reliance life insurance-simple saritha-0584

8/6/2019 Reliance Life Insurance-Simple Saritha-0584

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INTERNSHIP REPORT ON

RELIANCE LIFE INSURANCE

Submitted in partial fulfillment of M.B.A Degree Course of

M.P.BIRLA INSTITUTE OF MANAGEMENT

Submitted By

SIMPLE SARITA

(REGD.NO:05 XQCM 6091)

Under the Guidance Of

Prof. JAIRAJ NAIR

M.P.BIRLA INSTITUTE OF MANAGEMENT

BANGALORE


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DECLARATION

I hereby declare that this Internship report titled INTERNSHIP

REPORT ON RELIANCE LIFE INSURANCE COMPANY is a

record of independent work carried out by me, towards the partial

fulfillment of requirements for MBA course of Bangalore University

at M.P.Birla Institute of Management. This has not been submitted in

part or full towards any other degree.

PLACE: Bangalore SIMPLE SARITA

DATE:


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PRINCIPALS CERTIFICATE

This to certify that this Internship report titled INTERNSHIP

REPORT ON RELIANCE LIFE INSURANCE COMPANY has

been prepared by Miss SIMPLE SARITA, bearing the registration

no.05 XQCM 6091 under the guidance and supervision of Prof.

JAIRAJ NAIR, MPBIM, Bangalore.

PLACE: Bangalore Principal

DATE: (Dr. N. S. Mallavalli)


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GUIDES CERTIFICATE

This to certify that this Internship Report titled INTERNSHIP

REPORT ON RELIANCE LIFE INSURANCE COMPANYdone by

SIMPLE SARITA bearing Registration No.05 XQCM 6091 carried

under my guidance during the academic year 2006-07 is in partial

fulfillment of the requirement for the award of MBA degree by

Bangalore University. To the best of my knowledge this report has not

formed the basis for the award of any other degree.

Date: Prof. JAIRAJ NAIR

Place: Bangalore (Internel Guide)


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ACKNOWLEDGEMENT

There are people who, simply by being what they are influence and inspire us to

do things, which we ourselves never thought capable of doing. Among these are

my parents, teachers and friends.

Any work without experience is a sure recipe for casualty in the whole project.

As a trainee in RELIANCE LIFE INSURANCE it seemed quite tough to me to

have such experience. But I am Lucky enough that I was backing of several

experienced persons who have guided me like mentor whenever I was in need.

At RELIANCE LIFE INSURANCE I have been fortunate to receive strong

support and coordination of Mr. Uday S Sir (senior sales manager). The support

from the faculty teacher cannot be avoided. I am indebted to their full dedicational

teaching contribution. I am very thank full to Mr. Jairaj Nair who provided all

solutions to my quarries.

Last but not the least it was the love and indispensable support of my parent and

family member who despite of all inconvenience provided me with the best

possible of every thing in my assent to the present accomplishment. It should be

deemed that those who are not mentioned have not gone without my heartful

acknowledgment. I am also thankful to my classmates for their helping hand.


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Executive Summary

This report can be broadly divided into four segments those are as follows:

1.Definition of insurance and industry overview.

2.Organizational overview.

3.Research problems and findings.

4.Research limitations, recommendations and learning outcome.

The research problems given to me, was mainly concerned with finding out the

consumer perception about life insurance sector and to find out the brand

awareness of Reliance life among the consumer. To find out the same I took the

help of questionnaire method and tried to find out the conclusion on the basis of

responses given by the respondents in the questionnaire.

The second task for me was to do a comparative analysis between the productsoffered by Reliance Life with that of the products offered by some of the leading

players in the private sector of the life insurance industry. For this I mainly

depended on the secondary data i.e. company broachers, information provided on

the Internet but on some occasions I also went to different companies to collect

some first hand informations about their products. The research findings are

based on the information that I have collected in the above-mentioned ways.

Then the analysis was made on the pitfalls in the research and was can Reliance

life improve as per the growth in life insurance sector is concerned. And atlast, the

learning outcome has been stated.


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Chapter 1

INTRODUCTION

About the Indian Insurance Industry:

INDIAN INSURANCE

LIFE

INSURANCE

GENERAL

INSURANCE


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LIFE INSURANCE:

Insurance business in India is growing at an annual rate of 21.9%. Together withbanking services it accounts for 7.1%of GDP. But insurance penetration as

compared to other nations of the world is very low in India. In 2004-05 it was

2.53% for life insurance and 0.65% for general insurance.

Life insurance penetration in India was less than 1% till 1990-91. During the 90s

it was between 1 2% and from 2001 onwards it is over 2%. This is due to active

role played by IRDA in licensing private players and taking steps to increase

awareness among masses. Indias insurance sector is poised for explosive growth

powered by better penetration into rural and semi urban regions. Gross insurance

premium have been rising The gross premium collected in the last fiscal year was

Rs.27000crores as compared to that of Rs.25343crores last year.

Since liberalization of insurance sector in 2001, 14 life insurance companies have

entered the market out of which 13 are joint ventures with international

companies. While private players have eaten up a part of LICs market share,

PSU have been witnessing tremendous growth. LICs premium collection is

Rs.18000crores as compared to only 200crores in 1957. LICs premium accretion

grew by 42%. Among the private player companies like Bajaj-Allianz and ICICI

have captured the major portion of the market and others are still trying to

establish themselves in the Indian market.

PUBLIC

SECTOR

PRIVATE

SECTOR

PUBLIC

SECTOR

PRIVATE

SECTOR


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GENERAL INSURANCE:

General insurance in India has been expecting growth except in some portfolios

like motor insurance, fire and engineering. These portfolios are still under tariff-

this means that premium depends on fixed predetermined rate structure.

General insurance has low market penetration. It is 1.95% and ranks 51st.

However, in collection of premium it is ranked 23rd

. The ratio of the premium

collected to that of GDP is 0.58%. The main reason for the poor performance of

general insurance industry was because of the slow settlement of claims.

Moreover the rate of claim in India was highest in the world. It was 70%

compared to 40% internationally. This meant that out of 100 people who have

insured for their commodities, 70 claimed for loss or damage. The main reason

for the lack of demand for general insurance is that people consider it as an

unnecessary expenditure. However itmust be noted that thegeneral insurance

has been earning consistent profits and has an efficient dividend paying record

accompanied by a steady growth in its financial resources. Through investments

in the government sector and socially oriented sectors the industry has

immensely contributed to the nations development. The industry is recognized

as one of the largest financial institutions in the country. Some of the private

players in this sector are-ICICI, Lombard, Reliance, Royal-Sundaram etc.

PRIVATE PLAYERS IN THE LIFE INSURANCE SECTOR:

The different private players in the life insurance sector and their associations

with foreign companies are given below:

COMPANY INDIAN

PROMOTER/

PARTNER

FOREIGN

INSURER

TOTAL

CAPITAL

(RS. Mill.)

FDI% FOREIGN

CAPITAL

(RS. Mill.)


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Reliance

Life

Insurance

Reliance

Group-

ADAG

None 2,170 0 0

Aviva Life Dabur Aviva (UK) 4,590 26 1193.4

Bajaj-

Allianz

Bajaj Auto Allianz

(Germany)

3,680 26 960

Birla

Sunlife

Aditya Birla

Group

Sunlife

(Canada)

4,000 26 1,040

HDFC

Standard

HDFC Standard

Life (UK)

2,500 18.9 470

ICICI

Prudential

ICICI Bank Prudential

(UK)

10,850 26 2820

ING Vysya Vysya Bank ING Ins.

(Netherlands)

4,400 26 680

Kotak

Mahindra

Old Mutual

Kotak

Mahindra

Bank

Old Mutual

(South

Africa)

2,600 26 680

Max

New York

Max India New York

Life (US)

5,000 26 1,300


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Met Life J & K Bank Met Life (US) 3,550 26 920

Sahara Life

Insurance

Sahara India None 1,000 0 0

SBI Life SBI Cardiff

(France)

3,500 26 910

TATA AIG TATA Group AIG (US) 3,810 26 990

Some of the companies who are waiting to come to the life insurance sector are:

IDBI FORTIS

AXA BHARTI

Syndicate Bank

Market Share Of LIC And Private Players Upto March 2006:

LIC

Private Players

LIC market share continued to decline in the period upto march 2006; it

declined to 71.44% from 78.23% in the same period last year. On the other hand


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the market share of the private players is continuously growing up, it increased

to 28.56% from 21.77% in terms of insurance premium.

INSURANCE SECTORS CONTRIBUTION TOWARDS

NATIONS ECONOMY:

Some surveys have predicted that India and China will play a very vital role in

the years to come. Indian economy can be termed as an emerging economy as it

is doubling its GDP in 3 to 5 years and moreover it is not dependent on any

particular sector for its GDP growth.

If we look at the GDP of the Indian economy very closely over the years, we can

easily come to know the changing structure of the economy. We can also come to

know the changing contribution of the various sectors like agriculture,

manufacturing and the service sector. In the financial year 1993-94, agricultural

sector contributed to 31%, manufacturing accounted to 26.3% and the service

sector contributed to 42.7% of the total GDP of the country. Thus over the years

as India became an emerging economy in 2003-04, agricultural sector

contributed for 21.7%, manufacturing contributed for 26.8% whereas service

sector contributed for 51.4% of the total GDP.

There has been 7.5% growth in the total GDP of the country and is estimated to

grow at 7.5% in 2005-06. The Indian economy has shown signs of strong

performance despite a rise in oil prices, high inflation rate and abnormal rains in

many parts of the country. The overall growth of the Indian economy has been

equally supported by all the three sectors of the economy, i.e. the agriculture,

manufacturing and the service sector. Insurance, together with banking sector,

contributes to about 7.1% of the total GDP of India, and the gross premium

collected contributes to about 2% of the total GDP of the country.

The insurance sector in India has shown full potential from being an open

competitive market to nationalization and back to a liberalized market again.


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Tracing the developments in the Indian insurance sector reveals the 360 degree

turn witnessed over a period pf almost 200 years.


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ORGANISATIONAL OVERVIEW


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Chapter 2

ORGANISATIONAL OVERVIEW

Before talking about Reliance Life Insurance Company Limited, lets have a

brief introduction about its parent company Anil Dhirubhai Ambani Group.

Reliance is brand name, which was made popular by Mr.Dhirubhai Ambani all

over the world, and his son Mr. Anil Ambani is carrying on the same tradition.

After splitting with his brother Mr. Mukesh Ambani, Anil Ambani created his

ADAG and soon he started to achieve the success that was once started by his

father.

ANIL DHIRUBHAI AMBANI GROUP:

The Reliance-Anil Dhirubhai Ambani Group is among Indias top three private

sector business houses on all major financial parameters, with a capitalization of

Rs100,000 crore (US$ 22 billion), net assets of Rs 31,500 crore (US$7 billion),

and net worth to the turn of Rs27,000crore (US$ 6 billion).Across different

companies, the group has a customer base of over 50 million, the largest in India,

and a shareholder base of over 8 million, among the largest in the world.

Through its products and services, the Reliance-ADA Group touches the life of 1

in 10 Indians every single day. It has a business presence that extends to over

45000 towns and 300000 villages and 5 continents across the world.

The interests of the Group range from communications (Reliance

Communications) and financial services (Reliance Capital Ltd) to generation,

transmission and distribution of power (Reliance Energy), infrastructure and

entertainment (Reliance Media & Entertainment).


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ADA GROUPS RELIANCE

STRUCTURE


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Consumer Focus

Excellence in Execution

Team Work

Proactive Innovation

Leadership by Empowerment

Social Responsibility

Respect for Competition

Stakeholder Interest

We value the trust of shareholder, and keep their interests paramount in every

business we make, every choice we exercise.

Network

We possess no greater asset than the quality of our human capital and no greater

priority than the retension, growth and well being of our vast pool of human

talent.

Consumer Focus

We rethink every business product and service from the standpoint of the

consumer, so as to exceed expectations at every touch point.

Excellence in Execution

We believe in excellence of execution - in large, complex projects as much as

small everyday tasks. If something is worth doing, it is worth doing well.


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VISION OF ADA GROUP:

To build a global enterprise for all our stakeholders, and

A great future for our country,

To give millions of young Indians the power to shape their destiny,

The means to realize their full potential

COMPANIES UNDER ADA GROUP

A)Reliance capital

Reliance capital (RCL) is one of Indias leading and fastest growing private sector

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

services and banking companies, in terms of net worth.

The company has interest in asset management and mutual funds, life and general

insurance, private equity and proprietary investments, stock broking and other

activities in financial services.

RCL is registered as a depository participant with National Securities Depository

Ltd (NSDL) and Central Depository Services Ltd (CDSL) under the Securities

and Exchange Board of India (Depositories and Participants) Regulations, 1996.

RCL has sponsored the Reliance Mutual Fund within the framework of the

Securities and Exchange Board of India (Mutual Fund) Regulations, 1996. RCL

primarily focuses on funding projects in the infrastructure sector and supports the

growth of its subsidiary companies,Reliance Capital Asset Management Limited,Reliance Capital Trustee Co. Limited, Reliance General Insurance Company

Limited and Reliance Life Insurance Company Limited. As of March 31,2005, the

companys investment in infrastructure projects stood at Rs.1071crores. The

investment portfolio of RCL is structured in a way that realizes the highest post-

tax return on its investments.


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B)Reliance Communication Ventures Limited

The flagship company of the Reliance ADA Group, Reliance Communication

Ventures Limited, is the realization of our founders dream of bringing about a

digital revolution that will provide every Indian with affordable means of

communication and a ready access to information.

The company began operations in 1999 and has over 20 million subscribers today.

It offers a complete range of integrated telecom services. These include mobile

and fixed line telephony, broadband, national and international long distance

services, data services and a wide range of value added services and applications

aimed at enhancing the productivity of enterprise and individuals.

C) Reliance Energy Limited

Reliance Energy Limited, incorporated in 1929, is a fully integrated utility

engaged in the generation, transmission and distribution of electricity. It ranks

among Indias top listed private companies on all major financial parameters,

including assets, sales, profit and market capitalization.

It is Indias foremost private sector utility with aggregate estimated revenue of Rs

9,500 crore (US$ 2.1 billion) and total assets of Rs 10,700 crore (US$ 2.4 billion).

Reliance Energy Limited distributes more than 21 billion units of electricity to

over 25 million consumers in Mumbai, Delhi, Orissa and Goa, across an area that

spans 1,24,000 sq. kms. It generates 941 MW of electricity, through its power

stations located in Maharashtra, Andhra Pradesh, Kerela, Karnataka and Goa.

The company is currently pursuing several gas, coal, wind and hydro-based power

generations project in Maharashtra, Arunachal Pradesh, Uttar Pradesh and

Uttaranchal with aggregate capacity of over 12,500 MW. These projects are at

various stages of development.


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Reliance Energy Limited is vigorously participating in emerging opportunities in

the areas of trading and transmission of power. It is also engaged in a portfolio of

services in the power sector in Engineering, Procurement and construction (EPC)

through a network of regional offices in India.

D) Reliance Health

In a country where health is fast becoming a booming industry, Reliance health is

a focused healthcare services company enabling the provision of solution to

Indians at affordable prices. The company aims at providing integrated health

services that will compete with the best in the world. It also plans to venture into

diversified fields like Insurance, Administration, Healthcare Delivery and

Integrated Health, Health Informatics and Information Management and

Consumer Health.

Reliance health aims at revolutionizing healthcare in India by enabling a

healthcare environment that is both affordable and accessible through partnerships

with government and private businesses.

E) Reliance Media & Entertainment

As part of the Reliance ADA Group, Reliance Entertainment is spearheading

the Groups foray into the media and entertainment space. Reliance

Entertainments core focus is to build significant presence for Reliance in the

Entertainment eco-system: across content and distribution platforms. The key

content initiative are across movies, music, sports, gaming, internet and mobile

portals, leading to direct opportunities in delivery across the emerging digital

distribution platforms: digital cinema, IPTV, DTH and Mobile TV. RelianceADA Group acquired Adlabs Films Limited in 2005, one of the largest

entertainment companies in India, which has interests in film processing,

production, exhibition & digital cinema. Reliance entertainment has made an

entry into FM Radio through Adlabs Radio, having won 45 stations in the recent

bidding, which will soon be the radio station with the largest footprint in India.


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COMPANY PROFILE


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Chapter 3

COMPANY PROFILE

RELIANCE LIFE INSURANCE COMPANY LIMITED:

As it has been presented before Reliance Life Insurance Company Ltd. is a part

of Reliance Capital, which is again a part of ADAG. Reliance Capital acquired

100% share of an Australian Based life insurance company i.e. AMP SANMAR

LTD in October 2005, to form the Reliance Life Insurance Company. Though the

acquisition was made in October, the functioning of Reliance Life started from

February 2006. It is one of the two private players (along with Sahara) in the life

insurance sector, which does not have any foreign collaboration. The basic idea

behind the formation of Reliance Life was to provide the people of India with

some better investment alternatives as well as to make them aware about theusefulness of life insurance for catering their future needs. Reliance Life

Insurance has a pan presence and a range of products catering to individual as

well as corporate needs. A total of 16 products covering savings, protection &

investment requirements. Out of 16 products 12 are targeted to individuals and

four to group business. Reliance Life is committed to attaining leadership

rankings in the industry within the next few years.

For the year ended 31st March 2006, during the period under review Reliance

Capital Limited acquired AMP Sanmar Life Insurance Company Limited with the

approval of Regulatory and Development Authority (IRDA). The premium

income increased to Rs.224crore from 107crore an increase of 109% within a

short span of six months of RCL taking over the company.


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Financial position for the quarter-ended 30th June 2006, the premium income

increased to Rs.132crores (US $ 38.8million) for the period under review up from

Rs.18crore in the first quarter for the previous year. An increase of 633%.

GOALS TO ACHIEVE:

Reliance Life Insurance has the following goals to achieve in the near future:

Emerge as a transnational life insurer of global scale and standard.

Achieve impeccable reputation and credentials through best business

practices.

To become the market leader among the private players in the Indian Life

Insurance sector by the end of the current financial year.

MISSION:

Create unmatched value for everyone through dependable, effective,

transparent and profitable life insurance and pension plans.

VISION:

Empowering everyone live their dreams.

GUIDING PRINCIPLES:

Customer care and satisfaction

Corporate Governance

Creativity and Innovation

Competitiveness


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a) Customer care and satisfaction: The foremost responsibility for an

organization is to provide its customers utmost care and satisfaction and

Reliance Life is no exception in this regard. The main objective of the

organization is to provide the customers with best possible financial plans,

which will match their needs and expectations.

b)Corporate Governance: In todays modern business world, corporate

governance is utmost essential because it gives a clear picture of the

organization to shareholders as well as to the general public at large. So, it is

aim of Reliance Life to maintain ethical practices in all their business

transactions, to promote a better picture of themselves.

c) Creativity and Innovation:After the IRDA act 1999, the private players

are also allowed to participate in the life insurance sector, and this has opened a

vast area of field to operate for many of the companies and thats why we see

that not less than 15 players have entered the market in the last few years. So, to

survive in this market, the goal of reliance life is Creativity and Innovation

which is the best way to success for any organization.

d) Competitiveness:It provides the base for any organization to operate in any

area of business and life insurance is no exception. Competitiveness provides

the urge for any company to outperform their competitors in the market and

become the leader in that particular sector. It is the competitiveness, which has

impelled Reliance life to set a goal such as to become the market leader among

all the private players by the end of the current financial year.

DEPARTMENTS AND BRANCHES OFRELIANCE LIFE:

Branches:


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There are more than 200 branches of Reliance Life spread all over the country, the

head office being situated in Chennai. In the city of Bangalore though there are only

3 branches of Reliance Life and those are situated in:

a) Malleshwaram

b) Jayanagar

c) Indiranagar

They are planning to open new branches at place like Mahatma Gandhi Road and

Koramangala very soon.

Departments:

The various departments that can be seen in an insurance organization and that has

been observed by me are as follows:

a)Marketing Department:This department mainly deals with the marketing

and promotion part of the insurance company. They spend most of their time in

formulating strategies to make their products known to the common people andto promote the same in easy and cost effective way.

Marketing at Reliance Life Insurance covers an array of activities like

advertising, branding, market development, channel support, direct and alliance

marketing, and corporate communications. The people in each of these sub

functions perform a unique job.

b)Sales Department: This department mainly deals with the sales part of theinsurance company; the department includes designations like Sales Manager

and Financial Advisor who personally contact people performing tasks of sales

of various products.


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c) Accounts/Financial Department: This department has the task of keeping

track of various expenses incurred by the various other departments of the

organization and also performs the task of allocating various funds to difference

departments according to their requirements.

d)Human Resource Department: The Human Resource manager of the

company handles this department. The function of this department involves the

well being of the employees of the company, i.e. to see whether there is

employee grievance in the organization or not and if it is there then what are the

possible causes for that and also try to find out the solutions for the same if

possible. In the area of Human Resources we are looking towards fulfilling our

core values through:

An open environment enabling free interaction between all levels.

A balanced scorecard approach to strategy deployment and

performance measurement, which set goals and measure financial,

customer focused, process related and employee development related

initiatives.

Aggressive Reward & Recognition plans including sales incentives.

Career Development plans that will identify potential and create

avenues for growth.

Intensive training practices for both functional as well as competency

development.

Knowledge sharing and certification practices.

Planned team building and fun events.

Creating Reliance Life Insurance family including employees,

associates and their families.


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e)Investment Department: This department mainly deals with the task of

investing the money of the policyholders in such a way that will ensure both

safety of the money and also a steady return on the same. The task of this

department is very difficult as it deals with the money given by the

policyholders, so it requires lot of thinking on part of the personnel of this

department before deciding where to invest the money.

f) Actuarial Department: This department is under the supervision of an

Actuary who decides the premiums and charges to be taken from the policy

holders on the basis of certain informations (like age, annual income etc.)

provided by the prospective customer. The task also involves the calculation of

mortality charges, which requires high statistical knowledge from ones point of

view. So, this department involves in the calculation of various amounts to be

charged from the prospective customer.

RELIANCE LIFE INSURANCE PRODUCTS:

Reliance Life Insurance has products, which can meet the needs of both the

individuals as well as the corporate houses. The products of the Reliance Life can

be divided broadly into two segments, namely:

a) Individual Products

b) Group Products

INDIVIDUAL PRODUCTS:

Reliance Life offers these products by mainly focusing to the needs of theindividual persons. These products will offer them the best solutions possible to

their different needs. The products offered under this category are as follows:

ENDOWMENT PLAN


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SPECIAL ENDOWMENT PLAN

CASH FLOW PLAN

CHILD PLAN

TERM PLAN

WHOLE LIFE PLAN

MARKET RETURN PLAN (ULIP)

GOLDEN YEAR PLAN

CONNECT TO LIFE PLAN

ENDOWMENT PLAN:This plan provides an easy and inexpensive way

to protect the needs of the customer, his/her family and business of the

customer. In this plan the customer has the option of choosing the sum assured

on the basis of his current fiscal condition and probable future expenses, he also

has the option of choosing the term of the plan. In the event of untimely death,

this plan will provide all the support necessary to the beloved ones of the

policyholder.

SPECIAL ENDOWMENT PLAN: This insurance policy is designed

for the people who want to combine savings with extended security. The special

feature of this plan is that the customer will get the benefit (life protection) of

the plan even after five years from the date on which the customer has stopped

paying the premium. This policy can also be taken as one, which can share the

profit of the company.

CASH FLOW PLAN:This policy is designed for the people who have a

recurring need of reinvestment in the business or look for short-term investment

channels. The advantage of this policy is that in no time the customer has to pay

a sizable amount of money as premium and on the other hand he can ensure a


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vesting options such as commuting and annuity options. This policy is available

for all individual ranging between the ages of 18 65.

CONNECT TO LIFE PLAN: This plan is another endowment life cover

where, the maximum cover is available up to Rs.10,00,000. Reliance Connect to

Life Plan ensures the customer to upgrade his policy by enhancing it at the end

of the first and the second year of his taking the policy and his cover is available

without any medical examination and the documentation needed is very

minimal.

GROUP PRODUCTS:

These insurance products are mainly designed keeping in mind the needs of the

group of people in an organization or any other place. The various plans under

this category are as follows:

TERM ASSURANCE PLAN

RELIANCE EMPLOYEE DEPOSIT LINKED INSURANCE SCHEME

(EDLI)


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RELIANCE GROUP GRATUITY POLICY

RELIANCE GROUP SUPER ANNUATION POLICY

TERM ASSURANCE PLAN: This policy is one-year renewable termassurance contract. The sum is paid on the happening of the event for which the

policy was taken within that one year. After one year the policy can be further

renewed for one more year.

RELIANCE EMPLOYEE DEPOSIT LINKED INSURANCE

SCHEME (EDLI): All establishments which have at least 10 full time

employees and which come under the purview of Employees provident fund

and miscellaneous provisions act 1952, have a provision to undertake Employee

Deposit Linked Insurance Scheme to provide life insurance to their employees.

Reliance EDLI has been approved as a substitute for the EDLI scheme 1976 that

was provided earlier.

RELANCE GROUP GRATUITY POLICY: It is a policy that offers

various services to manage the gratuity obligations of any particular

organization. It helps the management to provide all the benefits of gratuity to

the employees without requiring proper control from their behalf.

RELIANCE GROUP SUPERANNUATION POLICY: It is a

policy that offers various services to manage the superannuation obligation of

any particular organization. It gives choice to the organization to tailor the super

annuation facilities for their employees according to their convenience.


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Chapter 4

CORPORATE PROFILE:

CEO: Mr. P. NANDGOPAL

CFO: Mr. RAJESH BAHL

CMO: Mr. ROHIT GAURAV MULL

COO: Mr. K.V.SRINIVASAN

VICEPRESIDENT (group infrastructure): Mr. K.SURESH BABU

APPOINTED ACTUARY: Ms. POURNIMA GUPTE


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CHIEF INVESTMENT OFFICER: Mr. R. RANGARAJAN

HEAD HR: Ms. MANEESHA THAKUR

Mr. P Nandagopal joined Reliance Life Insurance Company Limited as CEO on

October 4th, 2005 - the day the share holding of AMP Sanmar was transferred to

Reliance Capital Group. He is an MBA with Finance and Marketing majors, an

Associate Company Secretary and a Fellow of the Insurance Institute of India.

Mr. Rajesh Bahl is the Chief Financial Officer (CFO) of Reliance Life Insurance

Company Limited. In his role as CFO, Mr. Bahl is responsible for the overall

finance and accounts operations.

Mr. Rohit Gaurav Mull is the Chief Marketing Officer at Reliance Life

Insurance Company Limited. In this role Mr. Mull is responsible for the overall

sales and marketing operations and heads the 5 sales channels, product, training

and marketing team at Reliance Life Insurance.

Mr. K.V. Srinivasan is the Chief Operating Officer of Reliance Life Insurance

Company Limited. In this assignment with Reliance Life Insurance, he heads the

Operations, Finance, IT, Legal & Secretarial departments.

Mr. K. Suresh Babu is the Vice President Group Infrastructure at Reliance

Life Insurance Company Limited and heads Branch Expansion and Group

Infrastructure.

Ms. Pournima Gupte is the Appointed Actuary at Reliance Life Insurance

Company Limited and heads the Actuarial Department.

Appointed Actuary is the position created by the IRDA Act. Though Appointed

Actuary happens to be an employee of the Company, he/she acts as proxy of the

Regulator and ensures that the provisions of the various acts (such as IRDA Act,


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Insurance Act etc) are complied with. On one hand, she has to protect the long

term interests of the policyholders and on the other, protect the interests of the

shareholders while complying with the various controls/restrictions imposed by

the Insurance Regulatory and Development Authority. To comply with her legal

obligations, the Appointed Actuary enjoys the privilege of attending the Board

meetings as a requirement of the relevant law.

Mr. R Rangarajan is the Chief Investment Officer at Reliance Life Insurance

Company Limited and heads the investment function. The objective of the

Investment team is to give best possible return on investments, keeping in view

the risk appetite of the Shareholders and Policyholders.

Ms. Maneesha Thakur heads the Human Resources Department at Reliance Life

Insurance Company Limited.

In this role, Ms. Thakur is responsible for developing a performance driven

culture and ensuring manpower availability as per budgeted numbers with

required competencies. She is also working on increasing media presence in

people related areas by positioning key hires and social initiatives at local levels.

She has also undertaken marketing and branding campaigns for key HRinitiatives. One of the most challenging tasks for her is to build organisational-

people capabilities and developing leaders


37/92

Chapter 5

SWOT ANALYSIS

STRENGTHS:

Impeccable brand name ofReliance.

Sound financial and infrastructural backup.

Real urge to become the leader in the market.

High quality service delivered by the company

Weaknesses:

Unawareness among the people about Reliance Life Insurance.

Recent split in the top management may have a bad impact on the general

public.

As they have recently come to the insurance sector, not aware about the pros

and cons of the sector.

OPPORTUNITIES:

Many people now a days are being aware of the benefits of insurance, so

there is a vast market to target by the company.


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Reliance group already has a huge number of customers in different fields of

operations, so there is possibility that those people may be willing to invest

in this area also.

The success in one of the fields in Reliance, which may create a good

feeling within the customers about Reliance Life Insurance also.

Company can extend its operations to rural and sub urban areas by

developing products, which suit their needs.

THREATS:

Most of the people still believe on public players like LIC, so it is very hard

to shift those customers from LIC to other companies like Reliance.

The number of players in the private insurance sector is increasing day by

day, so the competition is getting tough.

The failure in one of the fields of Reliance may affect adversely the business

opportunities of Reliance Life Insurance.


39/92

PART II

A REPORT

ON

1.Consumer perception about Life Insurance sector and to make astudy with regards to Reliance Life among masses.

2.Comparative analysis between the Reliance products with those ofits counterparts.


40/92

Chapter 6

CONSUMER PERCEPTION ABOUT LIFE

INSURANCE AND STUDY WITH REGARDS TO

RELIANCE LIFE AMONG MASSES

TRACKING POTENTIAL CUSTOMERS

Know about the various investment alternatives that are preferred by people.

Find out the important criterias that common people think are important

before investing in a life insurance policy and

Increase the brand awareness.

EIGHT MAJOR BENEFITS, WHICH ONE SEEKS

FOR, IN A LIFE INSURANCE COVER:

a) Premium

b) Charges taken by company

c) Policy Term

d) Rider Benefits provided by the company

e) Bonus and interests paid by the company

f) Services provided by the company (pre and post sales),

g) Accessibility of the company &


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h) Brand

SAMPLE SIZE:

I used my friends, family and contacts for sampling which approximately

numbers to 50 people.

RESEARCH FINDINGS:

Analysis is done by sighting at the various investment alternatives that are

available to the people and among that which are the most preferred ones. The

following data was collected through the available 50 samples, journals, and

magazines and through net as well.

Investment alternative preferred by

people

18%

15%

13%13%

12%

10%

8%7%

4%

Insurance

Mutual Fund

PPF

Real Estate

Bank Deposit

Equity

Post Office

Gold and

SilverBonds andDebentures


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43/92


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Rs.3.01-5lakh

>Rs.5lakh

Total

Missingsystem

Total

23

31

98

2

100

23

31

98

2

100

23.5

31.6

100

68.4

100

Annual income

010

203040

< Rs. 1lakh Rs. 1.01-3

lakh

Rs. 3.01-5

lakh

>Rs. 5 lakh

annual income

freq

uency

From the above representation we can see that 31% of the respondents belong to a

group, which has an annual income of more than 5lakh, followed by 27% who

belong to the group of annual income between 1 - 3lakh and 23% who have an

annual income between 3 - 5lakh. Among the 100 respondents, 2 of them are

unwilling to express their annual income to us, which represents the missing

system in the chart presented above.

Hold life insurance policy:

Frequency Percent Valid

Percent

Cumulative

Percent

No

Yes

Total

23

77

100

23

77

100

23

77

100

23

100


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Hold life insurance policy

0

50

100

No Yes

hold life insurance policy

fre

quency

Among 50 respondents that were taken as a sample size, 37 of them had life

insurance policy that was either taken by him/her self or it was taken by their

parents on their name, while 13 out of them did not have any kind of life

insurance policy from any company.

Awareness about-Reliance Life:


Percent

Cumulative

Percent

No

Yes

Total

64

36

100

64

36

100

64

36

100

64

100

Awareness-RIL

020

40

60

80

No Yes

awareness

fre

quency


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Awareness among the people about Reliance Life Insurance, the response was

very disappointing from the point of view of the company. Out of 50 respondents

not less than 32 respondents have the knowledge that Reliance has also come to

the life insurance sector by overtaking the Australia based life insurance company

AMP SANMAR, while the rest 18 of them were aware of it and many among this

18 cheered skeptics regarding the company.

IMPORTANT CRITERIA BEFORE TAKING LIFE

INSURANCE POLICY:

Now, let us see what criteria people consider most important before taking a life

insurance policy (the criteria for the study have been mentioned before). Here, the

most important criteria as perceived by the people are being rated as 8, (as there

are 8 criteria that have been suggested under the research study). Here the number

of respondents is only 38, because those people who do not have any life

insurance policy have been excluded from the purview of the study.

Premium:


Percent

Cumulative

Percent

1

2

3

4

5

6

7

Total

42

6

6

6

11

5

1

77

42

6

6

6

11

5

1

77

54.5

7.8

7.8

7.8

14.3

6.5

1.3

100

54.5

62.3

70.1

77.9

92.2

98.7

100


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Missing System

Total

23

100

23

100

Premium

0

10

20

30

40

50

1 2 3 4 5 6 7

Now if we consider one of the criteria we can see that 54.5% of the respondent

has rated it as the most important thing that they consider before taking any

insurance policy from any company, nobody has rated it as the least important

criteria. So, it can be clearly interpreted that the premium that the policyholder

has to pay to continue his/her policy plays a very important role before selecting

the terms and conditions of the policy and also the company from which the

policy is to be taken.

CHARGES:


Perc

ent

Cumulative

Percent

1

2

3

4

6

7

17

20

6.0

7.0

17.0

20.0

7.8

9.1

22.1

26.0

7.8

16.9

39.0

64.9


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5

6

7

8

Total

MissingSystem

Total

12

9

3

3

77

23

100

12.0

9.0

3.0

3.0

77.0

23.0

100.0

15.6

11.7

3.9

3.9

100.0

80.5

92.2

96.1

100.0

Charges

0

5

10

15

20

25

1 2 3 4 5 6 7 8

Series1

Now, if we consider the charges the customer has to pay to the insurance

company like fund management charges, administration charges etc. most of the

people consider it as an important criteria which can dictate the terms before

deciding on whether to take the policy or not. But very few people (only 7.8% of

the total respondents), considers that it can be the most important criteria before

taking the decision on life insurance policy.


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POLICY TERM:


Percent

Cumulative

Percent

1

2

3

4

5

6

7

8

Total

Missing System

Total

17

9

8

17

14

5

2

4

76

24

100

17.0

9.0

8.0

17.0

14.0

5.0

2.0

4.0

76.0

24.0

100

22.4

11.8

10.5

22.4

18.4

6.6

2.6

5.3

100.0

22.4

34.2

44.7

67.1

85.5

92.1

94.7

100.0

Policy term

0

5

10

15

20

1 2 3 4 5 6 7 8


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The tenure of the policy i.e. the policy term depends on the policy holder but

sometimes the insurer can also influence the policy term by giving some

additional benefits on policy taken for a longer period of time or vice versa. In the

study that was conducted by us, we found out that nearly 22% of the respondents

think that policy term offered by the company is the most important thing that one

should consider before taking any life insurance policy while 5.3% of the

respondents think that it is the least important that one should consider before

taking any life insurance policy.

RIDER BENEFITS:


Percent

Cumulative

Percent

1

2

3

4

5

6

7

8

Total

Missing System

14

5

13

12

15

12

3

3

77

23

140

50

13.0

12.0

15.0

12.0

3.0

3.0

77.0

23.0

18.2

6.5

16.9

15.6

19.5

15.6

3.9

3.9

100.0

18.2

24.7

41.6

57.1

76.6

92.2

96.1

100.0


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Total 100 100

Rider benefits

0

5

10

15

20

1 2 3 4 5 6 7 8

Rider benefits are the additional benefits that the insurer company provides to itscustomers for attracting them. Things like accidental benefit, critical illness

benefit and permanent disablement benefit are provided as rider with original

policy with a pavement of some additional premium from the point of view of the

customers. According to the study nearly 18 % of the respondents think that it is

the most important criteria before selecting an insurance policy, while on the

other hand 4% of the respondent feels that it is the least important criteria.

BONUS AND INTEREST PAID:


Percent

Cumulative

Percent

1

2

3

4

5

30

5

7

11

9

30.0

5.0

7.0

11.0

9.0

39.0

6.5

9.1

14.3

11.7

39.0

45.5

54.5

68.8

80.5


52/92

6

7

8

Total

Missing System

Total

13

1

1

77

23

100

13.0

1.0

1.0

77.0

23.0

100.0

16.9

1.3

1.3

100.0

97.4

98.7

100.0

Bonus and Interest

0

10

20

30

40

1 2 3 4 5 6 7 8

Bonus and interest are paid by the company to the policy holder for the policies

which are with profit policy i.e. if a person takes profit policy, he/she also

becomes liable to get a certain percentage of the profit that the company makes in

a certain financial year. 39% of the respondent considers it as the most important

criteria before taking a life insurance policy.

SERVICES (PRE AND POST SALES):


Percent

Cumulative

Percent

1 19 19.0 24.7 24.7


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2

3

4

5

6

7

8

Total

Missing System

Total

4

10

6

15

12

5

6

77

23

100

4.0

10.0

6.0

15.0

12.0

5.0

6.0

77.0

23.0

100.0

5.2

13.0

7.8

19.5

15.6

6.5

7.8

100.0

29.9

42.9

50.6

70.1

85.7

92.2

100.0

Services

0

5

10

15

20

1 2 3 4 5 6 7 8

While conducting the study we have met many respondent who thinks that many

of the companies provide them satisfactory services only till the policy is being

taken by the respondent, but after that if there is any requirement from the point of

view of the customer, the company does not pay the same attention to them as

they had paid earlier. So, nearly 25% of the respondents feel that services (both


54/92

pre and post sales) provided by the company is the most important thing to

consider before taking any kind of life insurance policy.

ACCESSIBILITY:


Percent

Cumulative

Percent

1

2

3

4

5

6

7

8

Total

Missing System

Total

9

6

10

8

13

17

7

7

77

23

100

9.0

6.0

10.0

8.0

13.0

17.0

7.0

7.0

77.0

23.0

100.0

11.7

7.8

13.0

10.4

16.9

22.1

9.1

9.1

100.0

11.7

19.5

32.5

42.9

59.7

81.8

90.9

100.0


55/92

Accessibility

0

5

10

15

20

1 2 3 4 5 6 7 8

The term accessibility here refers to the easy availability of the facilities that the

company provides to its customers. The facilities can be regarding information

about the company and the various products offered by them, which can be made

available through internet. According to the study nearly 12% of the respondents

think that it is the most important thing, while 9% of them feel that it is the least

important thing that one may consider before taking any life insurance policy.

BRAND IMAGE:


Percent

Cumulative

Percent

1

2

3

4

5

6

7

25

10

5

9

2

9

10

25.0

10.0

5.0

9.0

2.0

9.0

10.0

32.5

13.0

6.5

11.7

2.6

11.7

13.0

32.5

45.5

51.9

63.6

66.2

77.9

90.9


56/92

8

Total

Missing System

Total

7

77

23

100

7.0

77.0

23.0

100.0

9.1

100.0

100.0

Brand image

0

51015

2025

30

1 2 3 4 5 6 7 8

Brand image plays a very important role in influencing the decision of a

prospective customer while taking the final decision. From the study it has been

found out that nearly 33% of the people feel that it is the most important thing that

influences ones decision regarding taking of life insurance policy, while for 9%

of the people it does not provide any significant importance in their decision

making.

So, to conclude from the above representations, it can be said that the premium

that the policy holder has to pay for taking any life insurance policy, plays the

most important role in influencing their decision, followed by the factors like

bonus and interest paid by the company, company image and so on. So, thosecompanies who are charging the least premium as well as providing all other

complementary services, has a better chance of succeeding in the life insurance

sector in comparison to other companies who are also operating in the same field.


57/92

Now to further analyze the perception of the respondents about what they think as

the most important criteria before taking an insurance policy. I have taken two

independent parameters, namely:

a) Age of the people

b) Annual income of the people

After taking these two independent parameters, the analysis is being made to see

which age group people think what criteria is important or what is the difference

in perception among the people who have annual income which are significantly

different from each other. The number of respondents taken here is 77(76 in case

of annual income, as one of the respondents did not disclose his income) only asthose people who are not having any life insurance policy has been excluded from

the purview of the study.

AGE OF PEOPLE-CRITERIA BEFORE TAKING LIFE

INSURANCE POLICY:

For conducting the study the ages of respondents are divided into five categories,

those are as follows:

i. Less than 30 years.

ii. Between 31-40 years.

iii. Between 41-50 years.

iv. Between 50-60 years.

v. More than 60 years.


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Now, lets us observe the different perception of people belonging to different age

groups about what they consider is the most important criteria, which affect their

decision before taking a life insurance policy.

Age Group Premium:

Age

group

Total 1 2 3 4 5 6 7 8

60yrs

1

(100%)

- - - - 1

(100%)

- - -

Total 77

(100%)

42

(54.5%)

6

(7.8%)

6

(7.8%)

6

(7.8%)

11

(14.3%)

5

(6.5%)

1

(1.3%)

-

Now, from above representation we can see that nearly 67% of the people who

belong to the age group of less than 30 consider premium as the most important

criteria in comparison to only 50% of the people who belong to an age group of

30-40. So people who have started their professional life consider more about the


59/92

money that have to spend on the insurance policy in comparison to the people

who are working for a relatively longer period of time. Again, if we consider

those people who have come to end of their working life, we can see that those

people also think that the expense regarding the premium to be paid is the most

important criteria for them.

Age Group - Charges:

Age

group

Total 1 2 3 4 5 6 7

60yrs

1

(100%)

- - - - 1

(100%)

- -

Total 77

(100%)

6

(7.8%)

7

(9.1%)

17

(22.1%)

20

(26%)

12

(15.6%)

9

(11.7%)

3

(3.9%)

Now, we consider the different charges (like fund management charges,

administration charges etc.) that the companies take from their policy holders, we


60/92

see that people who are having age less than 30 years and those who belong to the

group of 30-40 years think in the same way in this matter. They consider these

charges important, but not as much as they consider the cost relating to the

premium they have to pay to the company.

Age Group- Policy Term:

Age

group

Total 1 2 3 4 5 6 7 8

60yrs

1

(100%)

- - - - - 1

(100%)

- -

Total 77

(100%)

17

(22.4%)

9

(11.8%)

8

(10.5%)

17

(22.4%)

14

(18.4%)

5

(6.6%)

2

(2.6%)

4

(5.3%)

The policy term depends on the wishes of the policy holder, so here we see that

only 19% of the people whose age is below 30 years, think this is an important

criteria, but people who are little bit more experienced know that insurer


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companies sometime provide extra benefits for longer policies in comparison to

policies which have a shorter span of life, thats why nearly 36% of people

belonging to the age group of 31-40 years think that it is a very important criteria

which affects the decision regarding insurance.

Age Group- Rider Benefits:

Age

group

Total 1 2 3 4 5 6 7 8

60yrs

1 - - - 1 - - - -


62/92

(100%) (100%)

Total 77

(100%)

14

(18.2%)

5

(6.5%)

13

(16.9%)

12

(15.6%)

15

(19.5%)

12

(15.6%)

3

(3.9%)

3

(3.9%)

Out of 14 respondents who think that rider benefit is the most important criteria in

taking decision regarding life insurance policy, 7 belong to the age group less than

30 and 5 belong to the age group of 30-40. So, most of them think that rider

benefits are not so important and it does not influence their decision in a broad

way.

Age Group- Bonus and interest paid:

Age

group

Total 1 2 3 4 5 6 7 8


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>60yrs

1

(100%)

- - - 1

(100%)

- - - -

Total 77

(100%)

30

(39%)

5

(6.5%)

7

(9.1%)

11

(14.3%)

9

(11.7%)

13

(16.9%)

1

(1.3%)

1

(1.3%)

In this scenario we can see that the thinking of the people belonging to different

age group is quiet similar, as nearly 40% of the respondents belonging to three

different age groups, namely:


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65/92

(100%) (33.3%) (33.3%) (33.3%

>60

yrs

1

(100%)

- - 1

(100%)

- - - - -

Total 77

(100%)

9

(11.7%)

6

(7.8%)

10

(13%)

8

(10.4%)

13

(16.9%)

17

(22.1%)

7

(9.1%)

7

(9.1%

Here, we can see that not much importance is given to the accessibility criteria by

respondents of any group. Most of them consider accessibility as criteria, which

will not affect the decision of a prospective customer, which he/she decides to

take as a life insurance policy.

Age Group-Company Image:


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In the case of company image also, we see a significant difference between the

opinions of respondents who belong to different age groups. Only 24% of people

belonging to the age group of less than 30years think that it is very important and

almost 14% think that it is not at all important. On the other hand, nearly 46% of

the people belonging to the age group of 30-40 years think it as an important

criterion and 4% think that this criterion is not at all important. People belonging

to the age group of more than 60 years also consider companys image as the

most important criteria.

Age

group

Total 1 2 3 4 5 6 7 8

60yrs

1

(100%)

1

(100%)

- - - - - - -

Total 77

(100%)

25

(32.5%)

10

(13%)

5

(6.5%)

9

(11.7%)

2

(2.6%)

9

(11.7%)

10

(13%)

7

(7.1%)


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So, to conclude it can be said that the thinking of people belonging to different

age group are quiet different in most of the aspect when it comes to decide the

important criteria regarding life insurance, it may be due to the fact that they have

started their carrier so they worry about the money they have to spend on

insurance or it may be related to the fact that for many of the new comers it is the

first time that they are taking a life insurance policy on their own, so they do not

have experience. When it comes to life insurance in comparison to others who are

having their own policy or those who are working for a longer span of time and

are quite settled in their respective area of operation.

ANNUAL INCOME OF PEOPLE- CRITERIA BEFORE

TAKING LIFE INSURANCE POLICY:

For conducting the study the annual income of respondent is divided into four

categories, those are as follows:

i. Less than Rs.1lakh

ii. Between Rs.1.01-3lakh

iii. Between Rs.3.01-5lakh

iv. More than Rs.5lakh

Now, let us see the perception of people about the important criterias before

taking a life insurance policy who belong to different income groups.

Annual Income - Premium:


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Annual

income

(Rs.)

Total 1 2 3 4 5 6 7 8

reliance life insurance-simple saritha-0584

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