A PROJECT REPORT

ON

EMERGENCE OF MAX NEW YORK LIFE “

ONE OF THE BIGGEST PRIVATE LIFE
INSURANCE PLAYER”

A COMPARATIVE ANALYSIS WITH

OTHER MAJOR INSURANCE PLAYERS

Submitted as a part of curriculum in Masters of

Business Administration programme by INSTITUTE
OF MANAGEMENT SCIENCES UNIVERSITY OF
LUCKNOW
Academic Year 2008-2009

AMAR KUMAR GUPTA

MBA (RETAIL MANAGEMENT)

(INSTITUTE OF MANAGEMENT SCIENCES

UNIVERSITY OF LUCKNOW,LUCKNOW)

1
 CONTENTS

Chapter 1: EXECUTIVE SUMMARY 6

Chapter 2: INSURANCE – AN INTRODUCTION 7
Chapter 3: INDUSTRY PROFILE 18
3.1 ORIGIN OF INSURANCE
3.2 ORIGIN OF LIFE ASSURANCE IN INDIA
3.3 INSURANCE SECTOR REFORMS
3.4 POTENTIALITY OF INSURANCE IN INDIAN MARKET
Chapter 4: LIFE INSURANCE PRODUCTS 29
4.1: WHOLE LIFE POLICY
4.2: ENDOWMENT POLICY
4.3: MONEY BACK POLICY
4.4: TERM POLICY
4.5: ANNUITY
4.6: JOINT LIFE POLICY
4.7: GROUP INSURANCE
Chapter 5: IRDA ACT 1999 36
5.1: DUTIES, POWERS, FUNCTIONS
Chapter 6: PLAYERS IN INDIAN INSURANCE INDUSTRY 39
6.1: LIFE INSURERS
6.2: GENERAL INSURERS
6.3: INSURANEC BUSINESS
Chapter 7: COMPANY PROFILE 43
7.1: ABOUT ICICI PRUDENTIAL
7.2: PRODUCTS
7.3: ABOUR THE PARTNERS
7.4: INSURANCE PLANS

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Chapter 8: MARKETING RESERCH 58
Chapter 9: CONCLUSION 88
Chapter 10: RECOMMENDATION 90
Chapter 11: BIBLIOGRAPHY 92

Chapter 12: ANNEXURE 93

QUESTIONNAIRE

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 ACKNOWLEDGEMENT
There is always a sense of gratitude which one express to other for the helpful so

needy services they render during all phases of life. I would like to express my

gratitude towards all those who have been helpful to me in getting this mighty

task of training to a successful end.

First of all, I consider it a pleasant duty to express my heart felt appreciation

, gratitude and indebtedness to Mr. Abhishek Gupta (Manager- Agency

Recruitment) & Mr.Sumit Narang(Sales Manager) for his keen interest,

invaluable pain taking & excellent guidance, patience, endurance,

encouragement & thoughtful advice throughout the project work duration.

I would also like to be thankful to Mr. Kalhan Kaul (Branch Manager, MAX

NEW YORK LIFE INSURANCE, SHAHJAHANPUR), who has given me the right

way to prepare my project report.

I am also thankful to all my friends who gave me constant & continuous

inspiration to complete this project.

(AMAR KUMAR GUPTA)

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 PREFACE

Insurance market is growing very fast. The opportunity is also high in this sector
as only 5% of Indian market is covered by this sector and the players are trying to
extend in to the rest untapped 95%.

Though LIC in India is the market leader, relatively younger private organization
are also doing well in this sector. This is the pick time for all the players to
capitalize this growth and increase their market share through good distribution
channel network. MAX NEW YORK is one of the major Life insurance player. who
is emerging a market leader among private insurance group.

The success story of good market share of different organization depends on the
distribution channel network of the organization. The distribution channel network
is the interface between the producer or service provider and user. Hence it
should be highly effective to create a good brand perception on its user.

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 Chapter - 1

EXECUTIVE SUMMARY

The Indian Insurance Industry is broadly segmented into public and private
insurance companies. Before year 2000, only public sector insurance companies
were allowed to do business in India. But after year 2000, insurance sector was
thrown open for private insurance companies as well.

But as of now there now around 19 private life insurance companies and around
9 private non-life insurance companies doing business in India.

This report is prepared with an aim to provide an overview of present Indian

Insurance Industry. Also with LIC, heading the public life insurance companies
and MAX NEW YORK LIFE heading the private life insurance players, this report
also provides a comparative analysis of Life policies.

Based on this report , the prospecting insurance customers would get help in
choosing the right insurance products for themselves.

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 Chapter - 2

INSURANCE – AN INTRODUCTION

Insurance may be described as a social device to ensure protection of economic

value of life and other assets. Under the plan of insurance, a large number of
people associate themselves by sharing risks attached to individuals. The risks,
which can be insured against, include fire, the perils of sea, death and accidents
and burglary. Any risk contingent upon these, may be insured against at a
premium commensurate with the risk involved. Thus collective bearing of risk is
insurance.

Insurance is a contract whereby, in return for the payment of premium by the

insured, the insurers pay the financial losses suffered by the insured as a result of
the occurrence of unforeseen events. The term "risk" is used to describe the
possibility of adverse results flowing from any occurrence or the accidental
happenings, which produce a monetary loss.

Insurance is a pool in which a large number of people exposed to a similar risk

make contributions to a common fund out of which the losses suffered by the
unfortunate few, due to accidental events, are made good. The sharing of risk
among large groups of people is the basis of insurance. The losses of an
individual are distributed over a group of individuals.

Definitions:

General definition:

In the words of John Magee, “Insurance is a plan by themselves which

large number of people associate and transfer to the shoulders of all,
risks that attach to individuals.”

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Fundamental definition:

In the words of D.S. Hansell, “Insurance accumulated contributions of all parties

participating in the scheme.”

Contractual definition: In the words of justice Tindall, “ Insurance is a contract in

which a sum of money is paid to the assured as consideration of insurer’s
incurring the risk of paying a large sum upon a given contingency.”

Characteristics of insurance

• Sharing of risks

• Cooperative device

• Evaluation of risk

• Payment on happening of a special event

• The amount of payment depends on the nature of losses incurred.

• The success of insurance business depends on the large number of people

insured against similar risk.

• Insurance is a plan, which spreads the risk and losses of few people among a
large number of people.

• The insurance is a plan in which the insured transfers his risk on the insurer.

• Insurance is a legal contract which is based upon certain principles of

insurance which includes, utmost good faith, insurable interest, contribution,
indemnity, causas proxima, subrogation, etc.

• The scope of insurance is much wider and extensive.

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Functions of insurance:

Primary functions:

1. Provide protection:- Insurance cannot check the happening of the risk, but can
provide for the losses of risk.

2. Collective bearing of risk: - Insurance is a device to share the financial losses

of few among many others.

3. Assessment of risk: - Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk.

4. Provide certainty: - Insurance is a device, which helps to change from

uncertainty to certainty.

Secondary functions:

1. Prevention of losses: - Insurance cautions businessman and individuals to

adopt suitable device to prevent unfortunate consequences of risk by
observing safety instructions.

2. Small capital to cover large risks: - Insurance relives the businessman from
security investment, by paying small amount of insurance against larger risks
and uncertainty.

3. Contributes towards development of larger industries.

Other Function:

Means of savings and investment:

Insurance companies are business houses. The product they sell is financial
protection. To succeed and survive, they must cover their costs, which

9
include payments to cover the losses of policyholders, as well as sales and
administrative expenses, taxes and dividends.

Insurance companies have two sources of income for covering these costs:
premiums and investment income. The premiums are collected on a regular
basis and invested in Government Bonds, Gilt, stocks, mutual funds, real estates
and other conservative avenues. However, investment income depends on
market conditions, interest rates, economy etc. and varies from year to year.
Because of the uncertainty associated with the investment income, insurance
companies must generate enough income from premiums to cover the bulk of
their expenses.

The risk becomes insurable if the following requirements are complied with:

• The insured must suffer financial loss if the risk operates.

• The loss must be measurable in money,

• The object of the insurance contract must be legal.

• The insurer should have sufficient knowledge about the risks he accepts.

Fundamentals of Insurance

The fundamental Principles of the Insurance are as follows:

• Insurable Interest: Insurable interest means the legal right to insure.

Insurable Interest is a must and only then the insurance contract is
enforceable at law. This principle differentiates a Contract of insurance from
wager. Lack of insurable interest renders the contract null and void. For
Insurable Interest to exist there must be Property, Rights, Interest, Life or

10
• Liability; this must be insured and the Insured should have a legally
recognizable relationship thereto. The Insured should be benefited by the
safety of the property or is prejudiced by its loss. Insurable Interest may arise
in the following manner:

1. Ownership: Absolute ownership entitles the owner to insure the property.

This is the commonest method whereby Insurable Interest arises.

2. Partial Interest is also insurable e.g. a mortgagee. A creditor can also

insure the life of his debtor but only to the extent of his loan.

3. Administrators and executors i.e. officials appointed by a court of law to

take care of a property may also insure the property.

4. Relationship does not automatically constitute insurable interest. The only

relationship recognized by law for this purpose is the one between a husband
and wife.

5. An employer can insure his employee under a Personal Accident Policy as

he has insurable interest in them.

• Proximate cause: Generally, the claims are payable under insurance policies
if they arise out of events which are proximately caused by the insured perils.
In other words, the proximate cause of the event has to be peril covered by the
policy, so as to constitute a valid claim.

• Contribution: An insured may have several insurance on the same subject

matter. If he recovers his loss under all these insurance, he will obviously
make a profit out of loss. This will be an infringement of the principle of
indemnity. Common Law has, therefore, evolved the doctrine of contribution
whereby the insured is prevented from recovering more than his loss, despite
his having several insurance on the subject matter.

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• Subrogation: The principle of indemnity seeks to prevent the insured from
making profit out of loss. However, it may so happen that that the insured may
recover his loss under his policy and he may also have rights against third
parties. If, after the insurance claim is settled, the insured is allowed to enforce
his rights against third parties and to retain whatever damages he receives
from them, he will certainly make a profit and the principle of indemnity will be
infringed.

Common Law has therefore, evolved the doctrine of subrogation as corollary

to the principle of indemnity. Subrogation may be defined as the transfer of
rights and remedies of the insured to the insurers who have indemnified the
insured in respect of the loss. The Common Law right of subrogation is implied
an all contracts on indemnity, as it arises only after payment of loss.

• Utmost Good Faith: In all General Insurance contracts we know that a

property or interest or liability or life is offered for insurance and the insured
has to take decisions on the acceptance of the proposal. If he decides to
accept the proposal a premium commensurate with the risk has to be charged.
To enable him to take necessary decision in this regard, the insurer must have
certain facts about the risk offered. These facts influence the judgment of the
insurer in deciding about the acceptance or otherwise of the risk and the rate
of premium to be charged, if accepted. Such facts are known as material facts.

Nature of Insurance Contracts

When the insured pays the premium and the insurers accept the risks, the
contract of insurance is concluded. The policy issued by the insurers is the
evidence of the contract. The contract of insurance, like any other contract, for

12
example a contract for the sale of goods, is subject to the general law of contract
as embodied in the Indian Contract Act,1872.

According to this Act, a contract must have certain essential features in order to
make it legally valid and enforceable. The following are the essential elements:

a) Offer and acceptance: Usually, the offer is made by the proposer, and
acceptance made by the insurer.

b) Consideration: This means that the contract must involve some mutual benefit
to the parties. The premium is the consideration from the insured and the promise
to indemnity is the consideration from the insurers.

c) Agreement between the parties: Both the parties should agree to the same
thing in the same sense.

d) Capacity of the parties: Both the parties to the contract must legally competent
to enter into the contract. For example, minors cannot enter into insurance
contracts.

e) Legality: The object of the contract must be legal and the contract should not
violate any legal requirements. E.g. no insurance can be had for smuggled goods.

Risk

Reasonable or not, risks are inescapable in business. Every business venture is

something of a gamble, because the possibility of loss is as real as the prospects
for profits. And even though managers do everything possible to ensure that their
business succeeds, they cannot guard against every conceivable form of risk.

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Pure Risk versus Speculative Risk

• Pure Risk: Events representing the kind of risk that no business can predict or
escape, known as Pure Risk, it is the threat of a loss without the possibility of
gain. In other words, a disaster such as avalanche or fire is costly for the
business it strikes, but the fact that no disaster occurs contributes nothing to a
firm's profit.

• Speculative Risk: It is the type of risk that offers the prospect of making profit -
and prompts people to go into business in the first place. Every business
accepts the possibility of losing money in order to make money.

Approaches to Risk Management

Risk Management is the process of reducing the threat of loss due to

uncontrollable events. Steps in selecting a risk management approach:

• To identify all the things those can possibly go wrong. ·

• To consider the probability that an event will occur.

Techniques of Risk Management are:

1. Avoiding the Risk: When a company avoids risk, it eliminates the possibility that
a particular event will occur. To avoid the possibility of a suit, for example, not to
produce any products -which would, of course, eliminate both the threats of a
lawsuit and the opportunity to profit. With rare exceptions, avoiding risk entirely is
extremely difficult.

2. Reducing Risk: A more practical approach is to reduce the risk by taking

precautions. Risk reduction is an important element in most companies' approach
to risk management. Typical precautions include putting safety locks on doors to
prevent robberies, installing overhead sprinklers to minimize fire damage, and
periodic checking motor vehicles to prevent accidents.

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3. Assuming risk: Many companies draw on current revenues or set aside a
"Contingency Fund" to cover unexpected losses. Setting aside money on regular
basis could be cheaper than purchasing insurance. Moreover, the company can
earn interest on the reserved cash. Such assumption of risk is also called self-
insurance or risk retention.

4. Transferring the risk: Most companies still rely on outside insurance firms for
financial protection against catastrophic losses. In buying insurance, companies
transfer the risk of loss to an insurance firm, which agrees to pay for certain types
of losses. In exchange, the insurance firm collects a fee known as a premium.

Insurable and Uninsurable Risks:

Insurable risks: An insurable risk - one that an insurable company will cover -
Generally meets the following requirements. The peril insured against must not be
under the control of the Insured. This means, of course that insurer do not pay for
losses that are intentionally caused by an insured, caused at the Insured's
direction, or caused with the insured's collusion. For example, a fire insurance
policy excludes loss caused by the Insured’s own arson. It does, however, include
loss caused by an employee's arson. Losses must be calculable, and the cost of
insuring must be economically feasible. To operate profitably, insurance
companies must have data on the frequency of losses caused by a given peril. If
this information covers a long period of time and is based on a large number of
cases, Insurance companies can usually predict quite accurately how many
losses will occur in the future. For example, the insurance companies to fix up the
rate of premium of Personal Accident Insurance may use the information of the
number of people who will die each year in India in accidents. The peril must be
unlikely to affect all insured simultaneously. Unless an insurance company
spreads its coverage over large geographic areas or a broad population base or
different classes of Insurance, a single disaster might force it to pay out all its

15
policies at once. The possible loss must be financially serious to the Insured. An
Insurance company could not afford the paperwork involved in handling numerous
small claims of a few Rupees each. As a result, many policies have a clause
specifying that the insurance company will pay only that part of a loss greater than
an amount - the deductible or excess - stated in the policy. The excess represents
small losses that the Insured has to absorb.

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 Chapter – 3

INDUSTRY PROFILE

3.1 Origin of Life Insurance

Life Assurance was born in England when the first policy providing temporary
cover for a period of 12 months was issued as easy as 1583 A.D. The Amicable
Society started granting fluctuating sum on death since 1705 and a fix sum since
1757, With the development of mortality tables, the life Assurance acquired a
scientific character. The Equitable Society founded in 1762 was the first Society
established on scientific basis.

3.2 ORIGIN OF LIFE ASSURANCE IN INDIA

In India, after failure of two British companies, the European and the Albert in
1870, which attempted writing business on Indian lives, first Indian Life Assurance
Society was formed in the same year called Bombay Mutual Assurance Society
Ltd. It was followed by the Oriental Life Assurance Company Limited in 1874,
Bharat in 1896 and Empire of India in 1897. The Idea of insurance was born out
of a desire of the people to share loss of an individual by many. Originally it
restricted to forms other than life assurance. It started with Marine Insurance,
where the losses on account of perils of sea were shared by all who were
engaged in trade. Reference to some forms of insurance, is found in the codes of
Hammurabi, Manu (Manav Dharma Shastra). The word `Yogakshema’ is used in
the Rig Veda suggesting that some form of community insurance was practiced
by the Aryans in India over 3000 years ago. In India during Buddhist period burial
societies existed which were mutual in their character and used to help a family
by building a house, protecting the widow, marrying the girls.

17
The Swadeshi Movement of 1905 provided impetus to the formation of several
companies such as the `Hindustan Cooperative’, the `United India’, the `Bombay
Life’, the `National’. Further in the wake of freedom movement number of
companies such as the `New India’, the `Jupiter’ the `Lakshmi’ emerged.

The Government began to exercise a certain measure of control on Insurance

business by passing the `Insurance Act’ in 1912. For controlling investment of
funds, expenditure and management, a comprehensive Act was passed known as
`The Insurance Act 1938’. For controlling the affairs, the office of Controller of
Insurance was established. The act was extensively amended in 1950.

In the year 1955, approximately 170 Insurance Offices and 80 Provident Fund
Societies had been registered for transacting Life Assurance business in India.
There were, however, no full guarantees to the policyholders. The concept of
trusteeship was lacking. Many insurance companies went into liquidation. There
were malpractices in insurance business. For achieving the following purposes it
was felt necessary to nationalize the insurance business in India. To provide
security to the policyholders

(i) To utilize the funds for nation-building activities.

(ii) To avoid cut throat competition

(iii) To abolish mal-practices

(iv) To spread the insurance message to the rural areas.

The first step in this direction was taken by the Government of India by issuing the
Life Insurance (the Emergency provisions) Ordinance, 1956 on 19th January,
1956. The then Finance Minister, Shri C. D. Deshmukh mentioned the purpose of
nationalisation as reaching the goal of socialistic pattern of society, rendering
genuine service to the people in the rural area. The Life Insurance

18
Corporation Act (Act XXXI of 1956) was passed by the Parliament in June 1956
which came in force on 1st July 1956. The Life Insurance Corporation of India
came into existence on 1st September 1956.

3.3 INSURANCE SECTOR REFORMS

Having looked at the insurance sector, let us look at the efforts made by the
government to make the industry more dynamic and customer friendly. To begin
with, the Malhotra committee was set up with the objective of suggesting changes
that would achieve the much required dynamism.

The Malhotra Committee Report

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI

Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry
and recommend its future direction. In 1994, the committee submitted the report
and gave the following recommendations:

Structure

• Government stake in the insurance Companies to be brought down to 50%

• Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent-corporations

• All the insurance companies should be given greater freedom to operate

Market Regulations:

• Private Companies with a minimum paid up capital of Rs.1bn should be

allowed to enter the industry

• No Company should deal in both Life and General Insurance through a single
entity

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• Foreign companies may be allowed to enter the industry in collaboration with
the domestic companies

• Postal Life Insurance should be allowed to operate in the rural market

• Only one State Level Life Insurance Company should be allowed to operate in
each state

Regulatory Body

• The Insurance Act should be changed

• An Insurance Regulatory body should be set up

• Controller of Insurance (Currently a part from the Finance Ministry) should be

made independent

Investments

• Mandatory Investments of LIC Life Fund in government securities to be

reduced from 75% to 50%

• GIC and its subsidiaries are not to hold more than 5% in any company (There
current holdings to be brought down to this level over a period of time)

Customer Service

• LIC should pay interest on delays in payments beyond 30 days

• Insurance companies must be encouraged to set up unit linked pension plans

• Computerization of operations and updating of technology to be carried out in

the insurance industry

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Overall, the committee strongly felt that in order to improve the customer services
and increase the coverage of the insurance industry should be opened up to
competition.

But at the same time, the committee felt the need to exercise caution as any
failure on the part of new players could ruin the public confidence in the industry.

Hence, it was decided to allow competition in a limited way by stipulating the

minimum capital requirement of Rs.1 bn. This amount is not very high for foreign
firms, as it translates to only about US$25 million. Further, to date it is unclear

whether equity should be payable in one go or should be brought in as

installments. Also, the foreign equity participation was to be restricted to only
40%.

The committee felt the need to provide greater autonomy to insurance companies
in order to improve their performance and enable them to act as independent
companies with economic motives. For this purpose, it had proposed setting up
an independent regulatory body.

The industry and analysts find that there is lack of clarity in the following areas:-

• Though coverage of rural areas was to be made compulsory, it raises the

question as to who would subsidies the rural policies as they would be difficult
to service and hence costs will go up.

• There is some confusion with respect to investments. Where should the funds
be invested? Currently 70% of the funds with LIC & GIC are invested in
Government securities. Would new entrants be allowed to invest in GOI
securities?

• The report also does not enumerate exit options available to the new entrants.
In the event of failure, there should be an arrangement made whereby the

21
 other Companies pool in to bail the customers, who in all probability would be
middle class individuals.

3.4 POTENTIALITY OF INSURANCE IN INDIAN MARKET

Marketing inefficiency of general insurers has kept society in dark even when so
many personal as well as commercial lines of insurance covers are available for
them. Insurers have failed to identify the need of the individual risk factors and
thereafter selecting proper market segments and developing demand of these
needs by adopting proper marketing mix. There is great scope of commercial line
of insurance as we are developing at a very fast rate but the potentiality and
scope of personal lines of insurance is vast as this areas is still under-tapped.
Product designing and pricing is also simple and growth of this portfolio is
guaranteed in this country which has a base of over 100 crore population, where
there are about 25 crore dwellings, 20 crore schools, colleges and educational
institutions and about 5 crore small and big shops. But despite this the Indian
insurers share in personal line of business is very low or negligible.

There are enormous growth opportunities to Indian as well as foreign insurers

because of such a huge base of population there is ample scope to introduce the
new line of covers as per the changing needs and to increase the per capita share
of the insurance by encouraging risk transfer by investing small portion of the
savings of the individuals.

By opening up the sector far more opportunities has came up in insurance and
reinsurance market. After privatization of this sector presence of the foreign
players has also increased. Therefore the insurers, in time to come, will have to
change their attitude from selling of the product to marketing of the protection
needs of the insured and for this what is required is:

• Effective product planning

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• Suitable pricing

• Efficient promotion and physical distribution.

• Proper physical evidence.

• Good and well trained sales force.

Your Plans, Your Dreams & Their Future:

The Essence of Life Insurance

Your family counts on you every day for financial support: food, shelter,
transportation, education, and much more. You and your spouse have plans for
your future and dreams for your family: another child, a bigger home, a new
business, college education, travel, retirement… Life insurance is all about
making sure your family has adequate financial resources to make those plans
and dreams come true, if you were to die prematurely. And just as your spouse
and children (as beneficiaries) count on you, you count on your spouse. That's
why coverage for your spouse is also important. If he or she were to die
unexpectedly, you would feel similar financial strains. This is especially true today,
with so many "double income" families.

When Should Someone Invest?

The answer, of course, is right now! Since no one can tell when the best time to
invest is, it is whenever you have the money! One should first invest in any plans
for which tax-deductible contributions can be made because these types of
savings reduce current taxes. Then, any more surplus funds should be invested in
a variable annuity, especially in equities so as to get the maximum growth of the
capital.

Insurance as a Safety Net

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The function of insurance is to protect you against losses you can't afford. This is
done by transferring the risks of a person, business, or organization -- the
"insured" -- to an insurance company, or "insurer." The insurer then reimburses
the insured for "covered" losses -- i.e., those losses it pays for under the policy's
terms.
As the insurance consumer, you pay an amount of money, called a premium, to
the insurer to transfer the risk. The insurer pools all its premiums into a large fund,
and when a policyholder has a loss, the insurer draws funds from the pool to pay
for the loss. Life is full of unexpected events that can create large financial losses.
For example, whenever you drive, it is possible that you may have a costly
accident. Risks affect you by causing worry about potential loss and how to deal
with the consequences. Insurance reduces anxiety over a possible loss and
absorbs the financial brunt of its consequences. However, while insurance
coverage is essential, how much and what type of insurance people need differ
with each individual. You must decide how much risk you're willing to tolerate
without insurance. For example, benefits for disability policies typically begin after
a waiting period of one to six months. Therefore, you should ensure that you have
some form of coverage or financial resources before the policy period begin.

Where Can I Get Insurance?

Since insurance can be expensive, it makes sense to get more than one price
quote for coverage. At one time, we in India had no option but the nationalized
insurance companies like LIC, GIC, etc. Now several private players, often with
foreign tie-ups, are entering the fray. There are now several companies selling
any one type of insurance, each with its own price structures, coverage, and
policy exclusions. To help consumers choose among the various types of
coverage’s, companies train sales representatives in the technical points of their

24
insurance products. Many representatives work for just one insurance company.
There are also brokers and independent agents -- self-employed business people
who sell insurance on commission for several insurers -- who claim they can
comparison shop to get the best coverage’s for consumers. Certain banks also
sell insurance.

What Type of Insurance Agent Should I Trust?

With multiple players in the life insurance field now, a choice should be first made
regarding the insurance company before choosing an agent. To determine a
company's willingness to pay claims, ask a policyholder who has filed several
claims. Obviously, the more claims an insurer has handled with no complaints, the
more likely that the company will provide you with good service. Barring LIC, the
remaining players in life insurance are still new in the field, so this kind of
information will not be available for another few years at the least. It remains to be
seen how the newer players will perform on the claims front, but given the
regulatory framework and their strong parentage, their performance should be
comparable, if not better than LIC.

It is quite imperative that your insurance agent be competent and professional

enough to clearly understand your insurance requirements and suggest a

suitable scheme. Also, with insurance companies offering varying rate of

commissions on different schemes, there is a likelihood that a 'not-so-
professional' agent may be tempted to recommend a scheme which pays him a
higher commission, though it may not be very suitable for your needs. This is
especially so in the case of LIC, sole provider of life insurance in our country till
recently, where the eligibility criteria are not very rigorous and very often the level
of knowledge and competence of the agents leaves a lot to be desired. The new
players seem to be much more stringent in appointing agents and more
committed in providing training to them. In today's context, especially in case of

25
LIC, it may be advisable to go in for an agent who comes recommended from one
of your friends, relatives or associates. Further, the agent should be able to
provide you with a comparison of multiple schemes and also explain them in
simple terms, so that you are are able to make an informed decision. In case an
agent is not inclined to spend the time and resources to provide you with relevant
information and solve your queries, it may be better to give a go-by to such a
person and start looking for a new agent. The market is becoming increasingly
competitive and it should not be a difficult task to find a good agent.

Life Insurance Players:

• Bajaj Allianz General Insurance: Bajaj Allianz General Insurance Company

Limited is a joint venture between Bajaj Auto Limited and Allianz AG of
Germany. Both enjoy a reputation of expertise, stability and strength.

• Birla Sun Life Insurance: The Aditya Birla Group contributes its knowledge of
the Indian market while Sun Life Financial contributes global expertise in the
areas of protection and wealth management.

• HDFC Standard Life Insurance: HDFC and Standard Life have a long and
close relationship built upon shared values and trust. Providing long term
financial security to policy holders will be the constant endeavor.

• ICICI Prudential Life Insurance: The Company was granted Certificate of

Registration for carrying out Life Insurance business, by the Insurance
Regulatory and Development Authority.

• ING Vysya Life Insurance: ING, the world’s second largest life insurance
company together with Vysya Bank, one of India’s leading private sector
banks, forms ING Vysya Life Insurance.

26
• Life Insurance Corporation (LIC): Life Insurance Corporation (LIC) has been
one of the pioneering organizations in India who introduced use of Information
Technology in their business.

• MetLife India: The Metropolitan Life Insurance Company is the number one
insurer in the U.S. It is helping build financial independence for its customers.

• Oriental Insurance: The Oriental Insurance Company Ltd. (OICL) is one of the
leading General Insurance companies in India and is a subsidiary of the
General Insurance Corporation (GIC) of India.

• Royal Sundaram Alliance Insurance: Royal Sundaram marks the coming

together of Sundaram Finance, one of India’s most respected and trusted
finance companies, and Royal and Sun Alliance, one of the largest insurance
groups in the world.

• Tata AIG Insurance: Life insurance & general insurance for individuals &
corporates by Tata AIG. This site will guide you on how to capitalize on
opportunities and protect against uncertainties.

27
 Chapter – 4

LIFE INSURANCE PRODUCTS

4.1 WHOLE LIFE POLICY

These are low-cost insurance plans where the sum assured is payable on the
death of the insured

A typical whole life policy runs as long as the policyholder is alive. In other words,
the risk is covered for the entire life of the policyholder, which is why it is known
as whole life policies.

The policy money and the bonus are payable only to the nominee of the
beneficiary upon the death of the policyholder. The policyholder is not entitled to
any money during his or her own lifetime, i.e. there is no survival benefit.

Whole life policies are fairly rigid and inflexible and are suitable only in a few, very
specific cases.

Whole Life Policy can be a good initial policy to buy since its cost is very low. That
is an important consideration when one is just starting a career.

4.2 ENDOWMENT POLICY

Under these plans, the sum assured is pay-able on the maturity of the policy or in
case of death of the insured individual before maturity of the policy. Endowment
policies cover the risk for a specified period at the end of which the sum assured
is paid back to the policyholder along with the entire bonus accumulated during
the term of the policy. It is this feature - the payment of the endowment to the
policyholder upon the completion of the policy’s term -, which rightly accounts for
the popularity of endowment policies. The original sum assured and the
accumulated bonus - received back comes handy from the endowment can either
be used for buying an annuity policy to generate a

28
monthly pension for the whole life, or put it in any other suitable investment of his
choice. As compared to whole life policies, the premium rates for endowment
policies are higher and the bonus rates are lower. On the plus side, these polices
offer an endowment - representing a return on his premium payments payable to
him in his own lifetime when the policy comes to an end.

4.3 MONEY BACK POLICY

Unlike ordinary endowment insurance plans where the survival benefits are
payable only at the end of the endowment period, money back policies provide for
periodic payments of partial survival benefits during the term of the policy, of
course so long as the policy holder is alive.

An important feature of this type of policies is that in the event of death at any
time within the policy term, the death claim comprises full sum assured without
deducting any of the survival benefit amounts, which may have already been paid
as money-back components. Similarly, the bonus is also calculated on the full
sum assured

Under money back policies premiums can be paid as per the insurance
company’s policy. These could be quarterly, half yearly or annually. The
premiums for these policies are payable for the selected term of years, or till
death if it occurs earlier.

By buying such policies one can receive income at regular intervals other than the
risk cover it provides. Also a good amount of bonus on the full sum assured is
quite a good bargain Individual before expiry of the policy

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4.4 TERM POLICY:

Term policies; cover only the risk during the selected term period. If the
policyholder survives the term, the risk cover comes to an end.

A Term plan is designed to meet the needs of people who are initially unable to
pay the larger premium required for a whole life or an endowment assurance
policy, but they hope to be able to pay for such a policy in the near future.

No surrender, loan or paid-up values are granted under these policies because
reserves are not accumulated. If the premium is not paid with the days of grace,
the policy will lapse without acquiring a paid-up value.

However, a lapsed policy may be revived during the lifetime of the life assured but
before the expiry of the period of two years from the due date of the first unpaid
premium on the usual terms. Accident and / or Disability benefits are not granted
on policies under the Term plan.

4.5 ANNUITY (PENSION PLAN)

These plans provide for either immediate or deferred pension for life. The pension
payments are made till the death of the annuitant (per-son who has a pension
plan) unless the policy has provision of guaranteed period.

An annuity is an investment that one make, either in a single lump sum or through
installments paid over a certain number of years, in return for which one receive
back a specific sum every year, every half-year or every month, either for life or
for a fixed number of years.

After the death of the annuitant or after the fixed annuity period expires for annuity
payments, the invested annuity fund is refunded, perhaps along with a small
addition, calculated at that time.

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Annuities differ from all the other forms of life insurance discussed so far in one
fundamental way - an annuity does not provide any life insurance cover but,
instead, offers a guaranteed income either for life or a certain period.

Typically annuities are bought to generate income during one’s retired life, which
is why they are also called pension plans. Annuity premiums and payments are
fixed with reference to the duration of human life.

4.6 JOINT LIFE POLICY

Joint life policies are similar to endowment policies in as much as these policies
also offer maturity benefits to the policyholders, apart form covering the risks as
all life insurance policies.

But these are categorized separately as these cover two lives together thus
offering a unique advantage in some cases; notable, for a married couple or for
partners in a business firm.

Under a joint life policy the sum assured is payable on the first death and again on
the death of the survivor during the term of the policy. Vested bonuses would also
be paid besides the sum assured after the death of the survivor. If one or both the
lives survive to the maturity date, the sum assured as well as the vested bonuses
are payable on the maturity date.

The premiums payable cease on the first death or on the expiry of the selected
term, whichever is earlier.

Accident benefits equivalent to the sum assured are available under this plan on
the first death. However, if both lives are covered under Double Accident Benefit
(DAB), the surviving life is covered under DAB until the end of the policy year, in
which the first life dies under the cover of the policy.

31
These benefits are available with respect to both lives if

• Both lives perish simultaneously owing to an accident. To avoid such an

eventuality, nomination is allowed under the policy OR

• Both die within the specified period as a result of the same accident OR

The second life also dies in the same policy year as result of another accident. To
avoid such an eventuality, nomination is allowed under the policy.

Particularly for couples - Joint life policies provide dual-purpose income and risk
protection for both belonging to every income group and class of society.

Under a joint life plan though the premium payment stops after the first life's
death, bonuses continue to accrue on the basic Sum Assured till Maturity Date or
till the death of the second life, if earlier.

4.7 GROUP INSURANCE

Group Insurance offers life insurance protection under group policies to various
groups such as employer-employee, professionals, co-operatives, weaker
sections of society etc. It also provides insurance coverage to people under
certain approved occupations at the lowest possible premium cost. Besides
providing insurance coverage, it also offers group schemes to employers, which
provide funding of gratuity and pension liabilities of the employer’s Group
insurance plans have low premiums. Such plans are particularly beneficial to
those for whom other regular policies are a costlier proposition. Group insurance
plans extend cover to large segments of the population including those who
cannot afford individual insurance. As such the premia one need to pay is
comparatively lower and at the same time one can avail of insurance benefits.

32
The main features of the schemes are low premium and simple insurability
conditions. Premiums are based upon age combination of members, occupation
and working conditions of the group.

A number of group insurance schemes have been designed for various groups.
These include employer-employee groups, associations of professionals (such as
doctors, lawyers, chartered accountants etc.), and members of cooperative
banks, welfare funds, credit societies and weaker sections of society. Creditor-
Debtor groups are also offered group insurance schemes. Group insurance
schemes providing uniform cover can be granted to outstanding loans. These
groups are Members of primary housing societies where housing loans are
granted by State Apex housing societies, borrowers granted loans by Institutional
agencies in Public/Joint Sectors for housing purposes and borrower members of
cooperative societies/banks formed by employees of the same employers

4.8 SPECIAL PLAN

Special plans are insurance policy plans available from the national insurance
providers to serve the needs of citizens that cannot be commonly classified or
segregated. These special plans are designed to satisfy needs ranging from debt-
clearance in event of the death of the insured to financial aid in the event of a
medical mishap.

Special plans also provide financial assistance for handicapped dependants as

well as emergency surgery required if and when a medical condition arises. Since
special plans are designed for people with diverse and specific needs, the
average citizen may not necessarily need or use them. Yet, in the normal course
of life, situations may arise when one may need to provide for unplanned or
unexpected contingencies and mishaps.

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 Chapter –5

IRDA ACT 1999

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development
Authority (IRDA, which was constituted by an act of parliament) specify the
composition of Authority.

The Authority is a ten member team consisting of :

(a) a Chairman;

(b) five whole-time members;

(c) four part-time members,

(all appointed by the Government of India)

5.1 DUTIES, POWERS AND FUNCTIONS OF IRDA

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

(1) Subject to the provisions of this Act and any other law for the time being in
force, the Authority shall have the duty to regulate, promote and ensure
orderly growth of the insurance business and re-insurance business.

(2) Without prejudice to the generality of the provisions contained in sub-section

(1), the powers and functions of the Authority shall include –

(a) issue to the applicant a certificate of registration, renew, modify,

withdraw, suspend or cancel such registration;

(b) protection of the interests of the policy holders in matters

concerning assigning of policy, nomination by policy holders,
insurable interest, settlement of insurance claim, surrender

34
 value of policy and other terms and conditions of contracts of
insurance;

(c) Specifying requisite qualifications, code of conduct and practical

training for intermediary or insurance intermediaries and agents;

(d) Specifying the code of conduct for surveyors and loss

assessors;

(e) Promoting efficiency in the conduct of insurance business;

(f) Promoting and regulating professional organizations connected

with the insurance and re-insurance business;

(g) Levying fees and other charges for carrying out the purposes of
this Act;

(h) calling for information from, undertaking inspection of,

conducting enquiries and investigations including audit of the
insurers, intermediaries, insurance intermediaries and other
organizations connected with the insurance business;

(i) control and regulation of the rates, advantages, terms and

conditions that may be offered by insurers in respect of general
insurance business not so controlled and regulated by the Tariff
Advisory Committee under section 64U of the Insurance Act,
1938 (4 of 1938);

(j) Specifying the form and manner in which books of account shall
be maintained and statement of accounts shall be rendered by
insurers and other insurance intermediaries;

(k) Regulating investment of funds by insurance companies;

(l) Regulating maintenance of margin of solvency;

35
(m) Adjudication of disputes between insurers and intermediaries or
insurance intermediaries;

(n) Supervising the functioning of the Tariff Advisory Committee;

(o) specifying the percentage of premium income of the insurer to

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

(p) Specifying the percentage of life insurance business and

general insurance business to be undertaken by the insurer in
the rural or social sector; and

(q) Exercising such other powers as may be prescribed.

36
 Chapter – 6

PLAYERS IN INDIAN INSURANCE INDUSTRY

6.1 LIFE INSURERS

Insurance industry, as on 1.4.2000, comprised mainly two players: the state

insurers:

• Life Insurance Corporation of India (LIC)

6.2 GENERAL INSURERS:

• General Insurance Corporation of India (GIC) (with effect from Dec'2000, a

National Reinsure)

GIC had four subsidiary companies, namely ( with effect from Dec'2000, these
subsidaries have been de-linked from the parent company and made as
independent insurance companies.

1. The Oriental Insurance Company Limited

2. The New India Assurance Company Limited,

3. National Insurance Company Limited

4. United India Insurance Company Limited.

37
Yr: 2000-2007: Insurance Industry in the year 2000-2001 had 15 new entrants,
namely:

Life Insurers:

S.No. Name of the Company

1 Max New York Life Insurance Co. Ltd.

2 HDFC Standard Life Insurance Company Ltd.

3 ICICI Prudential Life Insurance Company Ltd.

4 Om Kotak Mahindra Life Insurance Co. Ltd.

5 Birla Sun Life Insurance Company Ltd.

6 Tata AIG Life Insurance Company Ltd.

7 SBI Life Insurance Company Limited

8 ING Vysya Life Insurance Company Private Limited

9 Allianz Bajaj Life Insurance Company Ltd.

10 Metlife India Insurance Company Pvt. Ltd.

11 Reliance Life Insurance Company Ltd.

12 Shriram Life Insurance Company Ltd.

13 Sahara India Life Insurance Company Ltd.

14 Bharti AXA Life Insurance Company Ltd.

15 Aviva Life Insurance Company Ltd.

38
General Insurers:

S.No. Name of the Company

1 Royal Sundaram Alliance Insurance Company Limited

2 Reliance General Insurance Company Limited.

3 IFFCO Tokio General Insurance Co. Ltd

4 TATA AIG General Insurance Company Ltd.

5 Bajaj Allianz General Insurance Company Limited

6 ICICI Lombard General Insurance Company Limited.

6.3 INSURANCE BUSINESS:

Insurance business is divided into four classes :

1) Life Insurance 2) Fire Insurance 3) Marine Insurance and 4) Miscellaneous

Insurance.

Life Insurers transact life insurance business; General Insurers transact the rest.

No composites are permitted as per law

Legislation (as on 1.4.2000):

Insurance is a federal subject in India. The primary legislation that deals with
insurance business in India is:

Insurance Act, 1938, and Insurance Regulatory & Development Authority Act,
1999.

39
Insurance Products (as on 1.4.2000) (for latest information get in touch with the
current insurers – website information of insurers is provided at the web page for
insurers):

Life Insurance:

Popular Products: Endowment Assurance (Participating) and Money Back

(Participating). More than 80% of the life insurance business is from these
products.

General Insurance:

Fire and Miscellaneous insurance businesses are predominant. Motor Vehicle

insurance is compulsory.

Tariff Advisory Committee (TAC) lays down tariff rates for some of the general
insurance products.

New products have been launched by life insurers. These include linked-products.
For details, please visit the websites of life insurers.

40
 Chapter – 7

COMPANY PROFILE
7.1 ABOUT MAX NEW YORK

Max New York Life Insurance Company Ltd . is a joint venture between New York
Life; a Fortune 100 company and Max India Limited; one of India's leading multi-
business corporations. The company has positioned Itself on the quality platform. In line
with its vision to be the Most Admired Life Insurance Company in India , it has
developed a strong corporate governance model based on the core values of excellence,
honesty, knowledge, caring, integrity and teamwork. The strategy is to establish itself
as a Trusted Life Insurance Specialist through a quality approach to business.

Incorporated in 2000, Max New York Life started commercial operation in 2001. In line
with its values of financial responsibility, Max New York Life has adopted prudent
financial practices to ensure safety of policyholder's funds. The Company's paid up is
Rs. 1,232 crore.

Having set a Best in Class Agency Distribution Model in place, the company is spearheading
a major thrust into additional distribution channels to further grow its business. The company
has multi-channel distribution that includes the agency distribution, partnership distribution,
bancassurance, distribution focused on emerging markets and alliance marketing through
employed sales force. The company currently has33 bancassurance relationships, 14
corporate agency tie-ups and direct sales force at 14 locations. Max New York Life has put
in place a unique hub and spoke model of distribution to deepen rural penetration. The company
has 39 (9 hub office 30 spoke offices) offices dedicated to emerging markets in Punjab and
Haryana. Max New York Life offers a suite of flexible products. It now has 38 products covering
both life and health insurance and 8 riders that can be customized to over 800 combinations
enabling customers to choose the policy that best fits their need. Besides this, the company
offers 6 products and 4 riders in group insurance business.

The company currently has more than 10,424 employees.

Promoters:
Max New York Life is a joint venture between Max India Ltd., one of India’s
leading multi-business corporate and New York life, a Fortune 100 company. Max

41
New York Life Insurance, incorporated in 2000, is one of India’s leading private
life insurance companies. The company offers both individual and group life
insurance solutions. It has established a wide distribution network across India.
Through its wide network of highly competent life insurance agent advisors and
flexible product solutions, Max New York life Insurance is creating a partnership
for life with its customers in India.

Max India Ltd.

Founded in 1985, Max India Limited is a Public Limited company listed on the
NSE and BSE of India with over 26,000 shareholders. Today, Max India Limited
is a multi-business corporate, driven by the spirit of Enterprise, focused on
Knowledge, People and Service oriented businesses of:
• Healthcare (Max Healthcare)

• Life Insurance (Max New York Life Insurance)

• Clinical Research (Neeman Medical International)

Max also Maintains Interests in:

• Specialty Plastic Products for the packaging industry (Max Speciality

Products)

• Healthcare Staffing (Max Health Staff)

Prominent shareholders are Mr Analjit Singh and a leading private equity firm,
Warburg Pincus which accounts for 28.7% of the total shareholding. The
balance shareholding is held by the public and Institutional Investors.

Till 1999, The Company’s Main Interests and Partnerships were the
following:
Business

• Bulk Active Pharmaceuticals

• Electronic Component Distribution

• Mobile Telephony

42
 • V-SAT Communications

• Plating Chemicals

• Information Technology
Partners

• DSM Gist Brocades

• Motorola, USA

• Avnet Inc., USA

• Hutchison Telecom Ltd. Hong Kong

• Comsat Investment Inc., USA & Lockheed Martin, USA

• Atotech, Germany

• Mind Crossing, USA

In 2000, the Company reinvented and restructured itself to focus on the
businesses of ‘Life’ under the them, Life…Our Focus.
Max New York Life Insurance, founded as a Joint Venture between Max India
Limited and New York Life, a Fortune 100 company, is one of the leading
private life insurers in India.
Max Healthcare, a subsidiary of Max India Limited is India’s first provider of
comprehensive, standardized, seamless, and integrated world-class healthcare
services.
Neeman Medical International (NMI) is an International Clinical Research
provider operating across three locations spanning North America, Asia and
Latin America. Each location is backed by comprehensive infrastructure and
highly skilled and experienced personnel.

43
New York Life LLC

New York Life Insurance Company,(www.newyorklife.com) a Fortune 100

company founded in 1845, is the largest mutual life insurance company in the
United States and one of the largest life insurers in the world. Headquartered in
New York City, New York Life’s family of companies offer life insurance,
annuities and long-term care insurance. New York Life Investment
Management LLC provides institutional asset management and retirement plan
services. Other New York Life affiliates provide an array of securities products
and services, as well as institutional and retail mutual funds.
The mission of New York Life is to maintain its superior 'financial strength',
adhere to the highest standards of 'integrity' and demonstrate 'humanity' by
treating its customers, agents and employees with compassion, consideration
and respect.
New York Life is one of the largest and strongest life insurance companies in
the world with more than USD$215 billion assets under management and has
received among the highest ratings for financial strength from the life insurance
industry's principal rating agencies: A.M. Best (AA+), Standard & Poor's (AA+),
Moody's (Aa1), Fitch (AAA). According to Moody's, "New York Life's rating
reflects the company's good quality investment portfolio, ample liquidity, and
sound capitalization, as well as the good growth potential of its international
business.”
As a leader in the insurance industry, New York Life continues to bring to its
operations new management concepts, advanced technologies, new
distribution and training systems and innovative insurance products.

44
 Children Plans

Parenting is all about creating the right environment for your children to grow in. The
care & love that you shower on them must also be accompanied with the proper
planning for their future. Helping your child "win the battle of life" is the best gift that a
Parent can give to his child. Max New York Life with their children plans makes it
possible for you to achieve this dream of giving your child a happy and financially
secured future. Following are the products, which will provide financial support to your
children, while pursuing their dream careers, getting married, buying a home etc:

Children's Endowment to 18 (Par)

Children's Endowment to 24 (Par)

SMART Steps™

SMART Steps™ Plus

SMART Steps™ Single Premium

45
 Retirement Plans

People retire but needs don't. Max New York Life with their retirement plans
comes forward to support you in your old age and makes the unfulfilled dreams of
your life come true. Retirement is like a second life, where you can fulfill all your
dreams, which you have been pushing aside in your past because of lack of time.
Our retirement plans make sure that you maintain your comfortable lifestyle and
don't compromise with your wishes because of lack of financial resources in your
old age.

Easy Life™ Retirement (Par)

SMART Invest™ Pension

46
 Health Plans

A very common saying - "Heath is Wealth", may have become old but it's true.
Diseases can grab anyone at anytime. So, you have to pre-plan in such a way
that you don't have any financial constraint at the time, when your loved ones are
in severe pain. Everybody believes that "prevention is better than cure" and adapt
strict diet plans, exercise daily for it as well but no matter how well you take care
of your self, diseases can grab you anytime. So, Max New York Life's Health
Plans have been designed to take into account the diverse set of needs at times
of an individual's ill health. These health plans provide you financial security at
the time of health treatments required.
LifeLine MediCash™
LifeLine Wellness™ Plus
LifeLine MediCash™ Plus
LifeLine Safety Net™
LifeLine Wellness™

47
 Savings Plans

It must be admitted that a certain degree of instability lies in every individual's life.
Foreseen and unforeseen needs can arrive at any point of time. Max New York
Life's savings plans will help you. Our dual benefits saving plans recognizes your
need for a complete all round financial protection and therefore provides you life
cover and helps in the growth of your money.
Money will fly soon, if not taken care of. Therefore, we offer you diverse savings
plans, which would undoubtedly suit your needs and your budget.

Whole Life Participating

Life Gain™ Plus 25 (Par)
20 year Endowment (Par)
Life Pay™ Money Back
Endowment to Age 60 (Par)
Life Gain™ Endowment
Life Gain™ Plus 20 (Par)
Life Partner™

48
 Rural Plans

Can anybody remember when the times were not hard and money not
scarce?
Max New York Life's Rural Plans have been tailored especially to meet all kinds
of requirements of rural customers or investors. The Hassle free procedures and
Low & affordable premiums, being the key features of rural plans, proves Max
New York Life exceptional in offering their incredible services to all the classes of
our society. The following Rural plans have been designed keeping in mind the
rural investors. So that they don't have to worry about the high premium rates and
complex application forms.
Easy Term Policy

49
What is Max Vijay
The Background
As human beings we all have dreams and aspirations, a desire to achieve and
go beyond. Go beyond the present, changing our lives and for some, changing
the lives of others too for the better. We are all firm believers in the ‘hand of
destiny’, however that doesn’t deter us from trying, thankfully. Yet there are
those, who through the drudgeries and miseries of their everyday life,
sometimes feel trapped refusing to seek and explore an otherwise unexplored
path.
The Vision
Created with the vision to empower every Indian to secure his dreams, Max
Vijay is an honest endeavor to provide financial security to the under-served
masses by creating a life insurance product rooted in a deep understanding of
their financial needs.
So what is Max Vijay, a salutation, a victory path or an insurance policy?
Max Vijay is not just another life insurance policy of MNYL; Max Vijay is the
symbol of victory of the common man, a beacon for a better tomorrow. We
believe that true win for India lies in encouraging people to save their hard
earned money, a small contribution that would go on to change their future.
While the underlying reality remains that “Money…It just slips through” Max
Vijay initiative will empower people, provide hope and will offer insurance cum
saving solutions to the under-served packed in the form of an Insurance
Savings Box (Beema Gullak)
Max New York Life Insurance Company Limited proudly presents a
unique Life Insurance policy “Max Vijay” which is–
• About making better tomorrow possible
• A Clear sight of goal - Fulfillment of dream
• A belief in the path to achieve the goal, and
• “Vijay” is the Triumph of human life

50
 Chapter- 8

MARKET RESEARCH

What is Market Research?

Market research is the systematic design, collection, analysis, and reporting of

data and findings relevant to a specific marketing situation facing the company.

Market research firms fall in to the three categories:

1) Syndicated-service research firms-These firms gather consumer and trade

information, which they sell for a fee.

2) Customs market research firms-These firms are hired to carry out specific
projects. They design the study and report the findings.

3) Specialty-line market research firms-These firms provide specialized

research services to other firms.

Benefits of Market Research

Information gained through marketing research isn't just "nice to know." It's solid
information that can guide your most important strategic business decision.
Market research is effective when the findings or conclusions you reach have a
value that exceeds the cost of the research itself.

Market research guides your communication with current and potential

Customers

Once you have good research, you should be able to formulate more effective
and targeted marketing campaigns that speak directly to the people you're trying
to reach in a way that interests them. For example, some retail stores ask
customers for their zip codes at the point of purchase. This information, which
pinpoints where their customers live, will help the store's managers plan suitable
direct mail campaigns.

51
Market research helps you identify opportunities in the marketplace.

For example, if you are planning to open a retail outlet in a particular geographic
location and have discovered that no such retail outlet currently exists, you have
identified an opportunity. The opportunity for success increases if the location is in
a highly populated area with residents who match your target market
characteristics. The same might be true of a service you plan to offer in a specific
geographic area or even globally, via the Internet.

Market research minimizes the risk of doing business.

Instead of identifying opportunities, the results of some market research may

indicate that you should not pursue a planned course of action. For example,
marketing information may indicate that a marketplace is saturated with the type
of service you plan to offer. This may cause you to alter your product offering or
choose another location.

Market research helps you evaluate your success.

Information gathered through market research helps you to determine if you're

reaching your goals. In the above example, if your product's target market is
women between the ages of 35 and 50, then you're making progress toward your
goal. (If not, this information can indicate a needed change in marketing strategy!)

• Marketplace competition is information about the other companies

Within your area of business. Research answers these questions: Who are my
primary competitors in the market? How do they compete with me? In what
ways do they not compete with me? What are their strengths and weaknesses?
Are there profitable opportunities based upon their weaknesses? What is their
market niche? What makes my business unique from the others? How do my
competitors position themselves? How do they communicate their services to

52
the market? Who are their customers? How are they perceived by the market?
Who are the industry leaders? What is their sales volume?

• Environmental factors information uncovers economical and political

Circumstances that can influence your productivity and operations. Questions

to be answered include: What are the current and future population trends?
What are the current and future socio-economic trends? What effects do
economic and political policies have on the your target market or my industry?
What are the growth expectations for my market? What outside factors
influence the industry's performance? What are the trends for this market and for
the economy? Is the industry growing, at a plateau, or declining?

Target market. What is the best target market for the products or services being
offered by the organization? How large is the target market and how can it be
described? What are the attitudes, opinions, preferences, lifestyles, and so on of
its members?

Products/services. Regarding particular, products and services, how satisfied or

dissatisfied is the target. market with what is currently available?

What product features and benefits do those consumers desire? How do they
compare the organization’s product with those offered by competitors?

Price. How much value does the target market place on the product in question?
What products are they willing to substitute for the product in question? What
prices are charged for those substitutes? What advantages— in features or
benefits or appeals—does the organization’s product have that might allow it to
charge a higher price?

Distribution. What distribution channel is the target market most likely to use
when purchasing the product in question? Is the organization’s pricing in line with
what the target market expects to pay for the product when purchased through

53
that channel? Does the pricing include the size of margin the channel traditionally
expects to receive? Will the channel be able to provide the service or support
needed for the product?

Promotion. What can the organization say in its advertisements about its product
that will appeal to the target market and lead them to consider the organization’s
product more attractive, than those offered by competitors?

Through what medium(s) (television, newspaper, billboards, etc.) should the

organization advertise? What specific vehicles (i.e., what specific television
programs or newspapers) should the organization use to carry the
advertisements? How often should the advertisements appear, and how much
money should the organization spend on advertising? Should personal selling be
used and, if so, how? What kinds of promotions would have a favorable effect on
the target market?

Market Research

The Process

Market research, like other components of marketing such as advertising, can be

quite simple or very complex. You might conduct simple market research such as
including a questionnaire in your customer bills to gather demographic information
about your customers. On the more complex side, you might engage a
professional market research firm to conduct primary research to aid you in
developing a marketing strategy to launch a new product.

Regardless of the simplicity or complexity of your marketing research project,

you'll benefit by reviewing the following seven steps in the market research
process.

54
Step One: Define the Problems, the decision alternatives, and the research
objectives:

The market research process begins with identifying and defining the problems
and opportunities that exist for your business, such as:

1 Launching a new product or service.

2 Low awareness of your company and its products or services.

3 Low utilization of your company's products or services. (The market is familiar

with your company, but still is not doing business with you.)

4 A poor company image and reputation.

5 Problems with distribution, your goods and services are not reaching the
buying public in a timely manner.

Step Two: Set Objectives, Budget and Timetables

Objective: With a marketing problem or opportunity defined, the next step is to

set objectives for your market research operations. Your objective might be to
explore the nature of a problem so you may further define it. Or perhaps it is to
determine how many people will buy your product packaged in a certain way and
offered at a certain price. Your objective might even be to test possible cause and
effect relationships. For example, if you lower your price by 10 percent, what
increased sales volume should you expect? What impact will this strategy have
on your profit?

Budget: How much money are you willing to invest in your market research?

55
How much can you afford? Your market research budget is a portion of your
overall marketing budget. A method popular with small business owners to
establish a marketing budget is to allocate a small percentage of gross sales for
the most recent year. This usually amounts to about two percent for an existing
business. However, if you are planning on launching a new product or business,
you may want to increase your budget figure, to as much as 10 percent of your
expected gross sales. Other methods used by small businesses include analyzing
and estimating the competition's budget, and calculating your cost of marketing
per sale.

Timetables: Prepare a detailed, realistic time frame to complete all steps of the
market research process. If your business operates in cycles, establish target
dates that will allow the best accessibility to your market. For example, a holiday
greeting card business may want to conduct research before or around the
holiday season buying period, when their customers are most likely to be thinking
about their purchases.

Step Three: Select Research Types, Methods and Techniques

There are two types of research: primary research or original information

gathered for a specific purpose and secondary research or information that
already exists somewhere. Both types of research have a number of activities and
methods of conducting associated with them.

Secondary research is usually faster and less expensive to obtain that primary
research. Gathering secondary research may be as simple as making a trip to
your local library or business information center or browsing the Internet.

See Market Research Types, Methods and Techniques for more details about the
activities and methods for primary and secondary research.

Step Four: Design Research Instruments

56
The most common research instrument is the questionnaire. Keep these tips in
mind when designing your market research questionnaire.

1 Keep it simple.

2 Include instructions for answering all questions included on the survey.

3 Begin the survey with general questions and move towards more specific
questions.

4 Keep each question brief.

5 If the questionnaire is completed by the respondent and not by an interviewer

or survey staff member, remember to design a questionnaire that is graphically
pleasing and easy to read.

6 Remember to pre-test the questionnaire. Before taking the survey to the

printer, ask a few people-such as regular customers, colleagues, friends or
employees-to complete the survey. Ask them for feedback on the survey's
style, simplicity and their perception of its purpose.

7 Mix the form of the questions. Use scales, rankings, open-ended questions
and closed-ended questions for different sections of the questionnaire. The
"form" or way a question is asked may influence the answer given.
Basically, there are two question forms: closed-end questions and open-
end questions.

Step Five: Collect Data

To help you obtain clear, unbiased and reliable results, collect the data under the
direction of experienced researchers. Before beginning the collection of data, it is
important to train, educate and supervise your research staff. An untrained staff
person conducting primary research will lead to interviewer bias.

57
Stick to the objectives and rules associated with the methods and techniques you
have set in Step Two and Step Three. Try to be as scientific as possible in
gathering your information.

Step Six: Organize and Analyze Data

Once your data has been collected, it needs to be "cleaned." Cleaning research
data involves editing, coding and the tabulating results. To make this step easier,
start with a simply designed research instrument or questionnaire.

Some helpful tips for organizing and analyzing your data are listed below.

1 Look for relevant data that focuses on your immediate market needs.

2 Rely on subjective information only as support for more general findings of

objective research.

3 Analyze for consistency; compare the results of different methods of your

data collection. For example, are the market demographics provided to you
from the local media outlet consistent with your survey results?

4 Quantify your results; look for common opinions that may be counted together.

Step Seven: Present and Use Marketing Research Findings

Once marketing information about your target market, competition and

environment is collected and analyzed, present it in an organized manner to the
decision makers of the business. For example, you may want to report your
findings in the market analysis section of your business plan. Also, you may want
to familiarize your sales and marketing departments with the data or conduct a
company-wide informational training seminar using the information. In summary,
the resulting data was created to help guide your business decisions, so it needs
to be readily accessible to the decision makers.

58
RESEARCH STUDY

8.1. RESEARCH OBJECTIVES

The objective of the project is to find out the consumer Satisfaction or

Preference and behavior of customer towards “Insurance Sector especially

towards MAX NEW YORK.

What all are the stimuli effecting there choices before selecting a Insurance
company. Is it the credibility, good return or celebrity endorser.

It also helps in letting the above Insurance know its basic position in relation to its
competitors in the market & how better can it help re-design its product in
achieving higher sales growth.

The study of this research also analyses the findings and provide MAX NEW
YORK with the effective recommendations or suggestions.

RESEARCH METHODOLOGY

Research Design

A research design is a type of blue print prepared depending on various types of

blueprints available for the collection, measurement and analysis of data. A
research design calls for developing the most efficient plan of gathering the
needed information. The design of research study is based on the purpose of the
study.

A research design is the specification of methods and procedures for acquiring

the information needed. It is overall operational pattern or framework of
the project that stipulates what information is to be collected from
which source by what procedures.

Types, Methods and Techniques

59
Secondary Research

Usually the easiest and least expensive, secondary research is information that
already exists somewhere. It may be a study, a group of articles on a topic, or
demographic or statistical data gathered by someone else. For example, the
demographic data about car owners in your county available from your Chamber
of Commerce may be just the information you need-and it's already gathered!

Secondary Research Activities

1 Review and analyze the existing data on your target markets available from
magazines, books, published research studies, government publications, etc.

2 Evaluate the competition.

3 Assess environmental factors such as social, economic, political, etc.

Secondary Research Methods

Because secondary research already exists, no specific scientific method or

technique is needed to collect information. Instead, your efforts are spent locating
and gathering market information from reliable sources. Don't forget the Internet.
Many of the resources listed below, such as magazines, trade associations and
government resources now have materials available online.

Some resources for gathering secondary research information include:

1 Libraries and other public information centers - Look in reference

centers for resource materials and other existing data on your market.

2 Books and business publications - Many books have been written on

specific industries and markets. Look for helpful existing data and
environmental factors.

3 Magazines and newspapers - Each and every day, studies and other
survey results are released as news events. Also, look into news about

60
 environmental factors such as the leading economic indicators or the
upcoming local political elections.

4 Trade associations - Most associations have reports on the industries they

serve, the standards they operate under and leaders in the field.

Many even conduct educational seminars on trends and other issues.

Associations are also helpful in researching the competition. Chambers of
Commerce - The local Chamber is a terrific resource for information on the
community you hope to serve, other local businesses and maps of the area.
One can also learn from other members at Chamber networking events.

1 Banks, real estate and insurance companies may keep information and
statistics on the communities they serve.

2 Wholesalers and manufacturers - Contact these enterprises for

information on the industry standards, customers, costs, distribution, potential
problems

3 Indian government resources can provide extensive demographic data on

population, markets and the economy like Census Bureau of India.

4 Media representatives - Advertising salespeople at TV, radio, and print

media outlets keep information on the markets their viewers, listeners, and
readers to help influence potential advertisers.

5 Competition - Ask directly for company brochures, menu of products and

services, prices, annual reports, etc. One may have to disguise him/her self
as a potential customer!

Primary Research

Sometimes, the information you need doesn't exist-anywhere! You've searched

the Internet, you scoured the library, journals and databases all to no avail. That's

61
when you may need to conduct primary research, or research conducted for a
specific purpose. FYI, the secondary research you may have used was probably
someone's primary data once.

Primary Research Activities

1 Conducting surveys to create market data or using other research

Instruments such as questionnaires, focus groups, interviews, etc.

2 Noting first-hand observations

3 Conducting experiments

Primary Research Methods

Each methodology uses "sampling" which allows the researcher to reach

conclusions about a population within a certain degree of accuracy without having
to survey everyone. It is not necessary to have a large sample size.

Samples as few as one percent of a target market can often provide reliable
results, under the direction of experienced researchers.

Primary research can be either qualitative or quantitative.

Qualitative research provides definitive market information regarding the opinions

and behaviors of the subjects in the market research study.

Qualitative research is used to achieve a variety of objectives.

1 Obtain helpful background information on a market segment

2 Explore concepts and positioning of a business or product

3 Identify attitudes, opinions and behavior shared by a target market

4 Prioritize variables for further study

5 Fully define problems

62
6 Provide direction for the development of questionnaires

Sampling

Sample

A sample is the set of observations obtained from experimental unit that were
selected from a larger group (the population). By studying the sample it is hoped
to draw valid conclusions about the larger group. If the conclusions drawn from a
sample are to be meaningful the sample must be obtained in a random fashion.
This means that each member of the population has an equal chance of being
included in the sample. This ensures that the sample is unbiased. Unfortunately, it
is not always easy to obtain a truly random sample from sampling units that are
widely dispersed.

A representative sample is only possible if, before collecting the sample, the
researcher has carefully and completely defined the population, including a
description of the members to be included.

Why Sample?

Sampling is done in a wide variety of research settings. Listed below are a few of
the benefits of sampling:

1. Reduced cost: It is obviously less costly to obtain data for a selected subset of
a population, rather than the entire population. Furthermore, data collected
through a carefully selected sample are highly accurate measures of the larger
population. Public opinion researchers can usually draw accurate inferences for
the entire population of the United States from interviews of only 1,000 people.

2. Speed: Observations are easier to collect and summarize with a sample than
with a complete count. This consideration may be vital if the speed of the analysis
is important, such as through exit polls in elections.

63
3. Greater scope: Sometimes highly trained personnel or specialized equipment
limited in availability must be used to obtain the data. A complete census
(enumeration) is not practical or possible. Thus, surveys that rely on sampling
have greater flexibility regarding the type of information that can be obtained.

It is important to keep in mind that the primary point of sampling is to create a

small group from a population that is as similar to the larger population as
possible. In essence, we want to have a little group that is like the big group.

With that in mind, one of the features we look for in a sample is the degree of
representative ness - how well does the sample represent the larger population
from which it was drawn? How closely do the features of the sample resemble
those of the larger population?

Types of Samples

Although there are a number of different methods that might be used to create a
sample, they generally can be grouped into one of two categories:

1 Probability samples or

2 Non-probability samples.

Probability Samples

The idea behind this type is random selection. More specifically, each sample
from the population of interest has a known probability of selection under a given
sampling scheme. There are four categories of probability samples described
below.

Simple Random Sampling

The most widely known type of a random sample is the simple random sample
(SRS). This is characterized by the fact that the probability of selection is the
same for every case in the population. Simple random sampling is a method of

64
selecting n units from a population of size N such that every possible sample of
size n has equal chance of being drawn.

An example may make this easier to understand. Imagine you want to carry out a
survey of 100 voters in a small town with a population of 1,000 eligible voters.
With a town this size, there are "old-fashioned" ways to draw a sample. For
example, we could write the names of all voters on a piece of paper, put all pieces
of paper into a box and draw 100 tickets at random. You shake the box, draw a
piece of paper and set it aside, shake again, draw another, set it aside, etc. until
we had 100 slips of paper. These 100 form our sample. And this sample would be
drawn through a simple random sampling procedure - at each draw, every name
in the box had the same probability of being chosen.

Stratified Random Sampling

In this form of sampling, the population is first divided into two or more mutually
exclusive segments based on some categories of variables of interest in the
research. It is designed to organize the population into homogenous subsets
before sampling, then drawing a random sample within each subset.

Systematic Sampling

This method of sampling is at first glance very different from SRS. In practice, it is
a variant of simple random sampling that involves some listing of elements - every
nth element of list is then drawn for inclusion in the sample. Say you have a list of
10,000 people and you want a sample of 1,000.

Creating such a sample includes three steps:

1. Divide number of cases in the population by the desired sample size. In this
example, dividing 10,000 by 1,000 gives a value of 10.

2. Select a random number between one and the value attained in Step. In this
example, we choose a number between 1 and 10 - say we pick 7.

65
3. Starting with case number chosen in Step 2, take every tenth record (7, 17, 27,
etc.).

Cluster Sampling

In some instances the sampling unit consists of a group or cluster of smaller units
that we call elements or subunits (these are the units of analysis for your study).
There are two main reasons for the widespread application of cluster sampling.
Although the first intention may be to use the elements as sampling units, it is
found in many surveys that no reliable list of elements in the population is
available and that it would be prohibitively expensive to construct such a list. In
many countries there are no complete and updated lists of the people, the houses
or the farms in any large geographical region.

Important things about cluster sampling:

1. Most large-scale surveys are done using cluster sampling;

2. Clustering may be combined with stratification, typically by clustering within

strata;

3. In general, for a given sample size n cluster samples are less accurate than the
other types of sampling in the sense that the parameters you estimate will have
greater variability than an SRS, stratified random or systematic sample.

Non probability Sampling

Social research is often conducted in situations where a researcher cannot select

the kinds of probability samples used in large-scale social surveys. The primary
difference between probability methods of sampling and non probability methods
is that in the latter you do not know the likelihood that any element of a population
will be selected for study.

There are four primary types of non-probability sampling methods:

66
Availability Sampling

Availability sampling is a method of choosing subjects who are available or easy

to find. This method is also sometimes referred to as haphazard, accidental, or
convenience sampling. The primary advantage of the method is that it is very
easy to carry out, relative to other methods. A researcher can merely stand out on
his/her favorite street corner or in his/her favorite tavern and hand out surveys.
One place this used to show up often is in university courses. Years ago,
researchers often would conduct surveys of Quota Sampling.

Quota sampling is designed to overcome the most obvious flaw of availability

sampling. Rather than taking just anyone, you set quotas to ensure that the
sample you get represents certain characteristics in proportion to their prevalence
in the population. Note that for this method, you have to know something about
the characteristics of the population ahead of time. Say you want to make sure
you have a sample proportional to the population in terms of gender - you have to
know what percentage of the population is male and Purposive Sampling.

Purposive sampling is a sampling method in which elements are chosen based on

purpose of the study. Purposive sampling may involve studying the entire
population of some limited group (sociology faculty at Columbia) or a subset of a
population (Columbia faculty who have won Nobel Prizes). As with other non-
probability sampling methods, purposive sampling does not produce a sample
that is representative of a larger population, but it can be exactly what is needed
in some cases - study of organization, community, or some other clearly defined
and relatively limited group.

8.3. RESEARCH METHODOLOGY ADOPTED

• Type of research :- Qualitative research

-Element- Consumers

67
-Sampling unit- Each element acts as an independent unit.

• Sampling Type:- Area sampling.

As research was limited on the basis of geographical location i.e.

SHAHJAHANPUR

• Sample Size: - 160 Customers

• Data Source: - Primary Data collected by conducting face to face personal

interviews.

• Research instruments: -

Questionnaire was used to extract the information from the respondents.

Questions were

- Close ended

- Multiple choices

• Method of Sampling: - Random

8.4. CONSTRUCTION OF QUESTIONNAIRE

Words are often used in different ways by different people. Your goal is to write
questions that each person will interpret in the same way. A good question should
be short and straightforward. A questionnaire should not be too long, use plain
English and the question shouldn't be difficult to answer.

Only through careful writing, editing, review, and rewriting can you make a good
questionnaire. Consider the following guidelines for conducting your surveys:

Use Closed-ended questions as well as open-ended ones

Put your questions in a logic order

68
The issues raised in one question can influence how people think about
subsequent questions. It is good to ask a general question and then ask more
specific questions. For example, you should avoid asking a series of questions
about a Insurance sector and then question about the most important factors in
selecting a Insurance company

1 The purpose of the survey

2 Why it is important to hear from the correspondent

3 What may be done with the results and what possible impacts may occur
with the results.

4 Address identification

5 Person to contact for questions about the survey.

6 Due date for response

69
 Limitations
1 The research covers only west Delhi, so the survey results are restricted to a
particular area.

2 Biased answers can sometimes be received in questionnaire because

customers some times tend to hide their salary, price as the factor for buying
the product etc.

3 Survey is done under limited time constraint so the completeness of the

product may not be sure.

4 Behavior of the customer keeps on changing as they are continuously in linked

with the external environmental happening.

5 Market is more heterogeneous so the survey is not too flexible.

6 Consumer taste and preferences are hard to judge so it can change

frequently.

7 People were hard pressed with time so most of them were reluctant to answer.

70
 Analysis & Data Interpretation
Table-1

TABLE IS SHOWING THE SEX RATIO OF THE RESPONDENTS WHILE

TAKING THE SAMPLING IN DELHI REGION

SEX MALE FEMALE

%NO.OF RESPONDENTS 125 35

% No. of Respondents

22%

MALE
FEMALE

78%

Analysis:- From above table we can see that 78% people are male
respondent and 22% are female while taking the sample out of 160 people.

71
 Table-2

TABLE IS SHOWING THE AGE GROUP OF THE RESPONDENTS

AGE 18-25 26-35 36-45 ABOVE

45

NO.OF RESPONDENTS 40 60 38 22

Analysis:- From above table we can find that the 25% respondents are of
age group between 18-25 and 37.5% people are of 26-35. Rests are of
23.7% between36-45 and above 45 are 13.75%.

Inference:- From above table and analysis we can see the maximum no. of
respondents are of age between 26to35.

72
 Table-3

TABLE IS SHOWING THE OCCUPATION OF THE RESPONDENTS

OCCUPATION BUSINESS SER-VICE PROFES- ANY

SIONAL OTHERS

%NO.OF 43 82 25 10
RESPONDENTS

Analysis:- From above table we can get that 26.87% respondents are from
business class. 51.25% belongs to service class and 15.62%are
professionals and rest 6.25% belongs to other class.

Inference:- From above table we can infer that majority of respondents

belongs to service class.

%NO.OF RESPONDENTS

BUSINESS
SER-VICE
PROFES-SIONAL
ANY OTHERS

73
 Table-4

TABLE IS SHOWING THE INCOME LEVEL OF THE RESPONDENTS

INCOME BELOW 250000 400000 ABOVE

250000 --400000 --600000 600000

% NO. OF 123 22 13 2
RESPONDETS

Analysis:- From above table we can find that 76.87% respondents belongs
to income group of below 250000. 13.75% belongs to income group of
250000-400,000, 8.12% of 400,000 to 600,000, and 1.25% of above 600,000.

Inference:- From above table and analysis we can infer that maximum no. of
respondents are belongs to income group below 250000.

% NO. OF

BELOW 250000
250000 400000
400000 600000
ABOVE 600000

74
 Table-5

TABLE IS SHOWING WHY PEOPLE BUY INSURANCE POLICY

SAFETY OF LIFE INVESTMENT TAX SAVING OTHERS

30 55 75 0

Analysis:- From above table we can see that the 18.75% respondents buy
the insurance policy for safety purpose,34.37% people take it as a
investment and 46.87% buy it for tax saving.

Inference:- From above table and analysis we can infer that the maximum
respondents want the tax saving while buying a insurance plan.

80

70

60

50

40 Series1

30

20

10

0
SAFETY OF INVESTMENT TAX SAVING OTHERS
LIFE

75
 Table-6

TABLE IS SHOWING THAT PEOPLE ARE ASSOCIATED WITH

WHICH INSURANCE COMPANY

ICICI LIC BIRLA MAX NEW OTHERS

YORK
“PRUDENTIAL” SUN LIFE

30 96 4 18 12

100
90
80
70
60
50 96
40
30
20 30
10 18 12
4
0
ICICI LIC BIRLA MAX NEW OTHERS
YORK

Analysis:- From above table we can see that 60% respondents

are associated with LIC, 18.75% with ICICI “PRU”, 11.25% with
MAX NEW YORK,2.5% with BIRLA SUN LIFE AND 7.5% with
others.

Inference:- From above table and analysis we can infer that

majority of people are associated with LIC but ICICI is the
biggest private life insurance provider

76
 Table-7

TABLE IS SHOWING HOW PEOPLE COME TO KNOW ABOUT NEW

POLICIES

AGENT\ NEWSPAPER\ INTERNET OTHERS

ADVISIORS MAGAZINE

120 26 8 6

120

100
80
60
40
20
0
AGENT\ INTERNET
ADVISIORS

Analysis:- From above table we can see that 75% respondents get
information about new policies through Agent\Advisors. 16.25% through
Newspaper\Magazine, 5% through Internet, 3.75% through other ways.

Inference:-From above table and findings we can infer that Agent\Advisors

are the main medium of information about insurance plan.

77
 Table-8

TABLE IS SHOWING WHAT INFLUENCES PEOPLE TO BUY A POLICY AND

WHAT IS THE REASON OF THEIR ASSOCIATION WITH THIS COMPANY

RETURN SERVICE ADVERTISENENT CELEBRITY OTHERS

ENDORSER

116 34 2 2 6

120

100

80

60 116

40

20 34

2 2 6
0
RETURN CELEBRITY
ENDORSER

Analysis:- From above table we can see that 21.25% people go for service of
the company 72.5% want high return 2.5% associated with the company
due to advertisement and celebrity endorser and 3.75% with other factor.

Inference:- From above table and analysis we can infer that majority of
people influenced by the return of the company.

78
 Table-9

TABLE IS SHOWING HOW PRIVATE LIFE INSURANCE COMPANIES ARE

PERFORMING

GOOD FAIR POOR CAN’T SAY

113 35 5 7

120

100

80

60 113

40

20 35
5 7
0
GOOD FAIR POOR CAN’T SAY

Analysis:- From above table we can get that majority of people 70.62% think
their company is performing good and 21.8%, think fair where 3.12% think
their company performing poor and 4.37% give no response.

Inference:- From above table and analysis we can infer that maximum no. of
people say their company are performing good.

79
 Chapter – 9

Conclusions
1 The age group between 26-35 is more conscious about the insurance and
they avail the policies.

2 People get insured for safety purpose but some people have different thoughts
like investment or tax saving.

3 Professionals are the highly insured group and following are service class as
well as businessmen.

4 Economic condition of a person influenced for getting insurance policies.

5 ICICI “Prudential” is the biggest private life insurance company according to

finding of research. After LIC it has the most number of customers.

6 Agent or Advisors are the big sources of information about a new plan of
insurance company.

7 Due to credibility of that company people buy a insurance plan.

8 People are now thinking the private insurance companies are doing a good job
and it is easily accessible.

9 ULIP is the popular plan among the insure because it has a higher return

10 Change is very important and one who goes with the changing environment
always succeed, that is what I have learned from the study. The competition
has grown too much in the insurance sector with the opening of the sector.
This is for the LIC to change their strategy on the basis of the competition. On
the basis of the project I can conclude that the insurance sector is one of the
oldest industry of India. It was under private control earlier but

80
9 nationalized after independence. For many years it was only LIC for life and
GIC for general insurance companies available. In 1991 when the
liberalization started, foreign investors become attracted towards the country.
In 1993 government appointed Mr. R.N. Malhotra committee to suggest
reforms measures. In 1998 the New IRDA Bill was passed and became a law,
which paved the way for foreign insurance companies.

Multinational insurance companies aligned with the Indian companies to step into
this sector. LIC has the largest network of operation with 2148 offices, 124,000
employee and 750000 agents.

ICICI Prudential is the largest private player in the insurance industry in India. It
has sold over one-lakh fifty thousand policies till date. Besides LIC, ICICI
Prudential is facing stiff competition from other private insurance players.

Out of total population of 1 billion of country, only 22% have insurance cover. So
we can say that there is still large potential for both the public and private
companies. Private companies have to give varied customized product to
compete with the LIC, which is holding about 97% of the total market.

81
 Chapter – 10

RECOMMENDATIONS
1 People have less knowledge about current Insurance plan, so company
should advertise it more through Television, Radio and Newspaper because
these mediums are easily accessible to them.

2 The return in insurance plan should be hiked because people are ready to
take risks.

3 Insurance companies has some plan about poor people but it is not
implemented properly they are remain untouched.

4 Government should allow hiking the stake of foreign collaborator because it

makes more competitive market of insurance.

5 Government should withdraw its umbrella from LIC, it make healthier

competition among insurance companies.

6 Insurance companies should come up with new policies that can cover the
entire family in one policy.

7 Insurance companies should extend its cover to poor people, because it is

known fact that merely 22% people are insured out of 100%

8 Insurance companies should venture their policies in remote areas of our

country.

The insurance companies should now try to identify the gap between current
level of customer service and customer expectations. Some of the strategies
being recommended are as follows:

1 Product Differentiation: Offering a product that is distinctly different from

other products available in the market.

82
2 Innovativeness: Identifying means of a delightful customer experience.

3 Riders: These are additional offerings along with the main product.

4 Flexibility: The companies should make their products flexible for the
convenience of their customer.

5 Hassle Free Service: All bureaucracy in customer interactions should be

eliminated.

6 Proper Policy Documentation: Wrong interpretations/ non-awareness of

policy document by the customer may have serious implications in the
long term and the possibility of the same should be alleviated by the
insurance companies.

83
 Chapter – 11

BIBLIOGRAPHY
1 Insurance Advisor’s Manuals and Study Material of MAX NEW YORK.

2 Insurance Watch and other Magazines.

3 Economic Times

4 www.google.com

5 www.licindia.com

6 www.maxnewyorklife.com

7 www.irda.gov.in

84
 ANNEXURE
Questionnaire for Study of Insurance Preferences

Dear Sir/Madam,

I am a student of “…………………………………………………………” as a part of

my curriculum; I am doing a brief survey to find out more about consumer
preference regarding Insurance. I would be grateful if you could spare a few
minutes to participate in it. Kindly mark where required.

1. Name: --------------------------------------------------------------(Optional)
2. Contact No: -------------------------------------------------------(Optional)
3. Location: -----------------------------------------------------------
4. Sex:  Male  Female
5. Occupation:  Business  Service
 Professionals  Others
6. Age:  18-25 yrs  26-35 yrs
 36-45 yrs  45 & above
7. Annual Income  < 2,50,000  2,50,000-4,00,000
 400,000-6,00,000  6, 00,000 & above
8. Do you possess a life insurance policy?
 Yes  No
9. Why do you buy insurance policy?
 Safety for life  Investment purpose
Tax saving  Others

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10. Which insurance company, you are associated with?
 ICICI ‘pru’  LIC
 MAX NEW YORK LIFE  Birla Sun life
 Others
11. Why you are associated with this company, what influences you to buy a
policy?
 Good return  Service
 Advertisement  Celebrity endorser
 Others
12. How do you come to know about new policies of your insurance
Company?
 Agent\Advisors  Newspaper\Magazine
 Internet  Others
13. How do you think the private insurance companies are performing?
 Good  Fair
 Poor  Can’t say
14. Should the stake of foreign collaborator be hiked, If Yes why?

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15. What other services would you want from your insurance company?
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THANKING YOU

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