bharti has grown from being a manufacturer

of bicycle parts to one of the largest and most respected business groups in India.

With its entrepreneurial spirit and passion to undertake business projects that are

transformational in nature, Bharti has created world-class businesses in telecom,

financial services, retail, and foods.

Bharti started its telecom services business by launching mobile services in Delhi

(India) in 1995. Since then there has been no looking back and Bharti Airtel, the

groups flagship company, has emerged as one of top telecom companies in the world

and is amongst the top five wireless operators in the world.

Through its global telecom operations Bharti group operates under the Airtel brand

in 19 countries across Asia and Africa India, Sri Lanka, Bangladesh, Seychelles,

Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon,

Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda,and Zambia. In addition, the group also has mobile operations in Jersey, Guernsey.

Over the past few years, the group has diversified into emerging business areas in the

fast expanding Indian economy. With a vision to build Indias finest conglomerate by

2020 the group has forayed into the retail sector by opening retail stores in multiple

formatssmall and medium - as well establishing large scale cash & carry stores to

serve institutional customers and other retailers. The group offers a complete portfolio

of financial services life insurance, general insurance and asset management to

customers across India. Bharti also serves customers through its fresh and processed

foods business. The group has growing interests in other areas such as telecom

software, real estate, training and capacity building, and distribution of telecom/IT

products.

What sets Bharti apart from the rest is its ability to forge strong partnerships. Over the

years some of biggest names in international business have partnered Bharti.

Currently, SingTel, IBM, Ericsson, Nokia Siemens and Alcatel-Lucent are key


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partners in telecom. Wal-Mart is Bhartis partner for its cash & carry venture. Axa

Group is the partner for the financial service business and Del Monte Pacific for the

processed foods division.

Bharti strongly believes in giving back to the society and through its philanthropic

arm the Bharti Foundation it is reaching out to over 30,000 underprivileged children

and youth in India.

Vision and Values

Vision

By 2020 we will build Indias finest conglomerate by:

Always empowering and backing our people. Being loved and admired by our customers and respected by our partners. Transforming millions of lives and making a positive impact on society. Being brave and unbounded in realizing our dreams.

Values

Empowerment

We respect the opinions and decisions of others. We encourage and back people to do

their best.

Entrepreneurship

We always strive to change the status quo. We innovate with new ideas and energise

with a strong passion and entrepreneurial spirit.

Transparency

We believe we must work with honesty, trust and the innate desire to do good.


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Impact

We are driven by the desire to create a meaningful difference in society.

Flexibility

We are ever willing to learn and adapt to the environment, our partners and the

customers evolving needs.

AXA Group profile

In the financial markets, AXA is positioned as a global leader in Financial Protection.

Key figures:

95 million clients worldwide 214 391 employees (including exclusive sales associates) worldwide (at

December 31, 2010)

400,000 individual shareholders 91 billion euros in revenues (at December 31,2010)* 4.3 billion euros in adjusted earnings (at December 31,2010)

*Prepared in accordance with IFRS (International Financial Reporting Standards)


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AXA in figures

Revenues Indicators

IFRS, in Euro million 2005 2006 2007 2008 2009 2010

Life & Savings* 45,116 49,952 59,845 57,977 57,620 56,923

P&C 18,874 19,510 25,016 26,039 26,174 27,413

International Insurance 3,813 3,716 3,568 2,841 2,860 2,847

Asset Management 3,440 4,406 4,863 3,947 3,074 3,328

Banks 428 377 339 412 395 459

TOTAL 71,671 77,961 93,63191,216 90,123 90,972

*Life & Savings

New Business Volume (APE(1)

)5,463 6,186 7,694 6,789 6,188 5,780

(1) APE (Annual Premium Equivalent): represents 100% of new business regular

premiums + 10% of new business single premiums, in line with EEV methodology.

APE is group share.

Geographic breakdown of 2009 insurance revenues

France 23%

North America 13%

Northern Central and Eastern Europe 26%

UK & Ireland 7%

Asia-Pacific (including Japan) 11%

Mediterranean region 16%

International insurance* 3%

*excluding AXA RE


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Assets under management

2005 2006 2007 2008 2009 2010

Total (in Euro billion) 1,070 1,315 1,281 981 1,014 1,104

By company

Alliance Bernstein 46% 43% 42% 34% 34% 33%

AXA Investment Managers 40% 38% 43% 49% 49% 47%

Other AXA companies 14% 19% 15% 17% 17% 20%

Breakdown of Asset under Management

Managed on behalf of third party 54% 51% 51% 42% 41% 42%

Own account 33% 35% 34% 44% 43% 45%

Life insurance separate accounts 13% 14% 14% 13% 15% 13%

Adjusted earnings

Adjusted earnings of Euro 4.317 billion.

Adjusted earnings represent net income before the impact of exceptional operations,

goodwill and related intangibles amortization/impairments, and profit or loss on

financial assets (under the fair value option) and derivatives.

Underlying earnings

Underlying earnings of Euro 3.88 billion.

Underlying earnings are adjusted earnings, excluding net capital gains attributable to

shareholders.

P&C combined ratio

The combined ratio for property-casualty operations slightly deteriorated by 0.2 point

reaching 99.1%.


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Capital Ownership

Capital Ownership at December 31, 2010

Mutual AXA 13.9%

Treasury shares 1.1%

Individual shareholders 7.3%

Employees 6,5%

Other shareholders 4.5%

Institutional Shareholders: France 16.5%

Institutional Shareholders: North America 18.8%

Institutional Shareholders: United Kingdom and Ireland 11.5%

Institutional Shareholders: Germany 3.6%

Institutional Shareholders: Benelux 3.0%

Institutional Shareholders: other Europe 4.6%

Institutional Shareholders: rest of World 3.4%

BNP Paribas 5.4%

Reliance Group

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest

private sector enterprise, with businesses in the energy and materials value chain.

Group's annual revenues are in excess of US$ 58 billion. The flagship company,

Reliance Industries Limited, is a Fortune Global 500 company and is the largest

private sector company in India.
http://www.ril.com/http://www.google.co.in/imgres?imgurl=http://www.indiaretailing.com/upload/newsimage/reliance-logo.jpg&imgrefurl=http://www.indiaretailing.com/news.aspx?Id=2957&usg=__H35k8C8t6Skp8KE1o8W-97sZiIo=&h=203&w=225&sz=6&hl=en&start=3&zoom=1&tbnid=skjoPxAKooLp_M:&tbnh=97&tbnw=108&ei=DwZ7Tv2qAcSsrAeApYmpDw&prev=/search?q=RELIANCE+GROUP+LOGO&um=1&hl=en&sa=N&tbm=isch&um=1&itbs=1http://www.ril.com/


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Backward vertical integration has been the cornerstone of the evolution and growth of

Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of

backward vertical integration - in polyester, fibre intermediates, plastics,

petrochemicals, petroleum refining and oil and gas exploration and production - to be

fully integrated along the materials and energy value chain.

The Group's activities span exploration and production of oil and gas, petroleum

refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and

chemicals), textiles, retail, and special economic zones.

Reliance enjoys global leadership in its businesses, being the largest polyester yarn

and fiber producer in the world and among the top five to ten producers in the world

in major petrochemical products.

Major Group Companies are Reliance Industries Limited, including its subsidiaries

and Reliance Industrial Infrastructure Limited

.

Reliance Life Insurance

Our Founder

Few men in history have made as dramatic a contribution to their countrys economic

fortunes as did the founder of Reliance, Shri. Dhirubhai H Ambani. Fewer still have

left behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true

genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud

patriot, the leader of men, the architect of Indias capital markets, the champion of

shareholder interest.

But the role Dhirubhai cherished most was perhaps that of Indias greatest wealth

creator. In one lifetime, he built, starting from the proverbial scratch, Indias largest

private sector enterprise.
http://www.riil.in/http://www.riil.in/


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When Dhirubhai embarked on his first business venture, he had a seed capital of barely

US$ 300 (around ` 14,000). Over the next three and a half decades, he converted this

fledgling enterprise into a ` 60,000 crore colossusan achievement which earned

Reliance a place on the global Fortune 500 list, the first ever Indian private company to

do so.

Dhirubhai is widely regarded as the father of Indias capital markets. In 1977, when

Reliance Textile Industries Limited first went public, the Indian stock market was a

place patronized by a small club of elite investors which dabbled in a handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retail

investors to participate in the unfolding Reliance story and put their hard-earned money

in the Reliance Textile IPO, promising them, in exchange for their trust, substantial

return on their investments. It was to be the start of one of great stories of mutual

respect and reciprocal gain in the Indian markets.

Under Dhirubhais extraordinary vision and leadership, Reliance scripted one of the

greatest growth stories in corporate history anywhere in the world, and went on to

become Indias largest private sector enterprise.

Throughout this amazing journey, Dhirubhai always kept the interests of the ordinary

shareholder uppermost in mind, in the process making millionaires out of many of the

initial investors in the Reliance stock, and creating one of the worlds largest

shareholder familie

About Reliance Life Insurance

Reliance Life Insurance offers you products that fulfill your savings and protectionneeds. Our aim is to emerge as a transnational Life Insurer of global scale and

standard.

Reliance Life Insurance is an associate company of Reliance Capital Ltd., a part of

Reliance Group. Reliance Capital is one of Indias leading private sector financial

services companies, and ranks among the top 3 private sector financial services and

banking companies, in terms of net worth. Reliance Capital has interests in asset

management and mutual funds, stock broking, life and general insurance, proprietary

investments, private equity and other activities in financial services.


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Reliance Group also has presence in Communications, Energy, Natural Resources,

Media, Entertainment, Healthcare and Infrastructure

Achievements

3rd largest private player in a span of just 4 years, moved from 11th positionto 3rd

Amongst the fastest growing Companies for 4 years in a row Continuous increase in market share over 4 years; from 1.9% in 2005-06 to

10.26% in 2009 -10

RLIC has achieved a growth rate of 21% while the private industry has grownat 13%

Fastest to reach the 5 million policy mark Largest private insurer in terms of policy count in 2009-10 1145 branches 1,95,000 Advisors and over 16,000 employees RLIC continues to be amongst the foremost Life Insurance companies in India

to be certified ISO 9001:2000 for all the processes.

Awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007- Certificateof Merit in the Financial Services category by Council for Fair Business

Practices (CFBP).

The Company has also won the DL Shah Quality Council of IndiaCommendation Award in the services category in feb 2008 for its work on

promoting 'self help channels for service'


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Reliance Industries Limited to acquire Bhartis stake in the

Insurance Joint-Ventures with AXA in India

Mumbai, June 10, 2011

AXA, Bharti Enterprises (Bharti) and Reliance Industries Limited (RIL)

announced today having reached an understanding on the acquisition by RIL and its

associate Reliance Industrial Infrastructure Limited (RIIL) of Bhartis shareholding

of 74% in Bharti AXA Life Insurance Co. Ltd (Bharti AXA Life) and Bharti AXA

General Insurance Co. Ltd. (Bharti AXA GI).

This transaction is subject to negotiation and entering into legally binding agreements

between RIL, RIIL and AXA and obtaining necessary approvals from IRDA1 and

other relevant/applicable approvals.

On completion of the proposed transaction, RIL and RIIL would effectively own

respectively 57% and 17% in both insurance companies and would become AXAs

joint ventures partners in India. AXA would retain its current 26% shareholding and

would continue to manage the day to day operations of the JVs.

The proposed agreement contemplates an option by which AXA would acquire from

RIL and RIIL upto 24% shareholding in both the insurance companies in accordancewith the applicable regulations as and when the FDI2 regulations permit such holding

by AXA. Upon exercise of such option, RIL will effectively own 45%, RIIL will

effectively own 5% and AXA the balance 50% in both the insurance companies.

RIL and AXA will join forces to create market leading Life and General Insurance

businesses in India by leveraging their respective strengths and expertise.

In fiscal year 20113, Bharti AXA Life collected premiums of INR 7.9 billion (or ca.

Euro 132 million) and Bharti AXA GI collected gross direct premiums of INR 5.5

billion (or ca. Euro 92 million). In the recently concluded India Insurance Awards

organized by Indian Insurance Review in conjunction with Celent, the General

Insurance entity was rewarded with Personal Lines Growth Leadership Award for

2011.

1 Insurance Regulatory and Development Authority

2 Foreign Direct Investment

3 April 2010March 2011. Premiums are expressed in Indian GAAP


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Mumbai, June 10, 2011

About RIL

Reliance Industries Limited (RIL) is Indias largest private sector company on all

major financial parameters with a

turnover of INR 2,58,651 crore (US$ 58.0 billion), cash profit of INR 34,530 crore

(US$ 7.7 billion), net profit of INR

20,286 crore (US$ 4.5 billion) and net worth of INR 1,51,540 crore (US$ 34.0 billion)

as of March 31, 2011.

RIL is the first private sector company from India to feature in the Fortune Global 500

list of 'World's LargestCorporations' and ranks 100th amongst the world's Top 200 companies in terms of

profits. RIL ranks 68th in the

Financial Times FT Global 500 list of the world's largest companies. RIL is ranked

amongst the 50 Most

Innovative Company - 2010' in the World in a survey conducted by the US financial

publication - Business Week in

Collaboration with the Boston Consulting Group (BCG). In 2010, BCG also ranked

RIL as the second highest

Sustainable Value Creators for creating the most shareholder value over the decade

in the world.

RIL and RIIL key contacts:

Manoj Warrier: +91 98214 14954

Tushar Pania: +91 98200 88536

About Bharti Enterprises:

Bharti Enterprises is one of Indias leading business groups with interests in telecom,

agri business, retail and

manufacturing. Bharti has been a pioneering force in the telecom sector with many

firsts and innovations to its

credit. Bharti Airtel, a group company, is a leading global telecommunications

company with operations in 19 countries across Asia and Africa. The company offers

mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey

telecom solutions for enterprises and national & international long distance services to


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carriers. Beetel Teletech is the countrys largest manufacturer and exporter of

telephone terminals.

Bharti has a joint venture FieldFresh Foodswith Del Monte Pacific Ltd, to offer

fresh and processed fruits and vegetables in the domestic as well as international

markets. Bharti has forayed into retail business under a company called Bharti Retail.

It also has a joint venture - Bharti Wal-Mart - with Wal-Mart for wholesale cash-

andcarry and back-end supply chain management operations in India.

Bharti key contacts:

Raza Khan: +91 9871391881

Prem Subedi: +98 10868873

About AXA

The AXA Group is a worldwide leader in insurance and asset management, with214,000 employees serving 95 million clients. In 2010, IFRS revenues amounted to

Euro 91 billion and IFRS underlying earnings to Euro 3.9 billion. AXA had Euro

1,104 billion in assets under management as of December 31, 2010.

The AXA ordinary share is listed on compartment A of Euronext Paris under the

ticker symbol CS (ISN FR

0000120628Bloomberg: CS FPReuters: AXAF.PA). AXAs American

Depository Shares are also quoted on the OTC QX platform under the ticker symbol

AXAHY.

The AXA Group is included in the main international SRI indexes, such as Dow

Jones Sustainability Index (DJSI) and FTSE4GOOD.

This press release is available on the AXA Group website: www.axa.com

AXA Investor Relations: AXA Media Relations:

Mattieu Rouot: +33.1.40.75.46.85 Armelle Vercken : +33.1.40.75.46.42

AXA Individual shareholders Relations: +33.1.40.75.48.43

IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS

CONCERNING FORWARD-LOOKING

STATEMENTS

Certain statements contained herein are forward-looking statements including, but not

limited to, statements that are predictions of or indicate future events, trends, plans or

objectives. Undue reliance should not be placed on such statements because, by their

nature, they are subject to known and unknown risks and uncertainties. Please refer to


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the section Cautionary statements in page 2 of AXAs Document de Reference for

the year ended December 31, 2010, for a description of certain important factors, risks

and uncertainties that may affect AXAs business. AXA undertakes no obligation to

publicly update or revise any of these forward-looking statements, whether to reflect

new information, future events or circumstances or otherwise.

Benefits of Bharti AXA Life Insurance Plans

Bharti AXA Life Insurance is an Indian company, which came into limelight in

November 2006, where the Bharti Telecom Owner, revealed his interest in Life

Insurance, and invented Bharti AXA Life Insurance along with Bharti Retail Pvt. Ltd.

Both the Companies are doing well in India; however, Bharti AXA Life Insurance

Company is gaining more popularity.

Bharti AXA is not a single venture but it is a joint business venture of AXA and

Bharti, which are two different Pvt. Ltd. Companies that have tied up together. Bharti

Pvt. Ltd. Company is already very famous in India for its numerous avenues, but

AXA is an International Company who mainly focuses upon the financial protection

of the people. Moreover, the further tie up of both these PVT. Companies have come

with new growth prospects of the people. Even the success graph of Bharti AXA Life

Insurance Company is commendable, where in a short period of time this life


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insurance company have spread its name not in the Indian Market but also globally it

have approximately 4000 main branches which showcases its fast growth.

And because of its reliable polices more people are connecting to Bharti AXA Life

Insurance, day by day, while opting numerous life insurance plans according to their

need.

So let us tell you about some products of Bharti AXA Life Insurance:

Bharti AXA Sanjeevanithis product of life insurance plan, acts as whole life

coverage from any natural calamity.

Bharti AXA Secure Confidentthis plan gives you the confident security foryour future with higher return on low premium.

Bharti AXA Aspire Lifethis plan is beneficial for those people who want to

save their money for future prospects.

Bharti AXA Life Shieldagain this plan gives you the security against

natural/accidental calamities.

Bharti AXA Future Confidentwith the less premium and higher returns, this

plan promises a strong financial stability.

Bharti AXA Future Confident IIthis plan is similar with Future Confident I

but its term, conditions and duration of the policy may differentiate.

Bharti AXA Save Confidentunder this product you can save some amount

monthly by paying a regular premium, that later suppose to converted in a particular

subtotal at the time of maturity of the plan.

Bharti AXA Wealth Confidentthis plan assures the financial help during

health ailment.

Bharti AXA Spot Surakshaunder this plan, the main coverage is during

accidental calamity.


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Bharti AXA Bright Starsthis product is beneficial for childs future financial

security.

Bharti AXA Dream Life Pensionwith less premium and higher returns this

product promises a regular return in old age.

Bharti AXA Mortgage Credit Shieldafter natural death of the nominee this

plan provides the financial security to the family of nominee.

Bharti AXA Invest Confidentthis plan focuses upon market investment and

give returns accordingly.

Bharti AXA Swasthya Sanjeevanithis product is similar with wealth

confident plan, however the age limit may differentiate in each of them.


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Chapter:- 3

RESEARCH METHODOLOGY

TYPE OF DATA COLLECTED

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.

(Source: Marketing Research, Sumathi and Saranavel)

Primary Sources

These include the survey or questionnaire method, telephonic interview as

well as the personal interview methods of data collection.

Secondary Sources

These include books, the internet, company brochures, product brochures, the

company website, competitors websites etc, newspaper articles etc.

SAMPLING

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 the 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 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.

Sample size

The sample size for the survey conducted was 150 respondents.

Sample technique


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Convenience sampling technique was used in the survey conducted.

Objectives of the study

To know about the Fund Management of Bharti Axa Life Insurance

To understand about ULIPs

o Concepto Featureso Workingo Comparison with other companies ULIP.

To analyze the need and expectation of present and potentialcustomers through survey.

To analyze the fund performance over the period. To analyze market share of total industry and ULIP market.

Limitations of study

While doing the project on Fund Management of ULIPs of Kotak Mahindra Life

Insurance I collected the relevant material of ULIPs, But while preparing the report I

have undergone certain problems relating: -

Could not able to collect data for many years for performancebecause ULIPs are new to the market.

Time boundedness being one of the limitation being to analyzefund management in detail in short span is not an easy

job.

Some of the respondents were totally unresponsive and unaware.


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Chapter:- 4

Data Analysis and Interpretation

COMPETITIVE ANALYSIS

Comparing ulips

Insurer LIC SBI LifeBirla

Sunlife

Allianz

BajajBharti Axa

ICICI

Pru

ULIP Wealth PlusSmart

ULIP

Platinum

PremierMax Gain True Wealth Pinnacle

Entry Age 10-65 Yrs 8-60 Yrs 8-70 Yrs 8-60 Yrs 8-44 8-65 Yrs

Term 8 Yrs 10 Yrs 10 Yrs 10 Yrs 10 Yrs 10 Yrs

PPT Single or 3 3 or 5 10 7 5 3

Maturity

Age73 Yrs 70 Yrs 80 Yrs 70 Yrs 64 Yrs 75 Yrs

Mode

Single,

Yly, Hly,Qly,

ECS Monthly

Yly, Hly,

QLY,ECS

Monthly

Yly, Hly,

ECS Qly,ECS

Monthly

Yly,

Hly, QLY,

ECS Monthly

Annual Annual

Risk

Cover

SP 1.25-

5 Times;

Annual 5-10

Times

5 Times

of

Annual

Premium

5 Times of

Annual

Premium

5 Times of

Annual

Premium

SP 1.1-6

Times;

Annual 5

30

Times

5 Times

of

Annual

Premium

Death

Cover

SA + Fund

Value

SA or

Bid

Value

SA or Bid

Value

SA or Fund

Value

SA +

Fund Value

Or

Higher of

sum assured

SA or

Fund

Value

Extended

CoverYes No No No No No

DAB Yes - No - Riders No


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Premium

SP 40000;

Yly 20000

Hly 10000

Qly 5000

ECS 2000

Yly

50000

Hly

25000

Qly

15000

ECS

Yly 25000

Hly 15000

ECS, Qly

7500

Mly 5000

Yly 25000

Hly 15000

Qly 8000

ECS 3000

25000 PA50000

PA

Fund

Type

OneWealth

Plus FundTwo

Tenonly

1 is

guaranteed

One One One

NAV

Guarantee

7 Yr, Term

End

7 Yr 2

Dates

7Y3M,

Term End

Full Full 7 Yrs

Allocation

Charges

[1st Year]

11.25-

12.00%15% 10%

15.00-

20.00%8% 14%

Allocation

Charges2.50% for

PPT

5% for

PPT

5% for

PPT3.00-6.00% 5.5% (2-5)

0%(6+)

4% (2)

2% (3)

Partial

Withdraw3 Yrs 5 Yrs 3 Yrs 3 Yrs 5 Yrs 3 Yrs

Surrender 3 Yrs 3 Yrs 3 Yrs 3 Yrs 5 Yrs 3 Yrs

Surrender

ChargesNIL

3rd Yr

9%

4th Yr

2%

5th Yr

Nil

Within

3 Yr 40%

4 Yr 20%

5 Yr 10%

Within

3 Yr 20% 4

Yr 10%

Applicable,

No mention

in

brochure

3rd Yr

4%

4th Yr

2%

5th Yr

NIL

Policy

Admn

Charge

1st Yr 60

PM;

2nd Yr 25

PM

Escalation @

3%

Flat 60

PM +

INR 5

per

thousand

SA(3 Yr)

0.24% PM

of first

25000 and

0.40% of

annual

premium(3

1.26% of

First Year

SA

0.4% PM of

annual

premium

starting from

6th

policy yr

0.40-

0.60% of

Annual

Premium

PM for

3 Yrs


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Yr)

FMC 1% 1% 1.5% 1.25% 1.35% 1.35%

Guarantee

Charges0.35% 0.5%

Included in

FMC0.25% 0.35% 0.10%


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TABLE 1.

INVESTORS POINT OF VIEW

AGE OF RESPONDENTS

PARTICULARS

(YEARS)

NUMBER OF

RESPONDENTS

20-30 40

30-40 57

40-50 31

50-60 22

Fig.- Respondents According to Age

27%

38%

21%

14%

NUMBER OF RESPONDENTS

20-30

30-40

40-50

50-60


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TABLE 2.

WORK PROFILE OF RESPONDENTS

PARTICULARS NUMBER OF

RESPONDENTS

HOUSEWIFE 11

WORKING

PROFESSIONAL

39

SELF EMPLOYED 39

GOVT. SERVICE

EMPLOYEE

21

PVT.SERVICE

EMPLOYEE

40

Fig.- Respondents With Work Profile

11

39

39

21

40


HOUSEWIFE

WORKING PROFESSIONAL

SELF EMPLOYED

GOVT. SERVICEEMPLOYEE

PVT.SERVICE EMPLOYEE


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TABLE 3.

ANNUAL INCOME


RESPONDENTS

LESS THAN RS. 2 LAC 34

RS. 2 LACRS. 5 LAC 65

RS.5 LACRS. 10 LAC 41

RS. 10 LAC & ABOVE 10

Fig.- Respondents According Annual Income

34

65

41

10


LESS THAN RS. 2 LAC

RS. 2 LAC RS. 5 LAC

RS.5 LAC RS. 10 LAC

RS. 10 LAC & ABOVE


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PARTICULARS NUMBER OF RESPONDENTS

TRADITIONAL INSURANCE

PLANS

27

UNIT LINKED INSURANCE

POLICIES(ULIPs)

45

FIXED DEPOSITS 22

GOLD 10

REAL ESTATE 11

MUTUAL FUNDS 35

Fig.- Investment Options Respondents

27

45

22

10

11

35


TRADITIONAL INSURANCE

PLANS

UNIT LINKED INSURANCE

POLICIES(ULIPs)

FIXED DEPOSITS

GOLD

REAL ESTATE

MUTUAL FUNDS

TABLE 4.

INVESTMENT OPTIONS


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TABLE 5

INVESTMENT ATTRIBUTES


RESPONDENTS

SAFETY 25

LIQUIDITY 18

TAX 42

RETURNS 40

TRANSPARENCY 10

LIFE COVER 15

Fig.- Respondents Having Investment Attribute

25

18

42

40

10

15


SAFETY

LIQUIDITY

TAX

RETURNS

TRANSPARENCY

LIFE COVER


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TABLE 6

EXPECTED RETURNS ON INVESTMENT

PARTICULARS (%) NUMBER OFRESPONDENTS

LESS THAN 10 11

1020 35

2030 43

30 & ABOVE 65

Fig.- Expected Return on Investment

11

35

43

65


LESS THAN 10

10 20

20 30

30 & ABOVE


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TABLE 7

EXPECTED TIME FOR RETURNS

PARTICULARS(YEARS) NUMBER OF RESPONDENTS

WITHIN 1 50

13 30

35 40

5 & ABOVE 30

Fig.- Expected Time For Returns

The above data is analyzed as follows:

Following investment options appears to be the most sought after investment options:

50

30

40

30


WITHIN 1

1 3

3 5

5 & ABOVE


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Chapter:- 5

FIINDINGS & SUGGESTIONS

The world of ulip insurance plans is very cruel. The plans are very complex, theagents are deceptive and sales men more than friendly advisers as touted by insurance

companies and there are not many authoritative and impartial sites comparing various

ulip products.

Also, comparison of various ulip products in itself is very tedious and complex job as

various companies have come up with various features for various ulip plans. This

makes comparing ulip plans of different companies as comparing apples with guava.

Infect, there is so many type of ulip plans in one company itself with varying features

that it becomes really difficult to compare ulip plans.

The parameters needs to be considered while choosing a ULIP are explained below so

that you should not be miss-leaded or cheated by any insurance agent or sales person.

Also, I advice all my readers to have an eye on all these parameters based on the

information provided on the company printed brochure only, as the chances of agents

or sales people printing their own sales support promotional materials which normallytalks only about the benefits but not the demerits of the product.

There are some Basic Parameters to Compare:

1. Premium Allocation Charges:

This is the very basic thing to be considered as the premium allocation charges in

different plans vary from 2% to 100% of the first premium. There are plans of few

companies where they project that the premium allocation charge is nil, but the fact is

they would be charging equal amount or more than that through policy administration

charges or initial management charges or surrender charges. Therefore you should be

more cautious about such products where sales people claim that the premium

allocation charges are nil.

Premium allocation charges are levied on an insurance product primarily to cover the

cost involved in paying the commission to agents or sales people and the huge

marketing expenses involved in acquiring every insurance policy. Normally an

Insurance agent or a broker or a sales person earn between 2% to 80% of the first year


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premium as his/her part of commission apart from the regular renewal commission he

receives thereafter.

The reason for any insurance company to take out so much of money from the hard-

earned investment of an innocent customer is Competition. Yes the competition in

Insurance industry is completely pushing away the ethical side of the insurance

business and today almost 60-80% of the insurance business is been done in unethical

way. Indian Insurance market is completely driven by sales people as buying

insurance still remain as a luxury than a very basic need for Indians. Even after 10

years of privatization of insurance industry there is very little effort been put forth to

promote term insurance plans as the profit to a insurance company by selling term

insurance plans is very less more than that selling a term insurance plan is certainly an

uncertain commitment for the insurance companies.Therefore, I advice all my readers to be very cautious while comparing the premium

allocation charges levied on different products of different companies and As I

mentioned earlier the premium allocation of ULIPs starts from as low as 2%.

2. Policy administration charges:

Policy administration charges are those charges that the company takes

project report 24

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