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INTRODUCTION

EXECUTIVE SUMMARY
Insurance is the pooling of fortuitous losses by transfer of such
risks to insures, who agree to provide other pecuniary benefits on their
occurrence, or to render services connected with the risk. It is the
transfer of financial responsibility for the risk at the point of

occurrence, and conventionally involves the insurer in a commitment to

pay. The insured is thus exchanging the uncertain cost of losses for
certain and known cost of the premium. The insurance services lead to
efficient and productive allocation of capital resources, facilitate
growth of trade and commerce, substitute for governments social
security programs, and assist individuals and firms in efficient
management of risks.

The insurance market may tremendously

improve as India represents huge untapped market.

However,

globalization will certainly increase insurance penetration and all

professional shall equip themselves to exploit the opportunities offered
by this sector.
A study titled Comparative Analysis and Trend Analysis of
Insurance Industry after Privatization- conducted at Bajaj Allianz Life
Insurance Company Private Limited, Bangalore, is held by seeing the
tectonic shift of insurance industry after privatization.
This study is an effort to give ideas to the people for their
investment decisions by showing a comparative analysis of various
companies and the future trend of the life insurance companies. At the
same time this study could be helpful to the company to see its position
in the industry and to find a way to improve its performance.
The study mainly aims to make a comprehensive study on
Indian insurance industry after privatization and the comparative
analysis of Allianz-Bajaj Life Insurance Company Limited vis--vis
the industry.
In order to build the above objective an attempt is made-

To study the existing business of insurance industry.

To study the awareness level towards insurance among the
people.
To study the impact of privatization on Indian insurance
business.
To study the behavior of existing customers in the industry
market.
To study the trend of private insurers in India.
In order to achieve the above mentioned objectives a primary
analytical survey was conducted by the researcher to collect the
primary data and questionnaire was prepared as an instrument of the
survey. Magazines, journals, books on insurance, dailies, previous
project reports made on similar field and websites were accessed to
get the secondary data. Chi-square test was done to test the
hypothesis on collected data. Data collected were finely tabulated and
deeply analyzed. Tables, graphs, charts are presented to give a clear
picture of the collected data.
The study finds that almost all the companies are unanimous
on this aspect that most of people are underinsured. It is surprising
fact that while calculating the insurance companies are not
considering existing savings of the people. Also most of the people
do not like to divulge their true net worth (including black money) so
while one may look underinsured whereas reality may be different.
Most of the people were found to be satisfied with their
insurers in urban area, none was found to be completely satisfied in

rural area, where only LIC exists. Service provided by LIC is found
to be less effective than private insurers in all cases.
Generally, people think that insurance in necessary for
everybody and but sometimes people of urban area like to have
more freedom on their investment decisions. People of rural area
want to be insured to get risk-cover of life and to make some
savings.
A Brief of the suggestions given by the researchers to the
company is as follows:
The life insurance companies have to calculate Human Life
Value (HLV) for everybody to know the net worth of insurance
policy that can be given to the individuals before selling any policy.
Since, rural population is more in India; the company should
concentrate equally to rural and urban population. More reputation
is needed for the company, as insurance policies are sold only on
reliability.
Advertisement can not sell insurance policies but through
advertisement people would be aware of the companys existence
which, in turn, would bring reliability, popularity, belief in peoples
mind.
Word of Mouth plays a great role in insurance industry, so
company has to give ultimate satisfaction to the existing customers
in order to retain them and get some more customers through them
Research shows that 30 years is the age range when people

should take insurance policies. Company should target this agegroup as this group people generally have money in hand and no
idea to invest their money.
So, as the face of life insurance in India is changing, with the
changes come a host of challenges, and it is only the credible
players with a long-term vision and a robust business strategy can
make an impact. Whatever the developments, the future of this
industry will surely be exciting.
2.1 BACKGROUND OF THE STUDY
Risk Management today has become a very complex and demanding
profession.

Risk managers have greater responsibilities than ever

before. Increasingly they are being asked to manage both risk and
opportunities with an eye on improving shareholder value.
The probability of something happening which is not going to have
favorable effect on its environment can be termed as risk. More the
probability higher the risk. Since the risk itself depends upon the
happening of a future event, one cannot assure himself that risk can be
entirely eliminated.

That is why to reduce the impact of that

unfavorable event; every enterprise tries to manage the risk so that its
impact may be minimized in case of happening of that event. Risk is a
burden not only to the individual but to the society as well. There exist
several techniques of meeting the problem of risk, of which insurance is
the most practical method for handling major risks. The commission
on Insurance Terminology of the American Risk and Insurance
Association has defined Insurance as follows:

 Insurance is the pooling of fortuitous losses by transfer of such risks

to insurers, who agree to indemnify insured for such losses, to provide
other pecuniary benefits on their occurrence, or to render services
connected with the risk.
Insurance is based on the principle of risk pooling. It is the transfer of
financial responsibility for the risk at the point of occurrence, and
conventionally involves the insurer in a commitment to pay. Provided
the terms and conditions of the policy are met, payment of the premium
secures a source of funds in the event of loss. The insured is thus
exchanging the uncertain cost of losses for the certain and known cost
of the premium. The cost arising from pure losses during the period of
cover are then fixed for the insured. The stabilization of loss costs
means that earnings are less susceptible to the effects of pure loss than
when these are retained.

HISTORY OF INSURANCE
The roots of insurance might be traced to Babylonia, where traders
were encouraged to assume the risks of the caravan trade through loans
that were repaid (with interest) only after the goods had arrived safely-a
practice resembling bottomry and given legal force in the Code of
Hammurabi (c.2100b.c).
With the growth of towns and trade in Europe, the medieval guilds
undertook to protect their members from loss by fire and shipwreck,
and to provide decent burial and support in sickness and poverty. By
the middle of the 14th century, as evidenced by the earliest known
insurance contract (Genoa, 1347), marine insurance was practically
universal among the maritime nations of Europe. In London, Lloyds
Coffee House (1688) was a place where merchants, ship owners, and
underwriters met to transact business. By the end of the 18 th century
Lloyds had progressed into one of the first modern insurance
companies. In 1693, the astronomer Edmond Halley constructed the
first mortality table, based on the statistical laws of mortality and
compound interest. The table corrected in the year 1756 by Joseph
Dodson, made it possible to scale the premium rate to age; previously
the rate had been the same for all ages.
Insurance developed rapidly with the growth of British commerce in
the 17th and 18th century. Prior to the formation of corporations devoted
solely to the business of writing insurance, policies were signed by a
number of individuals, each of whom wrote his name and the amount
of risk he was assuming underneath the insurance proposal, hence the
term underwriter. The first stock companies to engage in insurance

were chartered in England in 1720, and in 1735, the first insurance

company in the American colonies was found at Charleston, S.C Fire
insurance corporations were formed in New York City (1787) and in
Philadelphia (1794).

The Presbyterian Synod of Philadelphia

sponsored (1759) the first life insurance corporation in America, for the
benefit of Presbyterian ministers and their dependents. After 1840,
with the decline of religious prejudice against the practice, life
insurance entered a boom period.
classifying risks began.

In the 1830s the practice of

The New York fire of 1835 called attention to the need for adequate
reserves to meet unexpectedly large losses; Massachusetts was the first
state to require companies by law (1837) to maintain such reserves.
The great Chicago fire (1871) emphasized the costly nature of fires in
structurally dense modern cities. Reinsurance, whereby losses are
distributed among many companies, was devised to meet such
situations and is now common in other lines of insurance. The
Workmens Compensation Act of 1897 in Britain required employers to
insure their employees against industrial accidents. Public liability
insurance, fostered by legislation, made its appearance in the 1880s; it
attained major importance with advent of the automobile.HISTORY OF
INSURANCE IN INDIA
The Indian Insurance Industry is as old as it is in any other part of the
world. India had a number of foreign and Indian insurers operating in
the Indian market till the nationalization of the industry took place. In
the year 1818, the first of the insurance companies, Oriental Life
Insurance Company, was started by Europeans in India at Kolkata. In
1870, the first Indian Insurance Company, Bombay Mutual Life
Insurance was established.

In the same year (1870) the British

Government enacted The Insurance Act. In the year 1912, First

Indian Insurance Act was passed with an enactment again in 1938.
The reason for the nationalization of the industry are rather well known
and concerned mostly with the unethical practices adopted by some of
the players against the interests of the insurance consumers. In 1956,
245 Indian and foreign insurers and provident societies were taken over
by the central government and were nationalized.

Life Insurance

Corporation (LIC) was formed by an Act of Parliament, viz. LIC Act,

with a capital contribution of rupees five crores from the government of
India.

Nationalization has lent the industry solidity, growth and reach which is
un-paralleled. However, along with these achievements there also grew
a feeling of insensitivity to the needs of the market, tardiness in
adoption of modern practices to upgrade the public that the insurance
industry was not fully responsive to customer needs.
In April 1993, Government set up a high power committee headed by
Mr. R.N.Malhotra to suggest reforms in the insurance sector to make it
more efficient and competitive. Also, it was a hope of the committee
that such a broad basing of the industry will ensure a better penetration
of the insurance market of the country in terms of the Gross Domestic
Product, which remains at very low level in comparison to some of the
developing countries. The committee recommended the establishment
of a strong and effective insurance regulatory authority in the form of a
statutory autonomous board on the line of SEBI (Security Exchange
Board of India).In December 1999, the insurance sector was thrown
open to private sector, followed by the establishment of Insurance
Regulatory and Development Authority (IRDA) in April 2000.
realizing the vast potential in Indian market, companies all over the
globe rushed to find a foothold in the lucrative Indian market.
Evolution of technology and convergence of services witnessed the
insurance products being offered by banks also.

History of insurance in India

Important Milestones in the Life

Insurance Business in India

1818 Europeans started the

Oriental Life
Insurance Company in
Calcutta.
1870 The First Indian Insurance
Company-Bombay Mutual
Life Insurance.
1870 The British Government
Enacted
The Insurance Act.
1912 First Insurance Act was
passed with an enactment
again in 1938.

1912

The Indian Life

Assurance Companies Act
enacted as the first statute
to regulate the life
insurance business.

1928 The Indian insurance

Companies Act enacted to
enable the government to
collect statistical
information about both
life and non-life insurance
businesses.
1938 Earlier legislation
consolidated and amended
to by the Insurance Act
with the objective of
protecting the interests of
the insuring people.
1956 245 Indian and foreign
insurers and provident
societies taken over by
the central government
and nationalized. LIC
was formed by an Act of
Parliament, viz. LIC, Act,
1956, with a capital
contribution of Rs.5 crore
from the Government of
India.

The insurance landscape in India is in the process of change. Close to

foreign competition since nationalization in 1956, the Indian insurance
industry was run by the government for over 40 years through the LIC
that spanned the length and breadth of the country. While LIC had

done a commendable job in growing the industry, the task of making an

essential. Financial product such as life insurance available to the
masses left scope for several more companies to participate in the
arena.
Despite its more than teaming one billion population, India still has a
low insurance penetration of 1.95% of GDP, indication the extent of
underinsurance, 51st in the world. Only 22% of the insurable population
possesses life insurance. Although India boasts a gross domestic saving
rate of around 23%, less that 5% is spent on insurance. The estimate of
insurable population is Rupees 240 million.
Recognizing the huge potential of the market and the need to make
insurance, the international insurers Allianz of Germany, Prudential
and Standard Life of the United Kingdom, Sunlife of Canada and AIG,
Metlife and New York of the United States tied up with leading
companies in India holding 26% of the total paid-up equity capital to
reach out to this vast market. While four private sector companies had
underwritten life business during the financial year 2000-2001, the
number of private players competing for business during the year 20012002 increased to 11 and today the Indian insurance industry has over a
dozen private players, each of which is making strides in raising
awareness levels introducing innovative products, deserving the
attention of the customer, and increasing the penetration of life
insurance in the vastly underinsured country.
In this regard, entry of life insurance business requires a prospective
entity to bring Rupees 100 crores (Rs.1 billion) as a start up capital in
cash besides the stringent test or criteria set by the regulator IRDA.

The regulator has kept such a high requirement of capital so as to create

an entry barrier so that only serious and committed players enter this
business, who understand that it is a capital intensive business.
The success of the efforts in note-worthy private players have
captured 8% of new business premium income in two years of
operations and possibly the Indian insurance market is one of the fastest
growing markets. The industry is today slowly emerging from the
shadows of insurance being a synonym to Life Insurance Corporation
(LIC).

In the increasingly competitive environment, the corporation is likely to

face difficulties in maintaining the stupendous growth, recorded in the
year 2001-2002.
The profile on the Indian consumer is also evolving. Consumers are
increasingly more aware and are actively managing their financial
affairs. Today, while boundaries between various financial products are
blurring, people are increasingly looking not just at products, but at
integrated financial solutions that can offer stability of returns along
with total protection. A wide range of products, customer-focused
service and professional advice has become the mainstay of the
industry. With the heightened awareness comes a willingness to
evaluate life insurance as an integral part of the financial planning kit, a
significant change from the earlier attitude, where insurance was
purchased as a tax-saving tool.
No only has there has been a shift in the perception of life insurance,
but also in the way it is sold. From being a purely advisor-driven
business, the sector has seen the emergence of a number of channels,
including banc assurance, corporate agents and direct marketing. These
channels, though very new, are quickly gaining importance particularly
because they present customer multiple ways of approaching lifeinsurers.
There is also been a huge improvement in service attitude and delivery,
making the customer the focus of each initiative. Technology has
become to peoples aid, giving them a platform, the reach and ability to
service each customer seamlessly. Multiple touch points have emerged
contact centres, e-mail, facsimile, websites and of course snail-mail
which enable the customer to get in touch with insurance companies
quickly, easily and directly.
In this view the insurance-managers need to understand more about the
details that go into the formulation of insurance products to make it
attractive in a competitive market.
Overcoming challenges to
development requires leadership, commitment, creativity and
flexibility. For any private insurer, competing with LIC as well as with
other private insurers is not a cup of tea.

At the same time customers are also confused to invest their money in
any insurance company. On the products front, there is a wide range of
products with different premium rates and guaranteed returns of
different companies. Introduction of liquid, transparent and flexible
policies, with unit-linked products added more attractiveness with the
existing products. More the options, more the confusion in peoples
mind and there is a need of an analysis in this industry.
Hence, this study is carried out to put some light on different products
of major insurance companies and to find the trend of the private
insurers to help the customers in making their decision as well as the
company to perform well.

MAIN CONCEPTS OF LIFE INSURANCE PRODUCTS:

The life Insurance Products are called Plans of Insurance. The
plans, offered by all companies, are basically of four types.

a)

a)

Term Insurance

b)

Whole Life Insurance

c)

Endowment

d)

Annuities
Term Insurances:

Such a plan provides cover for a specified period or term only

also known as temporary assurance. The policy benefits are
only payable if the insured person dies during a specified
period. Premiums are low because majority of such contracts
do no result in payment (claim).
b)

Whole Life Insurance:

This contract has no fixed term. Premiums are paid up to death,
the sum assured becomes payable on death. Premiums can be
also paid for a limited term selected by the proposed.

c)

Endowment Policy:

An endowment plan provides for payment of sum assured at the

end of a specified term (maturity) or upon earlier death.
Technically, this plan is combination of term insurance and pure
endowment.
Pure endowment:
A pure endowment is a contract under which the benefit is
payable only if the life insured survives the term. No payment
is made if the insured dies during the term.
d)

Annuities:
A series of periodic payments to an annuitant (the person receiving
the benefit for life or on other agreed terms or conditions, in return
of single payment or a series of payment (premium) is called
annuity.

COMPANY PROFILE
Bajaj Allianz Life Insurance Company Private Limited is joint
venture between two leading conglomerates- Allianz AG and Bajaj
Auto Limited, the flagship company of Bajaj Group.

It is

characterized by global presence with a local focus and driven by

customer orientation to establish high earnings potential and financial
strength. Bajaj Allianz Life Insurance Co. Ltd was incorporated on
12th march 2001. the company received the Insurance Regulatory
and Development Authority (IRDA) Certificate of Registration (R3)
No 116 on 3rd August 2001 to conduct Life Insurance business in
India. The key to Allianzs success has been its ability to use its
global presence and experience while adapting to local market
conditions and develop customer-focused solutions. Under Indias
insurance regulations, a foreign insurer entering into a joint venture
with a local company is limited to a maximum ownership stake of
49%. The rest is owned by Bajaj Group.
Allianz AG is one of the largest global composite insurers with
operations over 110 years in over 70 countries through over 700
subsidiaries. In Asia Pacific alone, the Allianz Group is present in 18
markets. One of Europes most highly valued stock corporations,
Allianz is number one by gross written premiums and world number
two by market capitalization. It has assets under management worth
approximately 713 billion euros (US $633 billion).

Bajaj, an Rs.8000 crore group is a household name in India

with a strong brand image and brand loyalty, synonymous with
quality and customer focus. Bajaj Auto, the Rs.4000 crore auto giant
and the flagship company of Bajaj group, has been in operation for
over 55 years with over 15000 employees. It is the largest two and
three wheeler manufacturer in India and the fourth largest in the
world. It is rated AAA by Crisil.

STATEMENT OF THE PROBLEM

The insurance landscape in India is undergoing a tectonic shift.
The shift is dramatic and it is only because of the open-door decision
of India in the year 1999.
In pre-1999 scenario, since nationalization in 1956, the Indian
Insurance Industry was run by the government for over 40 years
through the LIC had done a commendable job in growing the
industry, still there was a need of other private insurance companies
to meet the satisfaction level of customers.
Post-1999 scenario sees a drastic change in terms of insurance
awareness among the people. As the number of private insurance
companies is increasing, varieties of products are offered to the
customers.

The boom in insurance industry brought a highly

competitive nature in the market. Benefits offered by each company

are not only traditional risk-cover but also many innovative, flexible
benefits like Rider are added which make the insurance policy to
be a competitive investment tool.
Having many insurance companies in the industry with
different attractive products, customers are really confused while
choosing their insurance plans and are even confused to choose one
particular company to invest their money. And a few years down the
line, there would be further more companies with many more

innovative products, which may lead the industry to a further more

complex situation.
This confusion among the people made the researcher to know
the actual picture of insurance industry, and as one among the strong
private insurers Allianz-Bajaj Insurance Company Limited was
chosen for conducting the study.
This study is an effort to give ideas to the people for their
investment decisions by showing a comparative analysis of various
companies and the future trend of the life insurance companies. At
the same time this study could be helpful to the company to see its
position in the industry and to find a way to improve its performance.

NEED AND IMPORTANCE OF THE STUDY

To study the existing insurance industry in India as a
whole.
To recognize the uniqueness of insurance among all other
investment instruments.
To know the reason behind the sudden shift in insurance
industry in India.
To see the impact of privatization on LIC (Life Insurance
Corporation).
To find out the awareness level of insurance, sector wise,
among the people of Bangalore.
To make a comparative analysis of different products of
various insurers for the sake of bringing awareness among
the people.
To see the trend of the insurance industry in Bangalore.
To see the position of Allianz-Bajaj Life Insurance
Company in Bangalore as well as in the industry.
To find out the trend of Allianz-Bajaj Life Insurance
Company in near future as one among the private
insurers.
To help people to make their investment decision on
insurance policy.
To determine the amount of insurance needed for
different individuals by calculating Human Life Value
(HLV).

OBJECTIVES OF THE STUDY

Primary:
The study mainly aims to make a comprehensive study on
Indian insurance industry after privatization and the comparative
analysis of Allianz-Bajaj Life Insurance Company Limited vis-vis the industry.
Secondary:
In order to the study the above objective an attempt is madeTo study the existing business of insurance industry.
To study the awareness level towards insurance
among the people.
To study the impact of privatization on Indian
insurance business.
To study the behavior of existing customers in the
industry.
To study the trend of private insurers in India.

LIMITATIONS OF THE STUDY

During the course of conducting the study the following
limitations were encountered.
Responses may be bias
The study was conducted according to the convenience
of the researcher. So, the samples collected may not giving
proper information.
Chances of non-response error
The researcher was found to face difficulty to get
responses from all the people.

Due to that reason, all the

information collected may not be perfect.

Time constraint
Due to the time factor more number of samples could
not be collected by the researcher.
The area of research is only limited to Bangalore city and
Anekal Taluk of Bangalore district.
The study is a one time study and may not be useful in the
future.
No study is devoid of limitation and honest and sincere effort
has been made to extract the best possible information.

PURPOSE

To find out the research gap.

To add additional theory to existing theory.
To know the previous findings.
To know the link between previous and current scenario.
The study was carried out to see the change in insurance
industry after privatization and to find out the trend of private
insurers. The purpose was even to find out the awareness level
regarding private insurers among the people of the different sectors
of Bangalore. This is an effort to give solution to the investors on
their investment decision regarding insurance.

METHODOLOGY
The literature was collected by:

Browsing different websites on Internet.

Visiting all major libraries in Bangalore.
Referring various articles, reports, journals, magazines
on insurance.
Referring several books on investment alternatives.
Referring different books and previous project reports in
college library.

CONCLUSION
The central concept in review of literature is data gathering.
So, review of literature is carried on. A researcher should carefully
scrutinize the available information and user her discretion to find out
whether the gathered data is adequate and sufficient for the problem,
one enquires. The data that are suitable for one enquiry may not be
found suitable in another enquiry. Hence, if the available data are
found unsuitable they should not be used by the researcher.
The previous project reports referred for this study are as follows:
Shabna.K of Mount Carmel Institute of Management,
Bangalore University, made a study on Portfolio Building
for Mutual Fund Investors- a study conducted at
Cholamandalam Investment and Finance Private Limited.
Her contribution is as follows:
The majority of the Indian investors are ready to take high
risk.
Age is one of the important demographic characteristics that
influence the investment habits.
Padmashree.B of K.K.E.C.S Institute of Management,
Bangalore University, made a study on Privatization of
Insurance in India- a study conducted at LIC of India,
Chikkodi.

Her contribution is as follows:

The private insurance companies spread huge amount of
money and management waste in training the agents.
People believed that HDFC provides premium waiver benefit
to the policy holders since it introduced many schemes. LIC
should introduce more number of schemes like private
insurers. They must become prominent in their work.
Priya.M of K.K.E.C.S Institute of Management, Bangalore
University, made study on Customer Perception and
Attitude towards investment in LIC in Bangalore
Her contribution is as follows:
From the survey it was observed that majority of the
customers i.e. 40% have ranked safety and reliability as the
somewhat important factor for choosing an insurance
company for investment.
From the survey it was that majority of the customers i.e.
66% perceive life policy as very important.

After reviewing all above project reports it is found that nobody held
such kind of research on the topic of present researcher ever before.

BENEFITS DERIVED FROM THE LITERATURE REVIEW

1. It facilitates to know
Types of Primary data.
Advantages of Primary data.
Disadvantages of Primary data.
Evaluation of Primary data.
2. It helps to know the following
Topic on which the similar research has been done.
Purpose of the earlier research.
Methodology adopted in earlier research.
Conclusion derived from earlier research.
3. It facilitates to know how this research is different from the earlier
one.
4. It helped the researcher to know the area in which more
concentration is needed i.e. (The area, which has been neglected
by the earlier researcher).
5. Helped in making this research more specific and precise there by
enabling analysis the problem systematically.

TYPE OF RESEARCH
The research is the systematic design, collection, analysis, and
reporting of data and findings relevant to a specific situation facing

the company.The type of research is Primary Analytical or Survey

Method.
The survey was conducted in and out of Bangalore city. The
data was collected by the researcher for the purpose of knowing the
penetration level of private insurers in rural and urban areas of
Bangalore and to find out the trend of private insurers.
SAMPLING TECHNIQUE
Stratified Random Sampling technique was adopted for
conducting the survey.The population was divided into two mutually
exclusive groups viz.

Urban and Rural areas of Bangalore and

simple random samples were drawn from each group.

Universe or Population:
City Bangalore for urban area survey and Anekal Taluk of
Bangalore District for rural area survey.
SAMPLE SIZE
The total sample size is 70, among which 50 samples were
collected from urban area of Bangalore city and 20 samples were

collected from rural area of Bangalore District like Chandapura,

Marsure of Anekal Taluk.
SAMPLE DESCRIPTION

70 samples were collected from different age groups, income

groups of different sectors. 50 urban area samples were collected
from different parts of Bangalore city like Jayanagar, Koramangala,
Madiwala, Jakksandra, Padmanavanagar, R.M Nagar, BTM Layout,
Rajajinagar, Indiranagar, Vijayanagar, Maruthinagar, Yalahanka, J.P
Nagar, Jalahalli, Balahalli, Anjanapura, S.G Palya, SBM Colony,
Viveknagar etc.20 rural area samples were collected from
Chandapura and Murusure of Anekal Taluk of Bangalore District.
INSTRUMENTAION TECHNIQUE
Questionnaire was designed as main instrument to conduct the
survey.A questionnaire consists of a set of questions presented to
respondents for their answers.

Because of its flexibility, the

questionnaire is by far the most common instrument used to collect

primary data.
The first part of the questionnaire consists of Investors Profile
or Socio Demographic Data Sheet or Personal Data Sheet like name,
age address, contact number, e-mail ID, marital status, number of
dependents and sector.

The second part of the questionnaire consists of 22 questions

on Investors Profile Regarding Insurance with or without different
options. Among the close-ended questions there are Dichotomous
questions which have two possible answers, Multiple Choice
questions which have three or more answers, Importance Scale
questions which rate the importance of some attribute and Rating

Scale questions which rate some attribute from Poor to

Excellent.
The areas covered under the questionnaire are financial status
of the people, investment status in insurance, factors affecting the
investment decisions, satisfaction level regarding the investment in
insurance and awareness level of different individual regarding
insurance. The researcher was able to get sufficient information by
using the questionnaire and the main instrument for conducting the
survey.
ACTUAL COLLECTION OF DATA
The study was done based on the collection of Primary and
Secondary data.
Primary Data:
These are data gathered for a specific purpose or for a specific
research project.

Secondary Data:
These are data that were collected for another purpose and
already exist somewhere. The researcher started her investigation by
first examining the secondary data to see whether her problem can be
partly or wholly solved without collecting primary data. Since the
secondary data were not sufficient to solve the entire problem
primary data were collected to fill the gap.

Survey method was adopted to get the relevant primary data

and Questionnaire was designed as an instrument of survey method.
Secondary Data was collected by:
Browsing different websites on Internet.
Visiting all major libraries in Bangalore.
Referring various articles, reports, journals, magazines
on insurance.
Referring several books on investment alternatives.
Referring different books and previous project reports in
college library.
TOOLS USED FOR TESTING OF HYPOTHESIS
Chi-square ( 2 ) test is used as the main statistical tool for
testing the hypothesis.

OTHER SOFTWARE USED FOR ANALYSING THE DATA

Microsoft Excel is the software used to show the Line-Graph,
Bar Graphs, and Pie Charts for the purpose of analyzing the data.

HYPOTHESIS
No.1

Ho : Insurance is depending on the rural and urban

people
H1 : Insurance is not depending on the rural and urban
people.

Factors
Insured
Not Insured
Total
Under Ho:

Rural
13
7
20

Urban
37
13
50

Total
50
20
70

N[ad-bc]2
2 =
(a+b) (c+d) (a+c) (b+d)
Where,

a=13, b=37, c=7, d=13

Follows with 1 Degree of freedom

Degree of freedom=df=(r-1) (c-1)=(2-2) (2-1) = 1
Where, r= Number of rows
C= Number of columns
So, 2 = 70[13*13) - (37*7)}2
50*20*20*50
= 70 [169-259]2
1000*1000
=
=

70*8100
1000*1000
567
1000

=
0.567
Level of significance = = 5%
2 tab value for 1 df, a @ 5%
Since 0.567 <3.81
2 cal < 2 tab
Therefore, Ho is accepted.
That means insurance is depending on rural as well as urban people.
Conclusion:

On the basis of statistics filed by individual insurers, it is noted

that 10 out of 11Companies have substantially performed in this area
and their percentage of policies issued in the rural sector is higher than
the 5% level mentioned for the first five years of operations. In some
cases companies had started their business during the close of the
previous accounting year. Where the requirement of policies issued was
higher than 5%, this has also been achieved.

No. 2:

Ho: There is no impact of LPG (Liberalization,

Privitisation, Globalisation) on LIC
Ho: There is an impact of LPG on LIC.
Very

Life Insurers
Private Insurers
LIC
Total

High
6
0
6

High
14
7
21

Average
16
37
53

Low
1
26
27

Very Low
0
5
5

Total
37
75
N=112

Expected Value + (Row Total*Column Total)/Grand Total

For private Insurers:

For LIC :

E(6) = (37*6)/112 = 2

E(0) =(75*6)/112 = 4

E(14) = (37*21)/112 = 7

E(7) =(75*21)/112 =14

E(16) = (37*53)/112 = 18

E(37) =(75*53)/112 =35

E(1) = (37*27)/112 = 9

E(26) =(75*27)/112 =18

E(0) = (37*5)/112 = 2

E(5)=(75*5)/112=3

Calculation of 2
O
6
14
16
1
0
0
7
37
26
5

E
2
7
18
9
2
4
14
35
18
3

(O-E)
4
7
-2
-8
-2
-4
-7
2
8
2

(O-E)2
16
49
4
64
4
16
49
4
64
4

(O-E)2/E
23
7
0.22
7.11
2
4
3.5
0.114
3.5
1.33

{(O-)2/E}=51.824
2 Cal {O-E)2/E=51.824
Degree of freedom = df = (r-1) (c-1) = 4
Where, r = Number of rows, c = Number of Columns
Level of Significance = a = 5%

 2 tab value for 4 df, a @ 5% = 9.48

Since, 51.824 >9.48
2 Cal > 2 tab
Reject Ho.
H1 is accepted.
Therefore, there is an impact of LPG (Liberalization, Privitisation,
Globalisation) on LIC.
Conclusion:
The industry is today slowly emerging from the shadows of
insurance being a synonym to Life Insurance Corporation.The fact
that the new players have as their co-promoter an insurance company
of proven repute and long life (often more than hundred years old)
strengthens the belief that the commitment of the new joint ventures
to the development of the insurance business in India as long term
strategy which will result in the growth of the economy. This belief is
real and achievable.

TABLE: PRESENTATION OF DATA

Introduction:
Primary:
The study mainly aims to make a comprehensive study on
Indian insurance industry after privatization and the comparative
analysis of Bajaj Allianz Life Insurance Company Limited vis--vis
the industry.
Secondary:
In order to build the above objective an attempt is made:
To study the existing business of insurance industry.
To study the awareness level towards insurance among the
people.
To study the impact of privatization on Indian insurance
business.
To study the behavior of existing customers in the industry
market.
To study the trend of private insurance in India.
All of the five objective of the study are dealt in detail in this
chapter. The data was collected by administrating questionnaires to
common public and was carefully tabulated. On the basis of the
analysis and reference are drawn. Charts, Graphs and diagrams
support the analysis wherever necessary.

Objective No.1
To study the existing business of insurance industry.
Table # 1
Table Showing Company wise investment Details of Life Insurance
Companies for the Year ending 31st March 2004.

Company
Name

Central
Governme
nt
Securoties

SG&Ogua
ranteed
Secutrities

Infrastruct
ure
Investmen
ts

Social
Sector
Investmen
t

Approved
Investmen
t

Other than
Approved
Investment

Total
Investmen
t

ING
Vysya

42.8

47.98

14.99

17.44

80.41

HDFC
Std: life

86.43

86.43

32.12

23.67

9.18

142.22

Birla
Sunlife

42.48

61.57

15.18

32.72

5.26

114.72

ICICI
Prudential

117.94

117.94

32.55

35.72

14.1

200.31

SBI Life

76.32

76.32

26.93

12.38

15.7

131.33

Om Kotak
life

59.82

73.71

23.57

45.83

12.64

143.11

Metlife

57.59

57.59

15.23

15.66

15.5

103.98

Bajaj
Allianz

73.45

73.45

24.44

38.51

0.26

136.66

Max New
York Life

42.19

106.93

27.17

27.67

168.76

10

LIC

128139

131400.7

20498.72

77046.29

16442

245387.7

11

Tata AIG

74.86

74.86

29.98

34.76

139.59

12

AMP
Sanmar

119.75

119.75

Total

128813.1

132177.5

20740.87

77450.38

16521.65

246868.6

No.

GRAPH # 1 A
Graph showing sector wise investment of life insurance as on 31.03.04

ANALYSIS:
From the above diagram, it is observed that 35% of premium
income is invested in SG & other guaranteed securities by the life
insurers, followed by 34% in Central Government securities.
INFERENCE:
From the data available, it is inferred that the money which the
life insurers collect from common people in term of premium, most
of that goes to Government securities which is said to be secure.

GRAPH # 1B
Graph showing the total investment of life insurance as on 31.03.04

ANALYSIS:
From the above diagram it is noticed that 99% of total
investment is made by LIC and the rest 1% is invested by all private
life insurers.
INFERENCE:
From the data available, it is inferred that major portion of total
investment is made by LIC.Private insurers are also investing their
money in Government Securities to be in safe side.

MARKET SHARE:
TABLE # 2
Table showing the market share of all the insurance companies in
percentage for the year 2003-2004.
Life Insurers
Tata AIG
Om kotak
Birla Sunlife
Max New York
ING Vysya
HDFC Standard Life
Metlife
Bajaj Allianz
ICICI Prudential
SBI Life
Aviva
AMP Sanmar
LIC
Total

Market Share
0.48
0.25
1.21
0.62
0.14
1.08
0.05
0.44
2.97
0.59
0.1
0.04
92.03
100

ANALYSIS:
From the above table, it is noticed that LIC has the market
share of 92% and other private insurers all together have the market
share of 8% during the year 2003-2004.Among them ICICI
Prudential holds the highest market share of nearly 3%, followed
Bajaj Allianz1.21%, Birla Sunlife 0.44% of total market being very
new in the industry.
INFERENCE:
From the source of data available, it is inferred that since over
40 years only LIC was there in Indian life insurance industry the
major market share is held by the LIC. Among the private Life
insurers ICICI Prudential holds the major market share.

GRAPH # 2
Graph showing the market share of all the insurance companies in
percentage for the year 2003-2004.

Table No. 3 Table Showing the market share of private insurers for the
year 2003-2004

Life Insurers
Tata AIG
Om kotak
Birla Sunlife
Max New york
ING Vysya
HDFC Standard Life
Metlife
Bajaj Allianz
ICICI Prudential
SBI Life
Aviva
AMP Sanmar
Total

Chart No. 3

Market Share
6
3
15
8
2
14
1
5
38
7
1
0
100

Analysis :
From the above table, it is observed that among the private life insurers
the major market
Share of 38% is held by ICICI Prudential, followed by Bajaj Allianz
5% and Birla sunlife 15%, HDFC Standard Life 14%.

Inference:
From the data available, it is inferred that being very new in the
industry Bajaj Allianz Company is doing well along with other
companies whose establishment were before Bajaj Allianz Company.

Premium Income :
Table No. 4: Table showing the premium income of private insurers
for the year 2003-004

Life Insurers
Tata AIG
Om kotak
Birla Sunlife
Max
Newyork
ING Vysya
HDFC
Standard Life
Metlife
Bajaj Allianz
ICICI
Prudential
SBI Life
AMP Sanmar
Total

Graph No.2

Premium Income(In
lakhs)
5975.22
3068.33
14956.9
7681.07
1747
13266.21
620.09
5378.39
36494.4
7275.16
460.42
98184.25

Analysis:
From the table, it is noticed that premium income during the year 200304 of all private insurance was Rs.96923.19 lakhs.ICICI Prudential
was having maximum

premium of Rs.36494.40Lakhs followed by

Bajaj Allianz Rs. 5378.39 and Max New York RS.7681.07

Inference:
From the data available, it is inferred that the business of private life
insurers has been
astonishing the last year.

Table No. 5 Table showing premium income of private insurers for the
year
2004 05
Life Insurers
Tata AIG
Om kotak
Birla Sunlife
Max Newyork
ING Vysya
HDFC Standard Life
Metlife
Bajaj Allianz
ICICI Prudential
SBI Life
AMP Sanmar
Total
Graph No : 3

Premium Income(In lakhs)

30022.07
37475.21
62128.31
22469.01
28162.46
48615.08
5603.71
86001.8
158408.46
48293.56
9118.44
536298.11

Analysis :
From the above table, it is noticed that during the year 2003-04, the
total premium income
Has jumped to Rs .536298.11 lakhs from the last year premium income
of Rs.98184 individually ICICI Prudential has earned Rs.158408.46
lakhs, followed by Bajaj allianz Rs.86001.80
Inference :
From the data available, it is inferred that the business of private life
insurers has been astonishing during the last year.

Number of Policies:
Table No. 6 showing the number of policies sold by private insurers
during the year 2004-2005
Private Life Insurers No of Policies
Tata AIG
228894
Om kotak
63468
Birla Sunlife
198370
Max Newyork
216671
ING Vysya
111141
HDFCStandard Life 206320
Metlife
46682
Bajaj Allianz
288191
ICICI Prudential
614673
SBI Life
129974
AMP Sanmar
35268
Aviva
83209
Total
2222861
Graph No. 6

Analysis :
From the above table, it is observed that among the private life insurers
ICICI Prudential has sold 214673 policies.& Followed by Bajaj Allianz
288191 policies.

Inference :
From the data available, it is inferred that Bajaj Allianz Company has
sold a good number of

policies in the last year, competing with

previously established companies.

Objective No 2
To study the awareness level towards insurance among the people.
Table No. 7: Table showing International Comparison of Insurance
Penetration
(Premiums as % of GDP-2000)
Countries
United State
Canada
Brazil
Mexico
Chile
United
Kingdom
Germany
France
Russia
Japan
South Korea
China
India
Malaysia
Indonesia
South Africa
Nigeria
Kenya
Australia

Total
8.76
6.55
2.11
1.72
4.07

Non-Life
4.28
3.28
1.75
0.85
1.15

Life
4.48
3.27
0.36
0.86
2.92

15.78
6.54
9.4
2.42
10.92
13.05
1.79
2.32
3.72
1.18
16.86
0.66
2.63
9.41

3.07
3.55
2.81
1.29
2.22
3.16
0.67
0.55
1.59
0.64
2.83
0.53
1.91
3.37

12.71
3
6.59
1.13
8.7
9.89
1.12
1.77
2.13
0.54
14.04
0.13
0.72
6.04

Graph No. 7

Analysis:
From the above table, it is noticed that the life insurance penetration in
India is only 1.77% of GDP of the year 2000, being very low. South
Africa has premium penetration of 14.04% followed by countries like
United Kingdom 12.71%, South Korea 9.89%, Japan 8.7%
Inference:
From the data available, it is inferred that most of the developed
countries have more
insurance penetration. India being fast developing country has to have
more insurance

penetration. More insurance awareness is needed among the people of

India.

Table No. 8: Table showing International Comparison of Insurance

Density
(Premiums Per Capita in USD-2000)

Countries
United State
Canada
Brazil
Mexico
Chile
United Kingdom
Germany
France
Russia
Japan
South Korea
China
India
Malaysia
Indonesia
South Africa
Nigeria
Kenya
Australia

Total
3152.1
1516.8
75.6
101.2
175.8
3759.2
1491.4
2051.1
41.8
3973.3
1234.1
15.2
9.9
150.9
8.6
472.1
2
8.9
1859.3

Non-Life
1540.7
759.6
62.7
50.4
49.7
730.7
808.2
613.7
22.3
808.2
298.5
5.7
2.3
64.6
4.6
79.1
1.6
6.5
665.8

Life
1611.4
757.2
12.9
50.8
126
3028.5
683
1437.4
19.5
3165.1
935.6
9.5
7.6
86.4
4
329.9
0.4
2.4
1193.5

Graph No. 8

Analysis:

From the table, it is observed that the insurance density 7.6. Japan has
insurance
density of 3165.1, followed by United Kingdom 3028.5.

Inference:
From the data available, it is inferred that premium density of India is
very low compare to the developed countries.

Q.4. Have you planed financially for your future?

Table No.9:
Table showing the nature of the respondents towards their financial
matter in future.
Factors
Yes
No.
Total
Chart No. 9

No. of respondents
43
7
50

Percentage
86
14
100

Analysis:
From the above table, it is that 86% of the respondents are found to
have they
Worry of their financial status in future 14% of them are yet to plan
financial for their future
Inference:
From the sources of data available, it is inferred that people of
Bangalore are aware of the
rising cost of life and are knowledgeable life enough to invest their
money in different
financial instruments so, there exist a huge market for insurance
companies to establish
their insurance plans as attractive instrument alternative.
Table No. 10:
Table showing behavioral pattern of the respondents of rural area
regarding finance
for future.

Factors
Yes
No.
Total

No. of respondents
14
2
20

Percentage
70
30
100

Chart No.10

Analysis :
From the above table it is clear that 70% of the respondents have
planned financially for
heir future. 30% of them have not yet planned for their future.
Inference:
From the data available, it is inferred that Rural area people are not
satisfactorily aware of all investment alternatives. Insurance companies

have to see that everybody plans for his/her future and takes insurance
policy to make his/her family financially.

Q.5.If yes, are you insured?

Table No. 11:
Table showing the penetration level of insurance in Bangalore city.

Factors

No. of respondents

Percentage

Yes

37

74

No.

13

26

Total

50

100

Chart No. 11

Analysis:

From the above table, it is noticed that 74% of the respondents are
insured and 26% of them are not insured.
Inference:
From the data available, it is inferred that insurance penetration in
Bangalore city is
satisfactory. Still insurance companies are expected to reduce the
percentage of non insured people.
Table No.12
Table showing insurance penetration in rural area.
Factors

No. of respondents

Percentage

Yes

13

65

No.

35

Total

20

100

Chart No. 12

Analysis:

From the above table, it is observed that 65% of the respondents are
insured, and 35% of
them are not insured.
Inference:
From the data available, it is inferred that in rural area insurance
penetration is comparatively low.
Table No. 13 :
Table showing customer rating of urban area for the factors of
Insurance.

Factors

Very High

High

Average

Low

Very Low

Total

Risk Cover

32

37

Security

20

13

37

Tax Shelter

6
18

23

37

14

37

Savings
Investments

12

15

37

Convenience

17

14

37

Return

20

10

37

Analysis:
From the above table, it is observed that out of 37 respondents have
taken insurance policy to cover the risk of their lives. 23 of them stated
that insurance is used to get some tax shelter. All of them stated that
security is in higher side in case of insurance. It can be even used for
some kind of savings cum investment. Return is said to be average in
case of Insurance.
Inference:
From the data available, it is inferred that insurance is not only the taxsaving tool but also serves the purpose of saving and investment.

Graph No. 13
Graph showing customer rating of urban area for the factors of
Insurance.

TABLE # 14
Table showing customer rating of rural area for the factors of Insurance.

Factors

Very High

High

Average

Low

Very Low

Total

Risk Cover

13

Security

13

Tax Shelter

13

Savings

13

Investments

13

Convenience

13

Return

10

13

ANALYSIS:
From the above table, it is observed that all 13 respondents
have taken insurance policy to cover the risk of their lives. All of
them stated that security is in higher side in case of insurance. It can
be even used for some kind of savings cum investment. Return is said
to be average in case of Insurance.
INFERENCE:
From the data available, it is inferred that insurance is not only
the tax-saving tool but also serves the purpose of saving and
investment. In rural area, since there were very few in numbers
having monthly family income of more than Rs.5000 insurance is not
used as tax saving tool.

GRAPH # 14
Graph showing customer rating of rural area for the factors of
Insurance.

TABLE # 15
Table showing different reasons of the respondents of Bangalore city
for not being insured.

Factors

No. of respondents

Percentage

Not aware of it

Lack of money

38.46

Doesn't satisfy you

23.07

No need

15.38

Planning to take

23.07

Any other

Total

13

100

ANALYSIS:
From the above table it is seen that 38.46% of the respondents
are not insured because of lack of money 23.07% of them are not
satisfied by the characteristics insurance policy, and other 23.07% of
them are planning to take the policy 15.38% of them think that it is
not needed.
INFERENCE:
By looking at the above table it is clear that people are all
aware of insurance even though they not insured. In some cases,
people prefer other investment instruments like equity to invest their
money, since they get more return from that.

GRAPH # 15
Graph showing different reasons of the respondents of Bangalore city
for not being insured.

TABLE # 16
Table showing the different reasons of the respondents for not being
insured in rural area.

Factors

No. of respondents

Percentage

Not aware of it

28.571

Lack of money

71.428

Doesn't satisfy you

No need

Planning to take

Any other

Total

100

ANALYSIS:
From the data collected, it is noticed that 71.428% of the
respondents are not aware of insurance and 28.57% of them are not
insured because of lack of money.
INFERENCE:
From the analysis, it is inferred that insurance is not taken by
the people because of lack of money and low awareness level.
Insurance is needed for everybody in rural area.

GRAPH # 16
Graph showing the different reasons of the respondents for not being
insured in rural area.

TABLE # 17
Table showing the need of in India of insurance according to the
respondents perception in Bangalore City.

Factors

No. of respondents

Percentage

Yes

36

72

No.

14

28

Total

50

100

ANALYSIS:
From the above table, it is observed that 72% of the
respondents think that insurance should be compulsory in India 28%
of them think that it should not be compulsory in India.
INFERENCE:
From the above table it is inferred that most of the people think
that insurance should be compulsory in India as it compulsory in
India as it cultivates the habit of saving and secures the lives.
Sometimes people like to have freedom on their investment decision
and they think insurance should not be compulsory in India.

GRAPH # 17

Graph showing the need of in India of insurance according to the

respondents perception in Bangalore City.

TABLE # 18
Table showing the perception of the respondents regarding the necessity
of insurance.

Factors

No. of respondents

Percentage

Yes

20

100

No.

Total

20

100

ANALYSIS:
From the above data, it is noticed that 100% of the respondents
are found to say that insurance is needed for everybody in India.
INFERENCE:
From the above analysis it is inferred that insurance is needed
for everybody in India, as complete security can be give to the family
and savings habit can be cultivated by investing money in insurance.
Everybody can be kept safe by taking insurance policy.

GRAPH # 18
Graph showing the perception of the respondents regarding the
necessity of insurance.

OBJECTIVE NO. 3:
To study the impact of the privatization on Indian insurance business.

TABLE # 19
Table showing premium income of LIC vis--vis the private Insurers in
the year 2003-04

Companies

Premium Income (Rs.in Lakhs)

LIC

1134299.12

Other Private Insurance

98184.25

Total

1232483.37

ANALYSIS:
From the above table, it is noticed that premium income of LIC
was Rs.1134299.12lakhs in the Year 2002-2003.Private life insurers
all together earned Rs.98184.25lakh premium income.
INFERENCE:
From the data available, it in inferred that private life insurance
slowly placed them in a good position as their premium income is
appreciable.

GRAPH # 19

Graph showing premium income of LIC vis--vis the private Insurers in

the year 2003-04.

TABLE # 20
Table showing the premium income if LIC vis--vis the private
insurers for the year 2003-04.

Companies

Premium Income (Rs. in Lakhs)

LIC

1978593.2

Other Private Insurance

536298.11

Total

2514891.31

ANALYSIS:
From the above table, it is noticed that LIC earned
Rs.1978593.2 lakhs during the last year and private life insurers
earned Rs.536298.11 lakhs.
INFERENCE:
From the data available, it is inferred that private life insurers
have captured a good market during the last year.

GRAPH # 20
Graph showing the premium income if LIC vis--vis the private
insurers for the year 2003-04.

TABLE # 21
Table showing the number of policies sold by LIC vis--vis the private
insurers during the year 2003-2004.

Life Insurers

No. of policies

LIC

24545583

Other Private Insurers

837107

Total

25382690

ANALYSIS:
From the above table, it is noticed that in the year 2003-2004
LIC s sold 24545583 policies whereas private life insurers have sold
837107 policies.
INFERENCE:
From the data available, it is inferred that even though LIC has
the history of over 40 years private insurers started grabbing the
market very fast.

GRAPH # 21
Graph showing the number of policies sold by LIC vis--vis the private
insurers during the year 2003-2004.

TABLE # 22
Table showing the penetration level of different insurance companies
among the respondents of Bangalore city.
Options

NO. of Respondents

Percentage

Bajaj Allianz

10.8

ICICI Prudential

13.57

Birla Sunlife

2.7

HDFC Standard Life

2.7

Tata AIG

2.7

LIC

25

68

Others

Total

37

100

ANALYSIS:
From the above table, it is depicted that nearly 68% of the
respondents are insured by LIC Rest of them i.e., 32% of them are
insured by different private insurance companies such as ICICI
Prudential, Bajaj Allianz, HDFC, Standard, Birla Sunlife Tata AIG.
Among 50 samples none of them was found to be insured by other
private insurers like Metlife, ING Vysya, Aviva etc.
INFERENCE:
From the data available, it is inferred that since LIC has its
history of ruling the insurance industry for over 40 years before
privatization most of the people are insured by LIC. But effort of
private players is also appreciable in urban area. Among the private
insurers ICICI Prudential, Bajaj Allianz is seemed to have good
position in the city.

GRAPH # 22
Graph showing the penetration level of different insurance companies
among the respondents of Bangalore city.

TABLE # 23
Table showing the responses of the respondents of rural area towards
different insurance companies.

Options

NO. of Respondents

Percentage

Bajaj Allianz

ICICI Prudential

Birla Sunlife

HDFC Standard Life

Tata AIG

LIC

13

100

Others

Total

13

100

ANALYSIS:
From the above table, it is noticed that 100% of the
respondents are insured by LIC. No other insurer is found in rural
area.
INFERENCE:
From the above table, it is seen that other than LIC, none of the
people is insured by any private insurer. There is no shadow of
private insurers in the rural area. There exist a huge market where
Bajaj Allianz company can been established as one among the major
private Insurers.

GRAPH # 23
Graph showing the responses of the respondents of rural area towards
different insurance companies.

Table # 24

Table showing customer rating for Bajaj Allianz in urban area.

Factors

Very High

High

Average

Low

Very Low

Total

Agent Pursuance

Attractive Benefits

Attractive Return

Low Premium

Reference

Service

Reputation

Convenience

ANALYSIS:
From the above table, it is observed that all 4 respondents have
taken insurance policy from the bajaj allianz Company Because of its
attractive benefits, attractive return and Low premium rate.
INFERENCE:
From the data available, it is inferred that Bajaj Allianz
Company has to have more number of centers to serve the customers
a better service. Reputation of the company has to be improved.

GRAPH # 24
Graph showing customer rating for Bajaj Allianz in urban area.

TABLE # 25
Table showing customer rating for ICICI Prudential in urban area.

Factors

Very
High

High

Average

Low

Very
Low

Total

Agent Pursuance

Attractive Benefits

Attractive Return

Low Premium

Reference

Service

Reputation

Convenience

ANALYSIS:
From the above table, it is observed that all 5 respondents have
taken insurance policy from ICICI Prudential because of its
reputation, service and convenience. Benefits return and premium
rate are average.
INFERENCE:
From the data available, it is inferred that reputation and
service of ICICI Prudential Company are good.

GRAPH # 25

Graph showing customer rating for ICICI Prudential in urban area.

TABLE # 26
Table showing customer rating for LIC in urban area.

Very
High

High

Average

Low

Very Low

Total

10

25

17

25

10

25

Low Premium

21

25

Reference

11

25

Service

10

25

Reputation

25

25

Convenience

10

25

Factors
Agent
Pursuance
Attractive
Benefits
Attractive
Return

ANALYSIS:
From the above table, it is observed that all 25 respondents
have taken insurance policy from LIC because of its reputation, and
convenience. Benefits return and premium rate are average and
service is stated to be poor of LIC.
INFERENCE:
From the data available, it is inferred that reputation is the
major reason to buy policy from LIC.

GRAPH # 26
Graph showing customer rating for LIC in urban area.

TABLE # 27
Table showing customer rating for LIC in rural area.
Factors

Very High

High

Average

Low

Very Low

Total

Agent Pursuance

13

Attractive Benefits

13

Attractive Return

10

13

Low Premium

13

Reference

10

13

Service

11

13

Reputation

13

13

Convenience

13

ANALYSIS:
From the above table, it is observed that all 13 respondents
have taken insurance policy from LIC because of its reputation and
convenience. Benefits return and premium rate are average and
service is stated to be poor of LIC.
INFERENCE:
From the data available, it is inferred that reputation is the
major reason to buy policy from LIC.

Graph No. 27
Graph showing customer rating for LIC in rural area.

TABLE # 28
Table showing the time of taking the policy of the respondents of
Bangalore City.
Factors

No. of respondents

Percentage

Just a year back

12

32.43

2-5 years back

15

40.54

6-10 years back

24.32

11 years back and above

2.7

Total

37

100

ANALYSIS:
From the above table, it is noticed that 40.54% and 32.43% of
the respondents have taken policies 2-5 years back and two to five
just a year back respectively 24.32% of them have taken the policies
6-1 years back and only 2.7% six to years of them have taken the
policies 11 years back and above.
INFERENCE:
From the data available, it is inferred that since most of them
respondents have taken policies recently LIC has faced competition
from private insurers.

GRAPH # 28
Graph showing the time of taking the policy of the respondents of
Bangalore City.

TABLE # 29
Table showing the time of taking the policy by the respondents of rural
area.
Factors

No. of respondents

Percentage

Just a year back

15.38

2-5 years back

46.15

6-10 years back

23.07

11 years back and above

15.38

Total

13

100

ANALYSIS:
From the above table, it is noticed that 46.15% and 23.07% of
the respondents have taken the policies 2-5 years back and six to ten
years back respectively 15.38% of them are taken the policies just a
years back and only 11% years back and above respectively.
INFERENCE:
From the source available, it is inferred that of the people are
taken policies two to five years back when there were very few
private insurances. So people had very few options of to take the
policies. That could be the main reason, why people of rural area are
taken policies only from LIC.

GRAPH # 29
Graph showing the time of taking the policy by the respondents of rural
area.

TABLE # 30
Table showing the satisfaction levels of the respondents of Bangalore
towards their insurers.

Factors

No. of respondents

Percentage

Completely Satisfied

13.51

Satisfied

30

81.08

Some What Satisfied

2.7

Not at all Satisfied

2.7

Total

37

100

ANALYSIS:
From the above table, it is depicted that 81.08% of the
respondents are satisfied with their insurers 13.51% of them are
completely satisfied and 207% of them are some what satisfied and
not at all satisfied.
INFERENCE:
From the data available, it is inferred that in urban area where
the existence of private insurance is noticeable, the level of
satisfaction is very high among the customers.

GRAPH # 30
Graph showing the satisfaction levels of the respondents of Bangalore
towards their insurers.

TABLE # 31
Table showing the satisfaction levels of the respondents of Rural Area
towards their insurers.

Factors

No. of respondents

Percentage

Completely Satisfied

Satisfied

10

76.92

Some What Satisfied

15.38

Not at all Satisfied

7.69

Total

13

100

ANALYSIS:
From the above table, it is depicted that 76.92% of the
respondents are satisfied with their insurers 13.38% and 7.69% of
them are some what satisfied and not at all satisfied by their insurer.
INFERENCE:
From the above analysis it is inferred that even though most of
the respondents are satisfied by their insurers but still there are
people who are some what satisfied and not at all satisfied by their
insurer.

GRAPH # 31
Graph showing the satisfaction levels of the respondents of Rural Area
towards their insurers.

TABLE # 32
Table showing the satisfaction level of the respondents of Bangalore
City towards the services of their insurers.

Factors

No. of respondents

Percentage

Excellent

2.7

Very Good

5.4

Good

32

86.486

Fair

2.7

Poor

2.7

Total

37

100

ANALYSIS:
From the above table, it is noticed that 86.48% of the
respondents feel the services of their insurers is Good 5.4% of
them feel that the service, is Very Good, 2.7% of them feel the
service is excellent, fair and Poor.
INFERENCE:
From the data available, it is inferred that the service of the
insurers is satisfactory in Bangalore city.

GRAPH # 32
Graph showing the satisfaction level of the respondents of Bangalore
City towards the services of their insurers.

TABLE # 33
Table showing the different level of satisfaction of the respondents
towards the services of their insurers.

Factors

No. of respondents

Percentage

Excellent

Very Good

Good

11

84.61

Fair

7.691

Poor

7.691

Total

13

100

ANALYSIS:
From the data collected, it is noticed that 84.61% of the
respondents are said to have good service from LIC 7.691% of them
are said to have fair and poor service from LIC. None of them was
said to have excellent and very good service from LIC.
INFERENCE:
From the data collected, it is inferred that the service offered
by LIC is average to satisfactory.

GRAPH # 33
Graph showing the different level of satisfaction of the respondents
towards the services of their insurers.

INSURANCE REPORT CARD

The year 2002-03 marked the end of the third financial year for
the private sector life insurers. During the year, Aviva Life was the
lone new entrant in the life segment, thereby taking the number of
insurers doing Life business to 13, inclusive of the public sector Life
Insurance Corporation of India (LIC).

The year witnessed tremendous growth in terms of private

insurers adding new business to their portfolio. However the overall
new business premium witnessed a decline vis--vis the financial
year 2001-02, as the impact of declining interest rates in the economy
percolated down to the insurance sector. With the interest rates
moving southwards, the insurers slowly withdrew policies with
guaranteed returns.
Overall the decline in new business was 18 percent with
premium underwritten at Rs.15, 13,993.75 lakh in the previous year.
Performance of the Private Sector insurers
An analysis of the new business figures furnished by the
insurers reveals that overall business captured by the twelve
companies grew to Rs.98,184.25 lakh from Rs.29,661,68 lakh,
exhibiting an increase of 231 percent.

Overall the private insurers market share increased from two

percent in the year 2001-02 to eight percent in the financial year
2003-04.
ICICI Prudential captured nearly three percent of the new
business underwritten, followed by Birla Sunlife and HDFC Standard
at 1.21 percent and 1.08 percent of the premium underwritten.

In terms of number of policies, while ICICI prudential had

issued approximately 2.45 lakh policies, HDFC Standard and Bajaj
Allianz followed with 1.25 lakh and 1.16 lakh policies respectively
(Allianzs market share in terms of premium was 0.44 percent).
In terms of premium underwritten in rural sector, SBI life led
with premium underwritten at Rs.504.21 lakh, followed by Metlife at
Rs.215 lakh. In terms of number of policies underwritten in rural
sector, ICICI Prudential led with 29,376 policies. In the social sector,
SBI Life again led with premium of Rs.3945 lakh and lives covered
at 37,478 lives.

OBJECTIVE NO. 4:
To study the behaviour of existing customers in the industry.
TABLE # 34
Table showing different categories of occupation of the respondents of
urban area.
Categories

No. of respondents

Percentage

Self Employed

20

40

Salaried

29

58

Others

Total

50

100

ANALYSIS:
From the above table, it is noticed that at 58% of the total
respondents were found to be salaried, 40% of them were self
employed. Among all the respondents only 2% were students.
INFERENCE:
From the above analysis, it is inferred that all the respondents
have some earnings and are financially capable of investing their
money in financial instrument to be financially sound in future.

GRAPH # 34
Graph showing different categories of occupation of the respondents of
urban area.

TABLE # 35

Table showing the different categories of respondents in rural area in

regard to their occupation.

Categories

No. of respondents

Percentage

Self Employed

12

60

Salaried

10

Others

30

Total

20

100

ANALYSIS:
From the above table, it is noticed that 60% of the respondents
are self employed 10% of them are salaried, 30% of them are
farmers.
INFERENCE:
From the data available, it is inferred that salaried people in
rural area are found to be very few in number.

GRAPH # 35

Graph showing the different categories of respondents in rural area in

regard to their occupation.

TABLE # 36
Table showing the number of respondents of different groups of
monthly family income in urban area.

Categories

No. of respondents

Percentage

Rs. 2500- 5000

11

22

Rs. 5001-10000

15

30

Rs.10001-15000

18

Rs.15001-20000

12

Rs. 20001- 25000

10

Rs. 25001- 30000

Rs. 30001 & Above

Total

50

100

ANALYSIS:
From the above table, shows it is noticed that most of the
respondents(30%) have monthly family income of Rs.5001-10000
and as the monthly family income higher the number of respondents
were found to few in number having monthly family income of more
than Rs.30000.
INFERENCE:
From the data available, it is inferred that thee is lack of
respondents from higher income group. There exists a potential
market of insurance companies in Bangalore city, since average
income of the city is high.

GRAPH # 36
Graph showing the number of respondents of different groups of
monthly family income in urban area.

TABLE # 37
Table showing different income groups of respondents in rural area.
Categories

No of respondents

Percentage (%)

Rs. 2500-5000

13

65

Rs. 5001-10000

25

Rs. 10001-15000

10

Rs. 15001-20000

Rs. 20001-25000

Rs. 25001-30000

Rs. 30001 & above

Total

20

100

ANALYSIS:
From the above table, it is observed that 65% of the
respondents have the earning of Rs.2500-5000, 25% of them earn
Rs.5001-10000 and 10% of them earn Rs.10001-15000.
INFERENCE:
From the above analysis it inferred that people of rural area
have the earning of below Rs.15000. Insurance companies have to
insure not only high earning people but also low earning people.

GRAPH # 37

Graph showing different income groups of respondents in rural area.

TABLE # 38
Table showing the different types policies taken by respondents of
Bangalore city.

Option

No. of Responses

Percentage

Whole life
Term Insurance

2
5

4.54
11.36

Endowment
Children's Policy

24
1

54.54
2.27

Money Back
Annuity

11
1

25
2.27

ULIP

Total

44

100

ANALYSIS:
From the above table, it is noticed that 54.54% of the
respondents have taken endowment policy,25% of them have taken
money back policy, 11.36% and 4.54% of them have taken term
insurance policy and whole life policy respectively.2.27% of them
have taken childrens policy and annuity and none of them has take
ULIP(Unit Link Insurance Policy).
INFERENCE:
From the data available, it is inferred that people are inclined
to endowment and money back policies. Along with these Bajaj
Allianze has to sell more whole life, term, children, annuity, policies,
ULIP is not at all known to the people, more publicity is needed for
such an attractive policy.

GRAPH # 38
Graph showing the different types policies taken by respondents of
Bangalore city.

TABLE # 39
Table showing the different types policies of the respondents of Rural
Area.
Option

No. of Responses

Percentage

Whole life

Term Insurance

6.25

Endowment

10

62.5

Children's Policy

Money Back

31.25

Annuity

ULIP

Total

16

100

ANALYSIS:
From the above table, it is noticed 62.5% of the respondents
are taken endowment policy, 31.25% of them are taken money back
policy and 6.25% of them are taken term insurance policy.
INFERENCE:
From the above analysis it is inferred that most of the
respondents have very less ideas about whole life childrens policy,
annuity, and ULIP. Public is needed for these attractive policies in
rural area endowment and money back policies are popular enough
among the people of rural area.

GRAPH # 39

Graph showing the different types policies of the respondents of Rural

Area.

TABLE # 40
Table showing the different terms of policies chosen by respondents of
Bangalore city.
Factors

No. of Responses

Percentage

5 years

6-10 years

11-15 years

10

16-20 years

24

60

21 years & above

Total

10
40

25
100

ANALYSIS:
From the above table it is depicted that 60% of the respondents
have chosen their policy term 16 years- 20 years of 25% of them
have chosen term of 21 years and above 10% and 5% of them have
chosen term of 11 years- 15 years and 6 years to 10 years
respectively. None of them has chosen the policy of 5 years.
INFERENCES:
From the data available, it is inferred that most of the people
choose long term policy to get risk-cover for a long period and as
term increases premium rate comes down.

GRAPH # 40
Graph showing the different terms of policies chosen by respondents of
Bangalore city.

TABLE # 41

Table showing the different terms of policies chosen by the respondents

of rural area.
Factors
5 years
6-10 years
11-15 years
16-20 years
21 years & above
Total

No. of Responses
0
3
3
7
0
13

Percentage
0
23.1
23.1
53.84
0
100

ANALYSIS:
From the above table, it is noticed that 53.84% of the
respondent have taken policy for the term of 16years to 20 years
23.1% of them have taken policies for 6 years to 10 years and
11years to 15 years.
INFERENCES:
From the above analysis it is inferred that insurance is treated
as long term investment instrument and as the term is increased
premium rate is come down.

GRAPH # 41

Graph showing the different terms of policies chosen by the

respondents of rural area.

TABLE # 42
Table showing the different modes of paying the premium of the
respondents of Bangalore city.

Factors

No. of Responses

Percentage

Annually

19

47.5

Half Yearly

12.5

Quarterly

12

30

Monthly

10

Total

40

100

ANALYSIS:
From the above table, it is noticed that 47.5% of the
respondents like to pay premium yearly, 30% of them pay premium
quarterly 12.5% and 10% of them pay premium half yearly and
monthly respectively.
INFERENCES:
From the data available, it is inferred that most of the people
pay premium yearly and quarterly. Salaried people pay premium by
monthly deduction from salary. Research shows that more lapse of
policy occurs in quarterly mode of paying the premium.

GRAPH # 42
Graph showing the different modes of paying the premium of the
respondents of Bangalore city.

TABLE # 43
Table showing the different modes of paying the premium chosen by
the respondents of rural area.
Factors

No. of Responses

Percentage

Annually

21.43

Half Yearly

57.14

Quarterly

21.43

Monthly

Total

14

100

ANALYSIS:
From the above table, it is seen that 57.14% of the respondents
have the yearly mode to pay the premium, 21.43%of them have
chosen annum & quarterly mode of paying the premium. None of
them pay premium monthly.
INFERENCES:
From the data available it is inferred that since there are very
few salaried people in rural area, the number of respondents for
monthly mode of paying the premium is low. Most of them are
comfortable to pay the premium half-yearly as it neither become a
big burden nor increase the headache of paying the premium every
three months.

GRAPH # 43
Graph showing the different modes of paying the premium chosen by
the respondents of rural area.

TABLE # 44
Table showing different premium payment term of the respondents of
Bangalore city.
Factors

No. of Responses

Percentage

Regular

34

91.89

Single

2.7

15years

2.7

Others

2.7

Total

37

100

ANALYSIS:
From the above table, it is noticed that 91.89% of the
respondents have chosen regular premium payment term, 5.40% have
chosen 16years and 2.70% have chosen 15 years term to pay the
premium. None of them has chosen single premium payment term.
INFERENCES:
From the data available, it is inferred that since in the case of
limited term of paying the premium, the total amount of premium is
condensed in limited term, the amount of premium looks high. And
high premium cannot be bearable by most of the people. So, people
usually choose regular or long term mode of payment term. In some
cases businessmen who are not sure about their earning capacity in
for future choose a limited term for paying the premium.

GRAPH # 44

Graph showing different premium payment term of the respondents of

Bangalore city.

TABLE # 45
Table showing the different terms chosen by the respondents of rural
area for paying the premium.
Factors

No. of Responses

Percentage

Regular

13

100

Single

15years

Others (16years)

Total

13

100

ANALYSIS:
From the above table, it is noticed that 100% of the
respondents pay premium regularly. None of them is found to pay
premium in limited term.
INFERENCES:
From the data available, it is inferred that since in case of
limited term of paying the premium the total amount of premium gets
condensed in limited term the amount of premium unaffordable by
the people of rural area, and usually they choose regular term of
paying the premium.

GRAPH # 45

Graph showing the different terms chosen by the respondents of rural

area for paying the premium.

TABLE # 46
Table showing different benefit opted by the respondents of Bangalore
city.

Factors
Family Income Benefit.
Critical Illness
Hospital Cases
Waiver of Premium
Accidental Death Benefit

No. of Responses
4
2
2
13
35

Percentage
4.65
2.32
2.32
15.11
40.69

Accidental Permanent total/Partial Disability

Extra cover
Total

26
4
86

30.23
4.65
100

ANALYSIS:
From the above table, it is noticed that 40.69%, 13.23% and
15.11% of the respondents have taken the benefits related to accident,
4.6% of them have taken family income and extra cover benefit.
2.32% of them have taken critical illness and hospital cash benefits.
INFERENCES:
Having a look at the table it is clear that people choose more of
those benefits which are related to some uncertainty to make their
family to be secured after such things happen. Generally people dont
go for the benefits like critical illness and hospital cash because the
possibility of getting any such critical illness is comparatively low
and normally a person does not need to get admitted in hospital every
year. Presently Bajaj Allianz Life insurance company is the only
company who provides family increase benefit and covers 11 critical
illnesses.

GRAPH # 46
Graph showing different benefit opted by the respondents of Bangalore
city.

TABLE # 47
Table showing different benefits chosen by the respondents of rural
area.
Factors
Family Income Benefit.
Critical Illness
Hospital Cases
Waiver of Premium
Accidental Death Benefit

No. of Responses
0
0
0
9
12

Percentage
0
0
0
26.47
35.29

Accidental Permanent total/Partial Disability

Extra cover
Total

13
0
34

38.23
0
100

ANALYSIS:
From the above table, it is noticed that 38.23% of the
respondents have chosen accidental permanent total/partial disability
benefit. 35.29% of them have chosen accidental death benefit and
26.47% of them have chosen waiver of premium. None of them was
found to have family income benefit. Critical illness benefit, hospital
cash and extra cover benefit.
INFERENCES:
From the above analysis it is inferred that most of the benefits,
which relate to some uncertainty, are chosen by the people, Nobody
was found to have family income benefit because presently Bajaj
Allianz company is the only one company which provides this
benefit and it is inferred from the analysis that nobody was insured
by any of the private insures. Critical illness and hospital cash and
extra cover benefits are not opted by anybody because possibility of
getting such illness is low.

GRAPH # 47
Graph showing different benefits chosen by the respondents of rural
area.

TABLE # 48
PRODUCTS AVAILABLE OF DIFFERENT COMPANIES
Name of the Life
Insurer
Bajaj Allianz Life
Insurance Co. Ltd.

AMP
sanmar
Assurance Co. Ltd.

Birla
Sunlife
Insurance Co. Ltd.

HDFC Standard
Life Insurance
Ltd.
ICICI
Prudential
Insurance Co. Ltd.

Name of the Products

(Brand Names)
Bajaj Allianz Cash care
Bajaj Allianz Life Time care
Child care
Swarna Vishranti
Invest Gain(up to quadruple
cover)
Bajaj Allianz risk care
Bajaj Allianz Term Care
Bajaj Allianz Group Risk Care
Bajaj Allianz Group Credit Care
Bajaj Allianz Group EDLIs Care
Dhana shree
Subha Shree
Yuva Shree
Nithya Shree
Raksha Shree
Group superannuation policy for
Canadian High Commission
Birla Sunlife Flexi Family
Shield Term Plan
Birla Sunlife Single Premium
Group Term Product
Birla Sunlife special endowment
Birla Sunlife Group protection
solutions
Birla Sunlife Young Scholar
Birla Sunlife group
Superannuation product
HDFC Group term insurance
HDFC Protection series
HDFC Immediate Annuity
HDFC Personal Pension Plan
HDFC Group Term Assurance
ICICI-Pru-Reassure
ICICI-Pru-Assure Invest
ICICI-Pru-Life Link
ICICI-Pru-Assure Invest
(revised)

Riders attached to the products

Critical illness Benefit
Accidental Death Benefit
Accidental Permanent
Total/Partial Disability Benefit
Waiver of Premium Benefit
Hospital Cash Benefit
Start of Life Benefit
Family income Benefit

Accidental Death and total and

permanent Disability rider
Critical Condition Rider.
Critical illness Rider
Accidental Death & Disability
Rider
Term Rider

Accelerated Sum assured

Accidental Death Benefit
Critical illness Benefit
Level term insurance
Accidental and disability
benefit
Major surgical assistance
cover
Critical Illness Cover
Income benefit rider

Name of the
Life Insurer
TaTa AIG Life
Insurance Co.
Ltd

Riders attached to the products

Name of Products
(Brand Names)
Group Term life
Group credit card term insurance
Protection plan
Assure one year lifetime plan-yearly
renewable convertible term plan
Assure lifetime to Age 60- Term to
age 60 plan
Assure Five years lifetime plan-5
yearly renewable convertible term
plan.
Assure 10 years / 15 years / 20
years / 25 years lifetime plans
10/15/20/25 years term plan
Assure 15 years lifetime ( with return
of premiums ) plan
Assure 5/10 years plan-SP
Group regular premium mortgage
Reducing term insurance plan
Group regular premium mortgage
Reducing term insurance plan
Group single premium personal loan
Reducing regular premium personal
loan
Reducing term insurance plan
Group regular premium personal loan
Reducing term insurance plan
Guaranteed issue 10 years
endowment
Plan non participating (Assure
Humrahi)
Tata AIG Comprehensive Gratuity
scheme
Tata AIG Comprehensive
supperannuation Policy-Defined
benefit
Tata AIG comprehensive
supperannuation policy-defined
contribution
Single premium immediate annuity
Option with return of premium
The achiever at 21
Assure career builder
The achiever at 18 assure pay master

Term cover rider

Accidental death benefit short scale
Permanently disability
Critical illness benefit-accelerated
benefit

Critical illness benefit-limp sum

benefit

ADD rider long scale

Term to 60 rider
10/15/20/25 year term rider

Name of the
Life Insurer
Ing
Vysya
Life Insurance
Co. Ltd.

Life Insurance
Corporation
of India

Max New
York
Life Insurance
Co.Ltd
Om
Kotak
Life Insurance
Co Ltd

Sbi
Life
Insurance Co
Ltd

Riders attached to the products

Name of Products
(Brand Names)
Reassuring life endowment plan
Fulfilling life anticipated whole life
plan
Maximizing life money back plan
Securing life rural endowment plan
Rewarding life whole of life plan
Generic group term insurance for
social sector

Term benefit
Accident Death & Disability
Rider Waiver of Premium

Term Rider
Khetihar Mazdoor Bima Yojana
Shiksha Sahayag Yogana
Bima Nivesh
New Jeevan Akshay-1
New Jeevan Dhara/Jevan
Suraksha
LICs Bima Plus Unit Linked
Insurance Policy
Jeevan Anand
New Bima Kiran
New Jeevan Shree
Group Term Insurance
Endowment to age 60
Children endowment
Kotak Endowment Plan
Kotak Money Back Plan
Kotak Insurance Bond
Kotak Gramin Bima Yojana
Kotak Term assurance plan
Kotak insurance bond new version
Kotak credit term group plan
Kotak investment assurance plan
Young Sanjeevan
Sukhjeevan
SBI Life Scholar
SBI Life-super Suraksha
Swarna Ganga
SBI Life-Credit Guard

Dread Disease rider

Accident Death & Disability
Rider waiver of Premium
Term cover
Accident Death Care
Permanent disability cover
Critical Illness Benefit
Waiver of Premium

Accidental Death and

Dismemberment Permanent
Disability Critical Illness.

OBJECTIVE NO.5
To study the trend of private insurers in India
TREND ANALYSIS
TABLE # 49
Table showing the growth of private Life Insurers.
Factors
Premium Income
Growth

2003-04
98184.25
-

2005-05
536298.1
48113.85

ANALYSIS:
From the source of data, it is observed that in the year 2004-05
growth was 48113.85 lakh.
INFERENCE:
From the above analysis, it is inferred that business of private
life insurers is in boom now. It is expected to grow tremendously in
future.
GRAPH # 49
Graph showing the growth of private Life Insurers.

TABLE # 50
Table showing the growth of Bajaj Allianz Company
Factors

2003-04

2005-05

Premium Income

17970.51

86001.8

Growth

68031.29

ANALYSIS:
From the data available, it noticed that during the year the
growth in premium income is Rs.68031.25.
INFERENCE:
From the above analysis, it is inferred that a tremendous
growth is seen by the company during the year.
GRAPH # 50
Table showing the growth of Bajaj Allianz Company

Estimation of Growth of Life Insurance Industry in India:

Life Insurance Statistics

Indian Population

1Billion

GDP as in 2000

Rs.20000Billion

Gross Domestic Savings as % of GDP

23%

Estimation of Insurable Population

Rs.240Million

The confederation of Indian Industry (CII) projected growth of

life insurance premium from Rs.350 billion at present to Rs.1400
billion by 2009 and pension funds from Rs.10 billion to Rs.140
billion.

CONCLUSION FROM THE ANALYSIS

The study mainly aimed to make a comprehensive study on

Indian insurance industry after privatization and comparative analysis
and trend of Bajaj Allianz Life Insurance Company Limited vis--vis
the industry. The study showed the existence of several life insurance
companies and various characteristics of life insurance policies.
The main objective of this work is successfully achieved by
analyzing the collected data. The data collected are carefully
tabulated and presented in tables and graphs, which would give the
clear picture about study.

CONCLUSIONS FROM THE STUDY

Almost all the companies are unanimous on this aspect that

most of people are underinsured. It is surprising fact that
while calculating the insurance companies are not
considering existing savings of the people. Also most of
the people do not like to divulge their true net worth
(including black money) so while one may look
underinsured whereas reality may be different.
Since in urban area the average monthly family income is
higher than that of rural area, the most important reason to
take policy is to avoid the tax in urban area.
In rural area, people go for insurance policy to get cover for
risk of life and to make some savings.
As the income increases people like to go for other
investment alternatives rather than insurance policy in order
to get more attractive return.
As income increases individuals become risk-lovers.
Awareness of insurance is satisfactory in Bangalore.
Individuals who have taken policies 5 years back, they were
bound to take from LIC only, since there was no other
private insurer.
Individuals are showing interest towards private insurers to
get more benefit, return and good service.

Among all type of policies only endowment & money back

policies are sold. People have no clear idea about other
policies offered by the insurers.
The mode, chosen by majority of the people to pay the
premium is quarterly mode.
In limited premium payment term the total premium gets
condensed in limited term and it seems to be higher. And
that is the reason most of the people choose regular term of
paying the premium.
Insurance policies are considered as long-term investment.
The benefits, related to some uncertainty are chosen by all
since, hospital cash & critical illness is not necessary for
all; people do not go for these benefits usually.
Most of the people were found to be satisfied with their
insurers in urban area, none was found to be completely
satisfied in rural area, where only LIC exists.
Service provided by LIC is found to be less effective than
private insurers in all cases.
Majority of those who are not insured are aware of
insurance. They generally do not have sufficient money to
save.
Generally, people think that insurance is necessary for
everybody and but sometimes people of urban area like to
have more freedom on their investment decisions. People
of

rural area want to be insured to get risk-cover of life and to

make some savings.
Also LIC is sitting on a strong kitty of almost Rs.3 lakh
crores of assets and is still one of the competing offerers in
terms of yield and is enjoying undisputed monopoly of
reliability. Cold war has started but the real was has yet to
begin in the insurance sector, which will definitely benefit
the common man.
The insurance sector plays a very vital role in the process of
economic development of any country.

It acts as mobilizer of

savings, as financial intermediary, as promoter of investment

activities, as stabilizer of financial markets and a risk manager.
Insurance services lead to efficient and productive allocation of
capital resources, facilitate growth of trade and commerce, substitute
for governments social security programs, and assist individuals and
firms in efficient management of risks.

The CEOs of major

companys world over have realized the need of adequate insurance

in all perceptible areas affecting their firms.

People may safely

observe that the insurance market may tremendously improve as

India represents a huge untapped market. Globalization will certainly
increase insurance penetration and all professionals should equip
themselves to exploit the opportunities offered by this sector.

IMPLICATIONS OF THE RESULT OF THE STUDY

The life insurance companies have to calculate Human Life

Value (HLV) for everybody to know the net worth of
insurance policy that can be given to the individuals before
selling any policy.
Since, rural population is more in India; the company
should concentrate equally to rural and urban population.
More reputation is needed for the company, as insurance
policies are sold only on reliability.
The company should make people aware of its attractive
products.
More customer care centers should be opened to provide
individual importance to the customers.
Company has to insure not only individuals also firms as a
whole.
Even though products are highly competitive and premium
rates are low there is a need of publicity.
Advertisement can not sell insurance policies but through
advertisement people would be aware of the companys
existence which, in turn, would bring reliability, popularity,
belief in peoples mind.

Word of Mouth plays a great role in insurance industry,

so company has to give ultimate satisfaction to the existing

customers in order to retain them and get some more

customers through them.
Lapsation is very common in insurance industry.
Insurance care consultants of the company have to take care
of the existing policy holders, remind the customers to pay
the premium. Research shows quarterly mode of paying the
premium causes more lapsation.
Research shows that 30 years is the age range when people
should take insurance policies. Company should target this
age-group as this group people generally have money in
hand and have no idea to invest their money.
Insurance care consultants should create a need of insurance
policy in a persons mind and should make him to think
about his future.
The companys pension plan called Swarna Vishranti has
to be more popular among the people.

SUGGESTIONS FOR FURTHER RESEARCH

Life Insurance Industry in India is presently at boom.
There are twelve companies with varieties of products playing in the

industry. Everyday new products are introduced which are more

flexible and attractive than even before. There are quite a lot of
scopes to hold research in this field.
A research can be held on recently introduced life insurance
products in the market.
A research can be held by taking any one type of policies like
endowment policy, money back policy, Childrens policy of
different companies to make a comparative analysis.
A research can be held on after-sale-service of different
insurance companies.
A research can be held on any product of the company to see
the acceptance level of that product in the market.
A research can be held on the launching strategies of new
products.
As the face of life insurance in India is changing, with the
changes come a host of challenges, and it is only the credible players
with a long-term vision and a robust business strategy can make an
impact. Whatever the developments, the future of this industry will
surely be exciting.

QUESTIONNAIRE
Few Moments of Yours.

I am a student of MBA carrying on my project study under

Bangalore University for Allianz Bajaj Life Insurance Company
Limited. I will be grateful if you could spare your precious time with
me in answering this questionnaire. I promise you that the information
collected here will be kept highly confidential and it is strictly for
academic purpose only.
Thanking you

Liya Mathew.

Please tick inside the box.

Investors Profile.
Name

: ___________________________________

Age

Address

: __________________________________
__________________________________

Contact No.

: (o) ________________________________
(R) ________________________________
(M) ________________________________

E-Mail ID
Marital Status

________________________________
: Single

Married

No. of Dependents

Sector

: Urban

Rural

1. Which of the following categories do you belong to?

a) Self employed

b) Salaried

c) Other specify ____________________

2. What is your nature of duty?
Please specify ______________________
3. Your Monthly Family Income?
a) Rs.2500-5000

e) Rs.20001-25000

b) Rs.5001-10000

f) Rs.25001-30000

c) Rs.10001-15000

g) Rs.30001 & Above

d) Rs.15001-20000

Investors Profile Regarding Insurance

4. Have you planned financially for your future?
a) Yes

b) No

5. If yes, are you insured?

a) Yes

b) No

6. If yes, rate the factors that you looked for while taking the policy.
Very High

High Average

Low Very Low

a) Risk Cover
b) Security
c) Tax Shelter
d) Savings
e) Investment
f) Convenience
g) Return
7. Who is your insurer?
a) Allianz Bajaj

b) L.I.C

c) ICICI

d) Birla Sunlife

e) HDFC

f) Tata AIG

g) Others Specify ______________________________

8. Rate the factors that prompted you to take the policy of that particular
company.
Very High High Average Low Very Low

a) Agent Pursuance
b) Attractive Benefit
c) Attractive Return
d) Low Premium
e) Reference
f) Service
g) Reputation
h) Convenience
9. When did you take the policy?
a) Just a year back

b) 2-5 years back

c) 6-10 years back

d) 11 years back & above

10. What type of policies did you take?

a) Whole Life

b) Term Insurance

d) Childrens Policy

e) Money Back

f) Annuity

g) ULIP

c) Endowment

11. What is the amount of sum assured?

Specify Rs. _________________
12. What is the amount of premium you are paying?
Specify Rs. ________________________

13. What is the mode of paying the premium?

a) Annually

b) Half Yearly

c) Quaterly

d) Monthly

14. What is your premium payment term?

a) Regular

b) Single

c) 15 Years

d) Others Specify ______________________________

15. What is the term of your policy?
a) 5 Years

b) 6-10 Years

d) 16-20 Years

c) 11-15 Years

e) 21 Years & above

16. What are the benefits do you get with your policy?
a) Family Income Benefit

b) Critical Illness

c) Hospital Cash

c) Waiver of Premium

17. How satisfied are you with your insurer?

a) Completely Satisfied

b) Satisfied

c) Somewhat Satisfied

d) Not satisfied

18. How do you feel about the service of your life-insurer?

a) Excellent

b) Very Good

c) Good

d) Fair

e) Poor

19. If you are not insured what would be the reason behind it?
a) Not aware of it

b) Lack of money

c) Doesnt Satisfy You

d) No Need

e) Planning to Take
f) Any other, Specify _________________________
20. Do you think that insurance should be compulsory for everyone
in India?
a) Yes

b) No

21. If Yes, why?

Please Specify ____________________________

BIBLIOGRAPHY

BOOKS:-

I.M PANDEY
Financial Management
8th Edition, Vikas Publications,
New Delhi, 2001.

 PRASANNA CHANDRA
Investment Analysis and Portfolio Management
Tata Mc-Graw Hill
Dr. B G SATYAPRASAD
Financial Management
2nd Edition, Himalaya Publications,
New Delhi, 2002.

MAGAZINES: THE CHARTERED ACCOUNTANT

Insurance Industry, June-2003,Volume-51,No. 12
Journal of the Institute of Chartered Accountants of India.

INSURANCE POST
OUTLOOK MONEY
INVESTMENT MONITOR
DALAL STREET

WEBSITES:www.irdaindia.org
www.moneycontrol.com

www.myiris.com
www.allianzbajaj.co.in
www.licindia.com

CERTIFICATE
This is to certify that the project entitled
INSURANCE BUSINESS UNDER
GLOBAL ENVIRONMENT WITH SPECIAL REFERENCE TO
BAJAJ ALLIANZ
Prepared and submitted by
LIYA MATHEW (Reg. no. 03ACCM6017)
In partial fulfillment for the award of the degree of
MASTER OF BUSNESS ADMINISTRATION (MBA)
Of Bangalore University, Bangalore under the guidance of
Mr. BABU. K
Is a record of bonafide work done by her in the
Academic year 2003 2005 at Al-Ameen Institute of
Management Studies.
This project has not previously formed the basis for the award of any
degree / diploma / Fellowship or other similar titles.
Place: Bangalore
Date:
Mrs. B A Anuradha
(Principal)

CERTIFICATE
This is to certify that the project entitled
INSURANCE BUSINESS UNDER
GLOBAL ENVIRONMENT WITH SPECIAL REFERENCE TO
BAJAJ ALLIANZ

In partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA),
Of Bangalore University
Is a bonafide work carried out by
LIYA MATHEW (Reg. No. 03ACCM6017)
Under my supervision and guidance.
The results embodied in this report have not been published or
submitted to any university for the award of any degree /
diploma / Fellowship or other similar titles.
Date:
Place: Bangalore

MR. BABU K
(PROJECT GUIDE)

To whomsoever it may concern

This is to certify that LIYA MATHEW, a student of
second year MBA, Al-Ameen Institute of Management
Studies, Bangalore has satisfactorily completed the project
work assigned to her. The project entitled Insurance Business
Under Global Environment. The project report has been duly

completed and a copy of the same has been submitted as

well.

Date: 31-May-2005
Place: Bangalore
Mr. Pranav Sisir
(Sales Team
Manager)

INSURANCE BUSINESS UNDER GLOBAL ENVIRONMENT

WITH SPECIAL REFERENCE TO BAJAJ ALLIANZ

A PROJECT REPORT
Submitted To Bangalore University in Partial Fulfillment for the Award of the
Degree Of

MASTER OF BUSINESS ADMINISTRATION

(MBA)
BY
LIYA MATHEW
(03ACCM6017)
Under The Guidance Of

MR. BABU K. MBA

AL-AMEEN INSTITUTE OF MANAGEMENT STUDIES

AFFILIATED TO BANGALORE UNIVERSITY
BANGALORE-560027
2003-2005

STUDENT DECLARATION
I hereby declare that the dissertation entitled Insurance
Business Under Global Environment With Special Reference
To Bajaj Allianz under the guidance of Mr. BABU K is my
original work. The conclusions and findings in this report are
based on the information collected by me.

I further declare that this dissertation has not been submitted to

any other university or Institution for the award of any degree.

Date:
Place: Bangalore
LIYA MATHEW

ACKNOWLEDGEMENT
The guidance and efforts of many people has resulted in
successful completion of this project. I wish to acknowledge my
sincere gratitude to all those who have helped me in some way or
other in this project.
I express my sincere thanks to Mrs. B A Anuradha, Principal
of Al-Ameen Institute of Management Studies for permitting me
to carry out the work and for her encouragement.
My heartiest thanks to Mr. BABU K, Internal Guide of AlAmeen Institute of Management Studies, for his invaluable
guidance through out this endeavor.
Finally I would like to thanks to my parents and friends for
helping me in all possible ways throughout this work.

Date :
Place: Bangalore
LIYA MATHEW

PAGE
INTRODUCTION

PAGE
BACKGROUND OF THE STUDY

HISTORY OF INSURANCE

HISTORY OF INSURANCE IN INDIA

COMPANY PROFILE

18

STATEMENT OF THE PROBLEM

20

NEED AND IMPORTANCE OF THE STUDY

22

OBJECTIVES OF THE STUDY

23

 LIMITATIONS OF THE STUDY

24

PAGE
PURPOSE

25

METHODOLOGY

26

CONCLUSION

27

BENEFITS DERIVED FROM REVIEW

29

PAGE
TYPES OF RESEARCH

30

SAMPLING TECHNIQUE

30

SAMPLE SIZE

30

SAMPLE DESCRIPTION

30

INSTRUMENTATION TECHNIQUE

31

ACTUAL COLLECTION OF DATA

32

TOOLS USED FOR TESTING HYPOTHESIS

33

 OTHER SOFTWARE USED FOR DATA ANALYSIS

34

PAGE
HYPOTHESIS

35

TABLE : PRESENTATION OF DATA

39

CONCLUSION FROM THE ANALYSIS

141

PAGE
CONCLUSION FROM THE STUDY

142

IMPLICATIONS OF THE RESULT OF THE STUDY

145

SUGGESTIONS FOR THE FURTHER RESEARCH

147

QUESTIONNAIRE

148

BIBLIOGRAPHY

154

TABLE OF CONTENTS

CHAPTER NO.
CHAPTER 1

PARTICULARS
EXECUTIVE SUMMARY

PAGE
1

CHAPTER 2

INTRODUCTION

CHAPTER 3

REVIEW OF LITERATURE

25

CHAPTER 4

METHODOLOGY

30

CHAPTER 5

PRESENTATIONS & ANALYSIS

CHAPTER 6

SUMMARY & CONCLUSION

35
142