A REPORT

ON
ANALYSIS OF CONSUMER PERCEPTION
TOWARDS
LIFE INSURANCE
By
Aakash Shaw
09BSHYD0533

Pnb Metlife
Peace of mind guaranteed

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A REPORT
ON
ANALYSIS OF CONSUMER PERCEPTION
TOWARDS LIFE INSURANCE

By
Aakash Shaw
ENROLLMENT NO.: 09BSHYD0533

A report submitted in partial fulfillment of the requirement of

MBA Program of IBS Hyderabad

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AUTHORISATION
The following Summer Project Report titled "Analysis of consumer perception towards Life Insurance
done by Aakash Shaw is hereby approved as a certified study in management carried out and presented in a
manner satisfactory to warrant its acceptance as a prerequisite for the award of Bachelor of Business
Management for which it has been submitted. It is understood that by this approval the undersigned do not
necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve
the Summer Internship Report only for the purpose it is submitted. This Summer Internship Report has the
requisite standard and to the best of my knowledge the work done in this report is authentic.

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ACKNOWLEDGEMENTS
At the end of my Summer Internship Program I would like to express my sincere appreciation to all those
people who made this learning experience worthwhile. My abundant and most heartfelt gratitude goes to Mr.
Vikas Kejriwal (Regional Manager Pnb Metlife) without whose authorization it would have not been
possible for me to perform my allotted task successfully and in such a passionate manner.

Further, I would like to give my special thanks to my Company guide Ms. Shradha Agarwal who helped me
to make this project and comprehend various concepts in a better way. Without her assistance, support and
advices the endeavor made would not have been possible. She always motivated me to put my best foot
forward by setting sky-scraping standards. Hence this project is a testament to the desire for gaining knowledge
that she has ignited in me.

I would like to express my gratefulness towards Dr. Sunil Bhardwaj sir (Faculty Guide) for extending his
helping hand to solve my problems and giving valuable suggestions during internship period.

I am also indebted to all the employees of Pnb Metlife India Pvt Ltd for giving me valuable information during
my project.

Finally I would like to thank all the people who gave their precious time to respond to the questionnaires and
hence helped me gaining valuable information and complete the survey successfully.

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EXECUTIVE SUMMARY
Indian insurance companies play a major role in the economy of India as well as on the lives of the people of
this country. As the population of India is getting more affluent and globalized these days, the insurance sector,
is growing at an enviable pace. There is an increase in responsiveness among the people about Life Insurance
and its nuances. With an increasing market, one can find the presence of good number of companies in the
Indian insurance market, which leads to stiff competition amongst them.
At present there are 22 private companies in the insurance sector. The success rate of any of these companies
will depend on the kind of strategy adopted by them due to the pressure of aggressive competition. Every
company has to think of something innovative and out of the box to provide to the customer.
Keeping this in mind, this study endeavors to understand the insurance industry and its nuances. The
study delves into the minds of consumer. To elucidate, it analyses consumers awareness about privatization,
their expectations from emerging private companies and whether private insurance companies have been able
to attain consumer confidence.
The project progresses by covering the products offered and strategies followed by Pnb Metlife. It also
covers the 7 Ps of service marketing and the marketing mix strategies in relation to Pnb Metlife. The SWOT
analysis of the company has been done along with competitive analysis.
A survey is conducted to find out the percentage of income saved by different age group. Different investment
alternatives available and fundamental criterion that people think about before investing in a Life Insurance
Policy are also analyzed. This survey would also help us to find out the presence of Pnb Metlife amongst the
people. The project also intends to find out if there is a gender bias involved in investing in Life Insurance or
not.
Finally the report is anticipated to cover how Pnb Metlife could experiment and introduce new groundbreaking rural products, pricing policy and the delivery channels to grab a larger pie of the underpenetrated rural India.
The value addition to the company would be:

The result of this research would help the company to have a better understanding about the consumers
perception towards life insurance.
The study categorizes consumers of different ages and income levels which will help the company to
identify and allocate apt strategies for respective levels of customers.
The study also enables the company to focus on the consumers preference and expectations on the
product which they offer.
In the period of 14 weeks, the business generated to the company was Rs. 1, 86,000 and 3 recruitments
with licensing.

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TABLE OF CONTENTS
Authorization

Acknowledgement

ii

Executive Summary

iii

1. Introduction

2.

10

1.1 What is Life Insurance

10

1.2 Kinds of Life Insurance

10

1.3 Scope of the study

11

1.4 Objectives of the study

11

1.5 Research Methodology

12

1.6 Limitations of the study

13

1.7 Literature Review

14

About Pnb Metlife

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15
2.1 Pnb Metlife Inc- A Global Brand
15
2.2 Pnb Metlife India
15
2.3 Company Profile

16

2.4 Management Team

17

2.5 Core Values

18

2.6 Vision and Mission

18

2.7 Pnb Metlife on a High

19

3.

2.8 Factors for success

23

2.9 Achievements and Accolades

23

2.10 Product Portfolio

24

Types of Life Insurance Products

28

3.1 Unit Linked Insurance Plan

28

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3.1.1 Types of ULIPs

3.1.2 Traditional plans versus ULIP

6.

30

3.1.3 ELSS versus ULIP

31

3.2 Single Premium investment plan

33

4. Tax Plan Assessment Year 2010-2011

5.

29

Marketing of Life Insurance

34
36

5.1 Application Form Filling

36

5.2 Sales Process

37

5.3 Distribution Channel

39

Marketing Strategies

40

6. 1Marketing splash of Pnb Metlife

40
6.1.1 FA Recruitment Activity

40

6.1.2 Cut Your Tax Campaign

41

6.2 Marketing Tools

41

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6.3 Marketing Problems

7. Marketing Concepts

42

7.1 Key Areas Of Concern ( 7 PS of Marketing)

42

7.2 Product Hierarchy

45

7.3 Customer Buying Behavior

46

7.4 Growing the business

47

7.5 SWOT Analysis

48

8. Industry Profile

9.

42

49

8.1 History of insurance

49

8.2 Insurance Industry in India

50

8.3 Need for Insurance

53

Underwriting
9.1 Types of Underwriting

55
55

9.1.1 Types of Risks

56

9.1.2 Financial Underwriting

56
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9.1.3 Medical Underwriting

58

10.

Life Insurance Claims

60

11.

Insurers and Rural India

61

12.

Competitive Analysis (2014)

63

13.

Practical Exposure

69

14.

13.1 Sales done during the project

70

13.2 In A Nutshell

71

Data Analysis

72

14.1 Segmentation of the respondents

72

14.2 Observations and interpretations

75

14.2.1 Savings of different age group

75

14.2.2 Different investment alternatives

76

14.2.3 Impact of privatization

79

14.2.4 Important parameters before

83

buying an insurance product

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14.2.5 To check if there is a gender bias

91

15.

Findings from the project

93

16.

Recommendations

94

17.

Conclusion

95

18.

References

96

19.

Annexure

24.

19.1 Questionnaire

102

19.2 Pamphlets designed

107

Glossary

109

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INTRODUCTION
Life insurance was initially designed to protect the income of families, particularly young families in the wealth
accumulation phase, in the event of the head of household's death. Today, life insurance is used for many
reasons, including wealth preservation and tax planning.
Life insurance provides the opportunity to protect oneself and the family from personal risk exposures like
repayment of debts after death, providing for a surviving spouse and children, fulfilling other economic goals
(such as putting their kids through college), leaving a charitable legacy, paying for funeral expenses, etc. Life
insurance protection is also important if a person is a business owner or a key person in someone else's
business, where his/her death (or his/her partner's death) might wreak financial havoc.
Life insurance is a great financial planning tool, but should never be thought of as a savings vehicle. In general,
there are often far better places to hold and grow money as one gets older.
Life insurance protection comes in many forms, and not all policies are created equal. While the death benefit
amounts may be the same, the costs, structure, durations, etc. vary tremendously across the types of policies.
Whole Life
Whole life insurance provides guaranteed insurance protection for the entire life of the insured, otherwise
known as permanent coverage. These policies carry a "cash value" component that grows tax deferred at a
contractually guaranteed amount (usually a low interest rate) until the contract is surrendered. The premiums
are usually level for the life of the insured and the death benefit is guaranteed for the insured's lifetime.
With whole life payments, part of the premium is applied toward the insurance portion of the policy, another
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part of the premium goes toward administrative expenses and the balance goes toward the investment, or cash,
portion of the policy. The interest accumulated through the investment portion of the policy is tax-free until it is
withdrawn (if that is allowed under the terms of the policy).
Universal Life
Universal Life Insurance, also known as flexible premium or adjustable life, is a variation of whole life
insurance. Like whole life, it is also a permanent policy providing cash value benefits based on current interest
rates. The feature that distinguishes this policy from its whole life cousin is that the premiums, cash values and
level amount of protection can each be adjusted up or down during the contract term as the insured's needs
change. Cash values earn an interest rate that is set periodically by the insurance company and is generally
guaranteed not to drop below a certain level.
Term Life
One of the most frequently used policies is Term Life insurance. Term insurance can help protect the
beneficiaries against financial loss resulting from the death; it pays the face amount of the policy, but only
provides protection for a definite, but limited, amount of time. Term policies do not build cash values and the
maximum term period is usually 30 years. Term policies are useful when there is a limited time needed for
protection and when the dollars available for coverage are limited. The premiums for these types of policies are
significantly lower than the costs for whole life. Unfortunately, the cost of premiums increases as the policy
owner gets older and as the end of the specified term nears.

SCOPE OF THE STUDY

The result of this research would help the company to have a better understanding about the consumers
perception towards life insurance.

The study helps the company by creating awareness about the consumers of different ages and income
levels.

The study also enables the company to focus the consumers preferences and expectations on the
product which they offer.

OBJECTIVES OF THE STUDY

To understand the impact of privatization in the Indian insurance industry.

To know about the various Investment alternatives that is mostly preferred by the
people.
To find out the important criteria that people think about before investing in a life
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Insurance policy.
To find out whether gender bias is involved in investing in life insurance or not.

RESEARCH METHODOLOGY
THE STUDY
The study was exploratory in nature with survey method being used to complete the study.
SAMPLING DESIGN
POPULATION:
The population included educated working class in Kolkata .
SAMPLING TECHNIQUE
The sampling technique that was adapted to conduct the survey was Convenient Random Sampling. The
survey was conducted by visiting different places like different banks, schools and corporate offices.
SAMPLE SIZE
Sample size was 150 respondents.

TOOLS USED FOR DATA COLLECTION

Self designed questionnaire was used for the evaluation of factors affecting consumers perception towards
insurance.

TOOLS USED FOR DATA ANALYSIS

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Simple percentage analysis, ranking method, factor analysis, discriminant analysis and chi-square are the main
statistical tool used for the study.
SIMPLE PERCENTAGE ANALYSIS
Percentage refers o a special kind of ratio in making comparison between two or more data and to describe
relationships. Percentage can also be used to compare the relation terms between two or more sources of data.
Percentage of respondents =

Number of respondents * 100

Total respondents
This method was used to find out the percentage of income usually saved by people of different age group.
RANKING METHOD
This technique was used to rank out the opinion about the consumers preference towards different investment
alternatives. The order of merit given by the respondents was converted into ranks on the basis of the modal
frequency.
FACTOR ANALYSIS
Factor analysis is used to uncover the latent structure (dimensions) of a set of variables. It reduces attribute
space from a larger number of variables to a smaller number of factors and as such is a "non-dependent"
procedure (that is, it does not assume a dependent variable is specified).
DISCRIMINANT ANALYSIS
Discriminant analysis is a technique use to build a predictive model of group membership based on observed
characteristics of each case. Discriminant analysis generate functions from a sample of cases for which group
membership is known; the functions can then be applied to new cases with measurements for the predictor
variables but unknown group membership.
CHI-SQUARE TEST
Chi Square is a statistical measure used in the context of sampling analysis for comparing the variance to a
theoretical variance. In order to judge the significance of association between two attributes, we make use of
chi square test by finding the values of chi square using the chi square distribution.

LIMITATIONS

The sample size of the study is only 150. This would not represent the true picture.
The research got confined to the city of Kolkata. The respondent belonged only to Kolkata and not
others who were out of Kolkata.
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Nearly 76% of the respondent belonged to the age group of 20-50 years and only 24% were above 50
years. So, the responses and the opinions of the experienced and aged were not available. So, the
findings may not be correct when we think about the opinion of the elderly people about the life
insurance.
The competitive analysis is done for the year 2014 but this assessment is dynamic in nature as the
industry scenario changes rapidly.

LITERATURE REVIEW
1) Gupta (1996) says that insurance sector reforms are a part of the governments priorities. A package of
reforms is very much in the offering. There is an immediate need of a regulatory framework to open up
the insurance industry. Jha (1999) comments that improvement in life span and advancement in medical
science have changed customers needs for insurance products worldwide. The focus of the insurers in
matured markets of the West has shifted to pension, health care and protection products.
2) Hasanbanu and Nagajyothi (2007) argue that there is a significant relationship between age,
educational qualification, gender, occupation, income of respondents and their level of investment,
while taking LIC policies, further concluding that there is no significant relation between marital status,
family type, family size and level of investment, while taking LIC policies.
3) Joseph et al, 2003
It has been observed that insurance agents should constantly monitor the level of satisfaction among
his/her customers to keep themselves close to the customers for fulfilling their needs.
4) Tam and Wong,2001
Customer satisfaction and the salespersons orientation significantly influences the future business
opportunities and as the salespersons are able to enhance their relations with their clients as clients are
more satisfied and are willing to trust and thus secures the long term demand for the services.
5) Headen & Lee (1974) studied the effects of short run financial market behavior and consumer
expectations on purchase of ordinary life insurance and developed structural determinants of life
insurance demand. They concluded that life insurance demand is inelastic and positively affected by
change in consumer sentiments; interest rates playing a role in the short run as well as in the long run.

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Pnb Metlife Inc- A GLOBAL

BRAND
With over 140 years of experience, the Pnb Metlife companies are a leading innovator and a recognized leader
in protection planning and retirement and savings solutions around the world. It has established a strong
presence in the Americas, Europe and Asia Pacific through organic growth, acquisitions, joint ventures and
other partnerships. It is strengthening the global brand Pnb Metlife by extending core products and
competencies to markets around the world which is an important driver of growth for the enterprise.
Around the world, the Pnb Metlife companies offer life, accident and health insurance, retirement and savings
and reinsurance products through agents, third-party distributors such as banks and brokers, and direct
marketing channels. They work with families, corporations and governments to provide them with solutions
that offer financial guarantees in their lives. The name is recognized and trusted by more than 70 million
customers worldwide and over 90 of top 100 FORTUNE 500 companies in the United States. They have the
experience, global resources and vision to provide financial certainties for an uncertain world.
Pnb Metlife Ranked 39 on the FORTUNE 500 list 2008.
Ranked 6th In Fortune Magazine 2014 List of Americas Most Admired Companies
Named by Forbes magazine as The Best Managed Insurance Company in America (2008)

ABOUT Pnb Metlife INDIA

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Pnb Metlife India Insurance Company Limited (Pnb Metlife) is an affiliate of Pnb Metlife, Inc. and was
incorporated as a joint venture between Pnb Metlife International Holdings, Inc., The Jammu and Kashmir
Bank, M. Pallonji and Co. Private Limited and other private investors. Pnb Metlife commenced operations on
11th April, 2001. Pnb Metlife is one of the fastest growing life insurance companies in the country.
It serves its customers by offering a range of innovative products to individuals and group customers at more
than 700 locations through its bank partners and company-owned offices. Pnb Metlife has more than 55,000
Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country.
The company specialises in Individual, Health, Annuities, Group Insurance & Employee benefits. It provides a
comprehensive product portfolio based on researched customer needs.

PROFILE OF THE COMPANY

Year of Establishment:

11th April, 2001

Headquarter:

Brigade Seshamal,
5, Vani Vilas Road,
Baavanagudi,
Bangalore- 560 004.

Nature of Business:

Selling Insurance

Customer Service:

Number of Employees:

24 Hour Helpline Toll Free Number 1800-425-6969.

Convenient payment options.
SMS status
Medical network

More than 7800 employees

More than 69,000 employees
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Website:

www.pnb Metlife.co.in

Slogan:

Peace of mind guaranteed

Pnb Metlife INDIA

MANAGEMENT TEAM

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Figure 1

CORE VALUES

Integrity and Honesty

Financial Strength
Innovation
Partnership
Personal Responsibility
People Count

VISION AND MISSION

The vision of the company is:
To be a formidable player in the Indian Life Insurance Industry.
F- Fastest growing
O- Operationally the best
R- Responsive to customer
M- Market share growth
I- Innovative products
D- Dominant player
A- Agile processes
B- Brand with a guarantee
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L- Leader in new market

E- Employee talent best in class
The mission of the company is to work with utmost integrity, fairness and financial prudence in all its dealings.

FACTORS FOR SUCCESS

Strong parental support
Pnb Metlife India benefits from its parent companys global presence in the field of insurance, track record of
establishing successful insurance operations in emerging markets and the unique strengths of its other Indian
promoters. Strong parental support has enabled Pnb Metlife to quickly launch innovative products customised
specifically for Indian markets. For example, Pnb Metlife India has launched Met Smart Life, a universal
life insurance policy that combines elements of protection and accumulation simultaneously and provides ready
access to the accumulated cash value.

Using technology as business enabler

Pnb Metlife India has translated all its underwriting rules into a software module, Aura, to automatically
process an insurance proposal and issue the policy, both in medical and non-medical cases. The module ensures
quick turnaround time, in addition to consistency and accuracy of decisions. Focus on technology and
significant investments in training its sales-force have also helped Pnb Metlife in maintaining high standards of
customer service. This in turn has led to Pnb Metlife having one of the highest persistency ratios in the Indian
industry.

Using full-time agents on a commission basis to reduce fixed costs

Pnb Metlife India is focusing on building a strong network of professional agency representatives who will sell
its policies. Unlike other insurers, all Pnb Metlife agents are full-timers working on a commission basis. For
every 15 agents, Pnb Metlife has an agency manager. This has helped Pnb Metlife in keeping its fixed costs
low. Pnb Metlife India also launched a FA Recruitment Activity and hopes to reap benefits of higher market
penetration in the future.
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ACHIEVEMENTS
ACCOLADES

AND

Milestone Achievement 2014

1 million policies Issued consolidate Pnb Metlife as one of the fastest growing Life insurer in India.
The Assets Under Management (AUM) of Pnb Metlife India crossed Rs. 5000 crores as on Nov 23,
2014 representing an annualized growth of approximately 100%.
With the launch of MMIP (Met Monthly Income Plan), Pnb Metlife pioneers the niche
GUARANTEED MONTHLY INCOME space.
Entry into health insurance segment with Met Health Care.
Big bang in pure term insurance space with the cheapest advisor-assisted plan for non-smokers with
Met Suraksha Plus.

PRODUCT PORTFOLIO
Pnb Metlife India offers a range of innovative, customer-centric products that meet the needs of customers at
every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each
policyholder.

CHILD PLAN
Every parent would dream of fulfilling the child's need. Expenses are on the rise everyday, thus ensuring a
good future for the child in increasingly becoming difficult. The child insurance plans of Pnb Metlife secure the
future of the child such that you do not have to think tomorrow.

Met Bhavishya

A guaranteed money back plan that pays out funds to help one meet the education and career milestones of
their children. With this plan, the Life Insured is that of the parent. The plan also has inbuilt guaranteed
additions to add value to the policy over its term.
Met Junior Endowment
A flexible endowment plan that combines savings and security. For every parent, children's well-being
is the highest priority. So we offer a plan which offers both timely and efficient "Return on Investment".
Met Junior Money Back
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A plan which offers both timely and efficient "return on investment" with payouts at different
milestones
Met Magic Plus
A unit linked Non-Medical Regular Premium Life Insurance plan with which one can secure their
child's future. A flexible plan, Met Magic Plus provides the benefit of insurance protection to your
family, particularly your child, even when you are not around.

RETIREMENT PLAN
New beginnings, new joys and the opportunity to explore the unfulfilled dreams of the past - these are the
essential elements of a post retirement life. Financial independence is very important at this stage. The
exhaustive retirement plans of Pnb Metlife guarantee a financially secure retirement.
Met Growth
A Unit-Linked solution that helps to plan for the golden years. It is specially designed to provide
financial security for your future requirements. This plan allows to plan immediately by ensuring the
safety of the first year premiums. It also helps create the retirement fund faster by giving 100%
allocation from the second year onwards, coupled with attractive loyalty additions into your fund.
Met Pension Plus
A Unit Linked Pension Plan (Non Par), a plan that gives you this freedom to help you achieve your
aspirations by giving you return on investment and an opportunity to venture out in life, that you truly
deserve. Now, you can live life the way you want to, today and in the future.
Met Pension Plus, when you stop working for money and money starts working for you.
Met Pension-Par
Met Pension (Par) serves as a friendly helping hand so one can stay financially independent even after
retirement. It helps to build up a fund for golden years.

SAVINGS PLAN
Everybody dreams. And dreams can take any shape - be it the wedding of your child, buying a house or a car
and anything. The savings plans of Pnb Metlife help realize the dreams and secure the future.
Met Sukh
A guaranteed Money-Back Policy which provides guaranteed periodic survival benefits at the end of 5,
10, 15 & 20 years and guaranteed additions of 10% of the Sum Assured for the entire term. It not only
covers life, but also guarantees cash payments at various milestones along with guaranteed growth of
your savings.
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 Met Suvidha
A Flexible Endowment Plan that combines savings and security. In addition to providing protection till
the maturity of the plan, it helps to save for specific long term financial objectives. This long term
savings-cum-protection plan comes at affordable premiums.
Met Saral
A simple savings plan which gets a person into the savings habit without any medical tests. All one
needs to do is fill in a simple application form and they are ensured a guaranteed maturity amount of Rs
1,00,000, even in the case of their death during the term.

Met 100
A whole life policy where one pays premiums for 15, 20 or 25 years. It helps create a legacy for the
children, leaving money for a dependant spouse and, more importantly, provides insurance cover at
affordable rates.

PROTECTION PLAN
The protection plans of Pnb Metlife Insurance relieve you from the burden of home loans, EMIs and similar
responsibilities.
Met Suraksha
It is a life insurance plan that gives complete protection to enjoy life to the fullest. One can further
customize the plan with two riders Accidental Death Benefit and Critical Illness
Met Suraksha TROP
It is a life insurance plan that gives complete protection to enjoy life to the fullest. One can further
customize their plan with two riders Accidental Death Benefit and Critical Illness.
Met Suraksha Plus
It is designed for people who want to take care of their financial commitments, should anything
unfortunate happen, at a nominal cost. To put it simply, it is a life insurance plan that gives the complete
protection so that you one enjoy life to the fullest.

RURAL PLAN
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The rural plans of Pnb Metlife Insurance shield the loved ones against financial obligations and also assist you
to save for tomorrow. The rates of premium are quite affordable.
Met Vishwas
A single premium, micro insurance, non- participating term assurance plan which provides life cover at
a nominal cost. On survival, you get 110% or 125% of the premium.
Met Suvidha-Rural
A participating flexible Endowment Plan that combines savings and security. In addition to providing
protection up to maturity, it helps to save for specific long term financial objectives. This long term
savings-cum-protection plan comes at affordable premiums.

INVESTMENT PLAN
The Unit-Linked Insurance Plans of Pnb Metlife guarantees that your wealth is enhanced. Offering protection
and wealth optimization at the same time, they are customized to meet your requirements.
Met Easy Plus
A simplified unit-linked plan which offers an opportunity to systematically build wealth and protection.
Met Gold Plus
Unit-Linked wealth creation cum protection plan for the well-heeled, specially conceived so that you
can get a plan to match your own financial requirements.
Met Wealth Plus
A Unit Linked Life Insurance Plan (Non Par), that not only optimizes the return on investment but also
gives an option to guarantee the investments. This plan offers higher allocation of the premium for
investments which ensures more money is invested for higher wealth creation.
Met Smart Life
a Unit-Linked Whole Life Plan that helps you take care of long term financial needs. This plan covers
you up to 99 years of age and provides you the opinion of choosing Sum Assured multiples of up to 110
times the Annualized Premium thus providing you to the ideal balance between protection and
investment as your need be.
Met Fortune
A short term investment cum protection single premium plan which comes with a unique Return
Guarantee Fund -II, which guarantees the minimum NAV with an upside potential.

HEALTH PLAN
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Met Health Care is a long term health insurance plan from Pnb Metlife which covers the following:
1. Against Hospitalization disbursements by offering you a Daily Cash benefit.
2. Against 10 major vital illnesses by giving you a lump sums benefits.
3. Against Total & Permanent Disability due to accident by allowing you a lump sums benefits.

MONTHLY INCOME
Pnb Metlife offers 'Met Monthly Income Plan' a participating plan which guarantees a monthly regular
income when you are there and even if you are not there for 15 years or till end of the policy term. Moreover
you choose the monthly income that you want and we guarantee you that amount.

UNIT
PLAN

LINKED

INSURANCE

ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with
wealth creation opportunities. In ULIPs, a part of the investment goes towards providing life cover. The
residual portion of the ULIP is invested in a fund which in turn invests in stocks or bonds; the value of
investments alters with the performance of the underlying fund opted by you.
Simply put, ULIPs are structured in such that the protection element and the savings element are
distinguishable, and hence managed according to the specific needs. In this way, the ULIP plan offers
unprecedented flexibility and transparency.
ULIP offers:

Investment
Liquidity
Personal Account Benefit
Flexibility
Life Protection
Transparency
Savings
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Tax benefits
Choice

Figure 2

The pie-chart below illustrates the split of ULIP premium:

Figure 3

ULIP = Life Insurance + Mutual Fund

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MULTIPURPOSE

PROTECTION ACCUMULATION

RETIREMENT NEED

TYPES OF ULIP
TYPE I: Death benefit = Sum Assured or Fund Value ( whichever is higher)
TYPE II: Death benefit = Sum Assured + Fund Value ( both)

TRADITIONAL PRODUCTS VERSUS ULIP

FEATURES

TRADITIONAL PRODUCTS

ULIPs

Long Term

Short Medium Long

Risk Owner

Company

Customer

Returns

Inclined Towards Guarantee

Non Guaranteed

Transparency in
Investment

Low

High

Flexibility

Low

High

Time Horizon
Investment

of

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Liquidity of Money

Low

High

Loans

Allowed (if Applicable)

Not Allowed

Table 1

ELSS VERSUS ULIP

ULIP
Tax free
Contribution
Tax free
Income
Tax free
Maturity
Future
Investment
Annual
Returns
Lock in
Period
Maturity

Available

ELSS -Equity Linked Saving

Scheme
Available

Not Applicable

Available

Available

Available

Compulsion

Optional

Post Maturity
Investment
Allocation charge

15-40%
3 years

3 years

5-10 years

3 years

Not Available

Available

1st Year: 15-75%

Entry Load 2.25 % on

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Fund Management fee

NAV Calculation

2nd & 3rd Year: 5-15%

Onwards: 2.5-5%
0.75-1.5%

contribution

Effectively pre-deduction of
expenses

Net of all expenses

1.25 %

Table 2

ULIP GUIDELINES 2010

29 | P a g e

Figure 4

SINGLE PREMIUM
INVESTMENT PLAN
Fortune knocks at every mans door once in a life - Mark Twain
A single pay investment plan is the easiest plan to sell.
In 2000-2001, the contribution of single premium policies to the total sales of LIC was 7.8%. In 2014-2010 (till
January), this contribution has increased to 57%. There is a similar rise in the figures for other life insurance
companies as well. Single Premium plans are popular because:
Easy to understand.
No commitment beyond the first pay.
The benefits under the plan are ensured for the entire term
It is an easy buying process. Generally without requirement for medical tests.
The most popular savings instrument in India continues to be the ubiquitous fixed deposit. In 1990-91,
aggregate deposits stood at Rs. 1, 92,541 crores. In December 2014 this figure had grown to a whooping Rs.
42, 10,745 crores. That translates into a 20% CAGR for the last 18 years. Or a 21 times growth over 18 years.
Since a single premium investment plan resembles a fixed deposit very closely, this could be another reason for
its growth in popularity.
Pnb Metlife has the following single premium ULIPs currently available:
Met Wealth Plus Single Pay
30 | P a g e

Met Pension Plus Single Pay

Met Fortune

Pnb Metlifes unit linked funds have now completed 5 years. It is important to know the historical performance
of their various funds. While past performance is no guarantor or predictor of future performance, it is an
important input in the investment decision making process. A snapshot of the funds performance is given
below:
Five Year Return (as on 11th February 2010)

Preserver
Moderator
Balancer
Accelerator
Multiplier
Protector

INCEPTION DATE
10-Feb-05
8-Feb-05
8-Feb-05
7-Feb-05
7-Feb-05
4-Feb-05

NAV RETURN
6.05%
9.32%
12.70%
15.93%
16.57%
6.89%

Table 3

TAX PLAN ASSESSMENT

YEAR 2010-2011
Tax benefits are subject to changes in the tax laws. The basic terminologies to be remembered are:
ASSESSEE
A person by whom any tax or any other sum of money (penalty or interest) is payable under the Income Tax
Act.
ASSESSMENT YEAR
The financial year immediately following the previous year; 2010-11 is Assessment Year for Previous Year
2014-10.
PREVIOUS YEAR
The financial year in which the income is earned is known as the previous year. The financial year begins 01
April 1st and ends on 31 March.
DEDUCTION
Money paid from taxable income and reduced from the taxable income for tax calculations.
EXEMPTION
31 | P a g e

Money received but not included (exempted) as part of taxable income.

TYPES OF ASSESSEE

Figure 5
32 | P a g e

GOLDEN RULES

Figure 6

APPLICATION FORM FILLING

Certain points to be remembered while filling the application form are:

Only black pen to be used.

All corrections and changes to be countersigned.

Photocopy of proofs should be clear and attested.

Details of age mentioned in form should match with that mentioned in proofs.

Previous insurance details should be mentioned completely.

Family medical history should be recorded accurately.

Deformity questionnaire to be submitted if applicable.

Family members insurance should be mentioned

33 | P a g e

SALES PROCESS
STEPS IN A SALE:

34 | P a g e

Figure 7

1) PROSPECTING
Before we sell, we prospect. Prospecting is the conscious, directed and continuing activity of seeking,
observing and identifying people. The prospect would be one who has a need, who can qualify for the
coverage, who can afford the coverage and one who can be approached. The methods of prospecting
would be through networking, personal observation, central of influence and mo0st important referrals.
Out of these, referrals are the most valuable for the following reasons:

Referrals Fastens the Sales Cycle

You get Qualified Leads

Referrals Show More Trust on You

Referrals Extend the Network

Referrals Reduce Sales Expense

2) APPROACH AND FACT FINDING

Approach is the process after prospecting a customer in which we have to make an approach to the
customer for an appointment at his/her convenient time. The customer should be informed about the
companys name and advantages. Fact finding is the process of gathering relevant information about
prospects to identify his/her need. We need to find out the personal and family information, assets and
liabilities and household expenditure. We also try to gather subjective information of the client like his
attitude, level of risk capacity and financial goal.
3) SOLUTION
This is the step in which we have to find out the perfect product which will solve the requirement of the
customer. To present the solution, we should remember the AIDA model.
A-Attention
I-Interest
D-Desire
A-Action
This means first the advisor should try and gain the customers attention and then create an interest in him for
the product, then create a desire in him and then act.

35 | P a g e

TECHNIQUES FOR EFFECTIVE PRESENTATION

We should focus on relevant Product features & Benefits

We should keep our Client Involved by Asking questions
Insist all decision Makers are present
Show Benefits Illustrations, brouchers, Articles,
We should use influential names who took your services

DISTRIBUTION CHANNEL
Insurers market various insurance covers either directly or through various distribution channels. The marketer
in the distribution network is in direct interface with the prospect and the customer. Distribution channels in
insurance sector helps in increasing the penetration of insurance and helps in reducing the cost of insurers. It
also helps the company to retain and attract new customers to expand business.

1) BANCASSURANCE
Banks acting as corporate agents is known as bancassurance. Banks can sell the policies to their existing as
well as prospective clients. This is becoming quite popular these days and the bank earns huge fund based
income. Pnb Metlife is a pioneer in offering life insurance solutions through banks and alliances. The business
philosophy
at B&A is to leverage distribution synergies with their partners and add value to its customers and partners.
Flexibility, adaptation and experimenting with new ideas are the hallmarks of this channel.
The bancassurance channel partners of Pnb Metlife are:
o
o
o
o

Axis Bank
Barclays
J&K Bank
Karnataka Bank Ltd.
36 | P a g e

Dhanalakshmi Bank

2) CORPORATE PARTNERS
Any corporate may apply for license to sell insurance after complying with the requirements of IRDA.
The active partners of Pnb Metlife are:
o Geojit
o India Infoline
o Net worth stock broking
o Bajaj Capital
o Bonanza Insurance consultants.

3) BROKERS
They are like corporate agents with only difference that they can sell the products of more than one
insurance company. For example Srei.

4) AGENTS (FINANCIAL ADVISORS)

Agency is the largest distribution channel of Pnb Metlife comprising a large advisor force that targets
various customer segments. The strength of agency lies in an aggressive strategy of expanding and
procuring quality business. With focus on sales and people development, agency has emerged as a
robust, predictable and sustainable business model.
Anybody possessing the minimum qualification of 10+2 after completing 50 hrs of compliance sales
training given by Pnb Metlife approved by IRDA can sell life insurance products. These advisors work
under
the leadership of sales manager, who motivate them in every step by providing them guidance.

RECOMMENDATIONS:

Tie-ups with retailers like LIC and ICICI Prudential have with Suvidhaa Info serve.
Tie-ups with post offices is another delivery channel that is under exploration.
Max New Life has tie ups with microfinance institutions and non-gazatted organizations.
Financial Advisors generally have a tendency of joining a company and restricting themselves to selling
the products only to their friends and family. This way they get their commission and then leave the
company. Hence, it should be kept in mind to know the intention of the advisors while recruiting them.

37 | P a g e

MARKETING STRATEGIES

Developing a sound sales plan and management strategy

Developing strong and innovative distribution channel
Bancassurance
Brand building
Product Development
Public Relations and Internal Communication
Recruiting dynamic and high quality sales professional

MARKETING SPLASH OF PNB

METLIFE
FA RECRUITMENT ACTIVITY
Lead generation activity was launched in up-country locations (Gujarat, Haryana, Up, Kerala and Tamil Nadu)
with the objective of Financial Advisor recruitment. The activity showcased key benefits of association with
Pnb Metlife along with enhancing visibility about Pnb Metlife in smaller towns which can be serviced by a Pnb
Metlife branch within 30km radius and establishing brand salience. More than 2000 leads were generated
within four weeks of the launch.
The creative theme for the activity wasJoin the Pnb Metlife Family for a prosperous future
Another activity was done by my Company Guide and the employees working under her. This was done in
Howrah (Kolkata). We had put up a canopy and we distributed the pamphlets to people at random.
The activity proved to be beneficial as it helped us:
In recruiting potential advices
In creating a good database
Creating brand awareness
The creative theme for the activity wasAre you the next Met Royale???

CUT YOUR TAX, CAMPAIGN FOR CORPORATE

38 | P a g e

Leveraging the January, February and March quarter where the focus is on tax saving, Pnb Metlife launched
Cut your Tax, Campaign among Corporates. The key products in focus were Met Monthly Income Plan which
gives tax benefit under 80C and Met Health Care which gives tax benefit under 80D. More than 2000 leads
were collected during eight activities across five cities.
The creative theme for the activity wasCut Your TAX Worries and Ensure Your Take Home is more

MARKETING TOOLS
TELE MARKETING
Direct Marketing in which sales person uses telephone to solicit prospective customers to buy products and
services.

DATABASE MARKETING
Analyze customer database and use the results to form future projection that help to improve efficiency and
develop new products.

BANCASSURANCE
Selling of insurance through a banks established distribution channels. Pnb Metlife is penetrating in to the
rural market using Bancassurance medium only. The bancassurance channel partners of Pnb Metlife are:

Axis Bank
Barclays
J&K Bank
Karnataka Bank Ltd.

MARKETING PROBLEMS
The old and outdated technique of telemarketing is used to prospect customers. More modern techniques
should be adopted. The company must sponsor shows and give presentations in corporate houses.
39 | P a g e

Some of the main problems in marketing the policies are:

Large amount of competition (22 players)
Other brands are well advertised and have a better recall value.
LIC is considered a safer option.
Competition faced from mutual funds.
High premium policies are difficult to market.
Incorrect perception about insurance.
Short term plans are only available at large premiums.
Consumers dont want to take medical examination.
Large amount of documentation.

KEY AREAS OF CONCERN

The insurance business deals in selling services with the aim of building customer relation and generating
profit by creating customer satisfaction. Due weightage in the formation of marketing mix is to be given in the
insurance industry. The marketing mix that includes the 7Ps of service marketing are Product, Price, Place,
Promotion, People, Process and Physical evidence. The 7Ps can be used for marketing of insurance products in
the following manner:

PRODUCT
The core function of the marketing force of an insurance company is developing new products and generating
awareness about its product among the target customer. The company should keep in mind the individual
requirements of the customers in order to differentiate itself from its competitors.
The concept of riders, partial withdrawal benefit and other additional benefits has been a huge innovation in
Pnb Metlife, which has led to the customization of products suiting the individual needs. The accidental death
benefit rider, permanent disability rider and critical illness riders are worth mentioning.
The products introduced in the year 2010 are:

Met Gold Plus ( Jan )

Met Easy Plus ( Feb )
Met Magic Plus ( March )
Met Smart Life ( March )

PRICE
This is the price or amount that the customer needs to giveaway in exchange of the product or service that the
company is offering. Price of a product in insurance industry is defined by the amount of premium to be paid.
Any premium which is charged carries 3 components Investment that a customer makes,
40 | P a g e

 Companys expenses and

Charges.
The pricing of all the insurance products which has the Insurance cover is based on the Mortality Table and is
based on Mathematical and Statistical Data which again comes from the following calculation No. of people
dying at any particular age in a year/1000.

PLACE
It is one of the key elements, in the sense that the service provider should be easily accessible to the customer.
Locating an insurance branch depends on various facets like business area and smooth accessibility. Proper
management of the insurance branches is significant. The environment should be conducive and professional so
that the productivity increases. The branches should be technically equipped so that internal communication
becomes smooth.
Pnb Metlife serves its customers by offering a range of innovative products at more than 640 locations through
its bank partners and company-owned offices.
It has its office set in all the major cities of India.
With latest expansion Pnb Metlife, which is one of India's largest growing insurance companies, has increased
its presence in 13 of the 14 districts in Kerala. The company has now established a network of 27 branches
across 23 cities in Kerala.
The new branches would be opened in Kochi, Kottayam, Kannur, Thodupuzha, Kottarakkara, Adoor,
Kodungallur, Ottappalam, Perinthalmanna, Mavelikkara, Edappal and Irinjalakkuda.

PROMOTION
Promotion includes all the ways we tell your customers about our products or services and how we then market
and sell to them.
Pnb Metlife promotes itself majorly through advertisements and publicity through newspapers, business
magazines and television.
To promote any new product, Pnb Metlife organizes conferences and seminars .One major strategy is the
different kind of promotional activities that the company does .For example: In Kolkata pamphlets and
brochures are distributed early in the morning at large forums like Victoria memorial and other parks where the
denizens of Kolkata come for morning walks.
Large banners and canopies are set up in malls, exhibitions, trades, fares and kirtans as well. Publicity via
mobile phones and through internet is also a common practice.
Pnb Metlife brings in small changes in the way it promotes and sells its products which helps the company to
bring about dramatic changes in the results.

PEOPLE
A service industry involves high level of interaction. Building good customer relationship is very important in
an insurance sector.
Pnb Metlife imparts a lot of training on soft skills, product knowledge and competition analysis.
The training department is equipped with solutions that can help them conduct trainings simultaneously across
multiple locations, without actually traveling to those locations to increase effectiveness.
This helps in increasing the productivity of all its agents.
41 | P a g e

Pnb Metlife plans to hire 2000 sales manager and increase the number of financial advisors from 30000 to
60,000.

PROCESS
Pnb Metlife follows a very smooth and customer friendly process in delivering its services. The operation
department of Pnb Metlife provides quick and accurate payment to its clients.
In 2004, Operations & Technology focused on six strategic themes to increase the value of Pnb Metlife:
operational excellence, investing for growth and innovation, enhancing service delivery, modernizing
technology and increasing agility, gaining efficiencies, and improving quality and controls.

PHYSICAL DISTRIBUTION
Distribution channels in insurance sector helps in increasing the penetration of insurance and helps in reducing
the cost of insurers. It also helps the company to retain and attract new customers to expand business. The
distribution channel of Pnb Metlife consists of:
o
o
o
o

Bancassurance
Corporate Partners
Brokers
Agents

PRODUCT HIERARCHY
NEED FAMILY
The core need that underlies the product family.
Example: Security

PRODUCT FAMILY
All the product classes that can satisfy a core need with more or less effectiveness.
Example: Savings and Income

PRODUCT CLASS
A group of products within the product family that are recognized as having a certain functional coherence.
Example: Financial Instruments

PRODUCT LINE
42 | P a g e

A group of products within a product class that are closely related because they function in a similar manner, or
are sold to the same customer groups, or are marketed through the same kind of outlets, or fall within given
price ranges.
Example: Life Insurance

PRODUCT TYPE
Those items within a product line that share one of several possible forms of the product.
Example: Term Plans

BRAND
The name associated with one or more items in the product line that is used to identify the source or character
of the items.
Example: MET associated with different products of Pnb Metlife

ITEM
A distinct unit within a brand or product line that is distinguishable by size, service providing price appearance
or some other attribute. The item is called the stock keeping unit or product variant.
Example: Met Magic Plus

CUSTOMER
BEHAVIOUR

BUYING

Indian life Insurance industry being in nascent stage has been found very sensitive to myriads of issue
particularly in the case of buying pattern of consumers.

It is indispensable for a marketer to identify consumer buying behavior, so that he or she is in a better position
to target products and services at them. Buyer behavior is focused upon the needs of individuals, groups and
organizations. A consumers buying behavior is influenced by Psychological, Economical, Social and
Demographic factors.

PSYCHOLOGICAL FACTORS
Here purchase decision in influenced by those issues that affect the lifestyle of the consumer or in the other that
reflects the status. . For e.g.: purchase decision related to buying of car and that to Mercedes Benz. Talking
specifically about the insurance sector, here the customer will buy only that policy that has got high premium
43 | P a g e

or that type of policy which company is promoting to limited high-income level group only. For example, the
Met Monthly Income Plan where a client wants to pay for 5 years premium paying term and wants it for 5
years term then his yearly premium would be Rupees One Lakh Forty Nine Thousand Twelve.

ECONOMICAL FACTORS
These factors affect the purchase decision by influencing the issues pertaining to money and income level of
the individual. Consumer will buy only that policy which will not demand a huge premium from his income but
at the same time give a greater sum assured. For example, Met Suraksha which is a traditional plan whose
minimum annualised premium is rupees One Thousand One hundred.

SOCIAL FACTORS
Consumers are also influenced by social factors for example; reference group, family and social role and
status.

DEMOGRAPHICAL FACTORS
A consumers decision is also influenced by personal characteristics, for example buyers age, occupation,
gender, marital status and income level. It cannot be denied that buying decision of the individual who is
unmarried and is into business, having the income level of the range Rs. 2.5 lakh per annum, is into the age
group of say 25 years will have the entirely different approach towards purchase of the life insurance policy
with the individual who is into service and is married, is into the age group of, say 35, and is earning
Rs.3.5lakh per annum. Here the unmarried person with 2.5 lakh annual income would prefer a plan like Met
Easy which is a long term plan and where a coverage of 5 times is given. Whereas, the married person would
prefer a plan like Met Smart Life which gives lifelong coverage of 99 years. This plan would fulfill any kind of
requirements of the individual. It could be used as a retirement plan as well as child plan.

GROWING THE BUSINESS.

The secret lies in how to grow the business effectively. The strategies that Pnb Metlife can use to grow its
business:
1) Attract more new customers.
2) Increase the average sales amount.
3) Make the customers buy more often.
4) Hold on to the customers for life.

ATTRACT NEW CUSTOMERS

The insurance industry is facing an unprecedented number of business challenges brought on by a volatile
economy, diminishing investment returns and greater agent expectations. Intense competition and declining
44 | P a g e

loyalty are continually eroding insurers profitability. In this turbulent world, it is essential for insurance
companies to acquire new customers and retain existing ones.

Select a niche market that they can easily contact and dominate on it.
Expand their business horizons to rural areas.
Create a systematic referral program. The reasons referrals will be powerful is because it would
come from a credible-third party that has experienced first hand the benefits of the company.

INCREASE THE AVERAGE SALES AMOUNT

Up-sell their customers to high quality products and services.
Suggest top-ups and riders benefit that would compliment the customers purchase.

MAKE THE CUSTOMERS BUY MORE OFTEN

Establish ongoing communications with the customer.
Follow up with their customers to see how they are enjoying the benefits of the new product and
suggest products and services that would increase their satisfaction.
Track the customers buying pattern to suggest purchases right before they actually need them. For
example: suggesting a pension plan to a 40 year old customer.

HOLD ON TO THE CUSTOMERS FOR LIFE

Perform surveys with their customers from time to time to gauge their satisfaction.
Offer diversified product range to its existing customers.
Offer them gifts on special occasions like presenting the clients with a calendar of Pnb Metlife in
the new year.

SWOT ANALYSIS
STRENGTH

Paid up capital of Rs.1950 crores

More than 50,000 advisors
Quality Products and Services
Quality Distribution Channels
Strong Underwriting
Growth rate of 156%
Strong Brand Name
45 | P a g e

WEAKNESS
Limited market penetration
Low market share
FDI allowed only up to 26%

OPPORTUNITIES

Cross sell financial services are untapped

Untapped rural market
Brand and Line extension
Niche market
Opening of pension sector and establishment of new pension regulator

THREAT
New entrants.
Government Regulations and political situations.
Increasing interest rate.

HISTORY OF INSURANCE
The insurance industry in India over the past century has gone through big changes. In India this industry
reveals the 360 degree turn. 360 degree turn means that it started in India from being an open competitive
market to nationalization and back to a liberalized market again.
Insurance industry in India started as a fully private system with no restriction on foreign participation in the
Nineteenth Century. Before independence, a few British insurance companies dominated the Market. Life
insurance was first set up in India through a British company called the Oriental Life Insurance Company in
1818, followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society
in 1829.All of these companies operated in India but did not insure the lives of Indians. They were there
insuring the lives of Europeans living in India. Some of the companies that started later did provide insurance
for Indians. But, they were treated as "substandard" and therefore had to pay an extra premium of 20% or more.
46 | P a g e

The first company that had policies that could be bought by Indians with "fair value" was the Bombay Mutual
Life Assurance Society starting in 1871.
The first general insurance company, Triton Insurance Company Ltd., was established in 1850. It was owned
and operated by the British. The first general insurance company was the Indian Mercantile Insurance
Company Limited set up in Bombay in 1907.By 1938; the insurance market in India had nearly 176 companies
(both life and non-life).
After the independence, the industry went to the other extreme. It became a state-owned monopoly. The
industry started to witness a problem like fraud. Hence many regulations were put in place to reduce and
control the problems in the industry. After which Insurance was nationalized. In 1956, the then finance minister
S. D. Deshmukh announced nationalization of the life insurance business and then the general insurance
business was nationalized in 1972. Only in 1999 private insurance companies have been allowed back into the
business of insurance with a maximum of 26% of foreign holding.

INSURANCE
INDIA

INDUSTRY

IN

With the largest number of Life Insurance policies in force in the world, insurance happens to be a mega
opportunity in India. The Indian insurance market in spite of having a history covering almost two centuries
took a turn after the establishment of the Life insurance Corporation in India in 1956. From being an open
competitive market to being nationalized and then back to a liberalized market again, the insurance sector has
witnessed all aspects of contest.
The Indian insurance market traditionally focused around life insurance until recently, a various range of other
insurance policies covering sectors like medical, automobile, health and other classes falling under general
47 | P a g e

insurance came up, generally provided by the private companies. The life insurance of India added 4.1% to the
GDP of the economy in 2014, an immense growth since 1999, when the gates were opened for the private
company in the market. Indian life insurance industry is considered the fifth largest life insurance market, and
growing at a rapid pace of 32-34 per cent annually, according to the Life Insurance Council. This impressive
growth in the market has been driven by liberalization, with new players significantly enhancing product
awareness and promoting consumer education and information. The strong growth potential of the country has
also made international players to look at the Indian insurance market. Moreover, saturation of insurance
markets in many developed economies has made the Indian market more attractive for international insurance
players.
The total number of life insurers registered with the Insurance Regulatory Development Authority (IRDA) has
gone up to 23.
Some of the major insurance companies in public sector are:
Life Insurance Corporation (LIC) of India
National Insurance Company Limited
Oriental Insurance Limited

The insurance companies in Private sector are:

SERIA
L NO.

NAME OF THE
COMPANY

1.

Reliance Life Insurance

Company Limited.

2.

Aviva Life Insurance Co.

India Pvt. Ltd.

INDIAN
PROMOTER/
PARTNER
RELIANCE
GROUP(ADAG)
Dabur

FOREIGN
INSURER

FDI
(%)

None

Aviva (UK)

26

48 | P a g e

4.

Bajaj Allianz Life

Insurance Company
Limited
Birla Sun Life Insurance
Company Ltd.
HDFC Standard Life
Insurance Company Ltd.

HDFC

StandardLife
(UK)

18.9

5.

ICICI Prudential Life

Insurance Company Ltd.

ICICI Bank

Prudential (UK)

26

6.

Vysya Bank

ING Ins.
(Netherlands)

26

7.

ING Vysya Life

Insurance Company
Private Limited
Kotak Mahindra Old
Mutual Life Insurance
Limited

Kotak Mahindra
Bank

OldMutual
(South Africa)

26

8.

Max New York Life

Insurance Co. Ltd.

Max India

NewYorkLife
(US)

26

J&K Bank
Dhanlaxmi Bank

Met Life (US)

26

3.

9.
10.

Pnb Metlife India

Insurance Company
Ltd.

Bajaj Auto

Allianz
(Germany)

26

Aditya Birla Group

SunLife
(Canada)

26

Sahara India Insurance

Company .Ltd

Sahara India

None

11.

SBI Life Insurance

Company Limited

SBI

Cardiff (France)

26

12.

TATA Group

AIG (US)

26

13.

Tata AIG Life Insurance

Company Ltd

Shriram

Sanlam Life Ins.

14.

Shriram Life Insurance

Company Ltd.
Bharti AXA Life
Insurance Company Ltd.
Future Generali India
Life Insurance Company
Limited
IDBI Fortis Life
Insurance Company Ltd.

Bharti Group

AXA(Australia)

Future Group

Generali
Group(Italy)

IDBI Bank and

Federal Bank

Fortis (Europe)

15.
16.

17.

26

49 | P a g e

Canara HSBC Oriental

Bank of Commerce Life
Insurance Company Ltd.

Canara Bank and

Oriental Bank of
Commerce

HSBC Insurance
(Asia Pacific)

19.

Aegon Religare Life

Insurance Company Ltd.

Coleman and
Company

Aegon and
Religare

DLF

20.

DLF Pramerica Life

Insurance Company Ltd.

Pramerica
(United States)

21.

Star Union Dai-ichi Life

Insurance Co. Ltd

Bank Of India and

Union Bank Of India

22.

India First Life

Bank Of Baroda and

Andhra Bank

Dai-ichi Mutual
Life Insurance
Company(Japan)
Legal and
General (UK)

18.

26

26

26

Table 4

NEED FOR LIFE INSURANCE

Not everybody needs life insurance. If a person is single and has no dependents, it may not be worth the
expense. If, however, the person has anyone who financially depends on him even partially, life insurance
might be suitable then.
The need for life insurance will depend on the personal circumstances, including the current income and the
current expenses, current savings and the families goals. Rules of thumb might indicate that purchasing life
insurance that covers six to 10 times the gross annual income is the correct sum of coverage. But ones family
may need more or less than that. When deciding how much coverage is necessary, one should lay out the
50 | P a g e

details of what he/she has versus what goals he/she would like for his/her family once he/she is gone, keeping
in mind that their security can often carry a higher price tag than he/she originally thought.
Apart from this, life insurance is a unique investment avenue that helps to meet the dual needs of life- saving
for life's important goals, and protecting the assets.

ASSET PROTECTION
From an investor's point of view, an investment can play two roles - asset appreciation or asset protection.
While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in
that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation.
The core benefit is that the financial interests of ones family remain protected from circumstances such as loss
of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a
strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance
occupies a unique space in the landscape of investment options available to a customer.

GOAL BASED SAVINGS

Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be
buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage
of their children. As one grows older, planning for one's retirement will begin to take precedence.
Clearly, as the life stage and therefore the financial goals change, the instrument in which one should invest
should offer corresponding benefits pertinent to the new life stage.
Life insurance is the only investment option that offers specific products tailor made for different life stages. It
thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life
stage, and hence ensures that the financial goals of that life stage are met.

The table below gives a general guide to the plans that are appropriate for different life stages.

51 | P a g e

Life Stage

Primary Need

Life Insurance Product

Young & Single

Asset creation

Wealth Creation plans

Young & Just married

Asset creation & protection

Wealth creation and mortgage

protection plans

Married with kids

Children's
education,
creation and protection

Middle aged
grown up kids

with

Across all life-stages

Asset

Education insurance and wealth

creation plans

Planning for retirement & asset

protection

Retirement solutions

Health plans

Health insurance

Table 5

52 | P a g e

UNDERWRITING
Insurance underwriting is the process of choosing who and what the insurance company decides to insure.
This is based on a risk assessment. It is pretty much the "behind the scenes" work in an insurance company
where they determine who is insured and how much in insurance premiums they will charge the insured
person. Insurance underwriting also involves choosing who the insurance company will not insure.

Types of underwriting

Figure 8

Underwriting is necessary:

To charge right Premiums according to risk.

To protect company from insuring Lives whose Risk is not acceptable & avoid frauds

To offer cover to a wide group of lives

To remain competitive

53 | P a g e

TYPES OF RISKS

Figure 9

SOURCES OF INFORMATION FOR UNDERWRITER

Application Form

Age Proof- An important requirement for acceptance of Life Insurance proposal. It is also essential to
calculate the exact Premium. Age is also recorded as per Proof submitted. The age forms the basis of
premiums to be paid by client.

Financial Advisor Report

Medical Examiners Report

Financial Documents (if Required)

Questionnaires based on health/occupation/Avocation/habits /Client Assessment Form (if Applicable)

Additional Medical Evidence (if required)

FINANCIAL UNDERWRITING
A process which ensures.

The Life Insurance cover requested is appropriate

54 | P a g e

Avoid giving excessive cover

Premium Paying capacity of the customer

FINANCIAL UNDERWRITING CALCULATES

HUMAN LIFE VALUE

Figure 10

PREMIUM PAYING CAPACITY

Figure 11

55 | P a g e

DIFFERENT UNDERWRITING DECISIONS

Figure 12

MEDICAL UNDERWRITING
It is a process of Calculation of Risk involved in Insuring Life on the basis Of:

Information in Application Form

Information in Questionnaires (if any)

Findings of Medical Tests

56 | P a g e

MEDICAL GRID

Table 6

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LIFE INSURANCE CLAIMS

Claims are the desideratum for insurance.
Claim settlement serves to draw the benchmark for an insurance companys customer orientation and
contributes to the companys market reputation. Hence in any insurance organisation claims departments
functions are paramount.
The purpose of taking a policy is only to get the claim on the happening of the insured event. For a life
insurance policy, normally it is either surviving till maturity or on unfortunate death if it is earlier. Therefore, if
the claim is not settled expeditiously when it falls due it creates lot of dissatisfaction to the customer.
The claims philosophy of any company should be to provide fair, quick, transparent and efficient claims
service. Payment of claims in time is the delivering of the promise made by the company, and is therefore
indeed a culmination of the cycle, which completes the obligations placed upon the insurer. It is the insurer
redeeming his promises. The claims settlement efficiency and fairness will be the yardstick with which the
insurers efficiency is measured. Good practices in claim settlement are really an effective unpaid publicity for
the company.
To be eligible to get the claim the policy should be kept current by paying the due premiums. If premiums are
not paid in time the policy lapses. If at least three yearly premiums have been paid the policy will acquire
proportionate paid up value and that will be paid as claim along with bonus.
There are basically two types of claims in life insurance:

MATURITY CLAIM
Majority of claims paid are those arising out of completion or surviving the insurance policy term under
endowment type of policy and these claims are paid to the surviving policyholder. Survival benefits, which are
a percentage of policy amounts under Money back type of policies, are also included in this category. If the
policy is issued with participation in profits, the bonus amounts are also added and paid along with the maturity
claim. If a loan was taken on the policy it is deducted and paid.

DEATH CLAIM
When a policyholder dies the contract comes to an end and the insured amount in full with bonus (if eligible) is
paid as claims settled to the nominee or legal heirs. The death claim settlement procedure and the requirements
depend according to the duration of the policy from the date of risk. When death occurs after three years from
the date of risk the claims are called non early death claims and such claims are paid without any extra
requirements.

58 | P a g e

INSURERS AND RURAL INDIA

The countrys private life and general insurance companies are experimenting and innovating new rural
products, pricing policy and the delivery channels to grab a larger pie of the under-penetrated rural India.
According to a Max New York Life NCAER survey, only 19% of the countrys rural households have life
insurance cover, compared with the figure of 38% for urban families and challenge here is to find delivery
channels to cater to these markets.
IRDA guidelines stipulate that an insurance company starting operations need to have atleast 7% of its clients
from rural areas in the first year. The share of rural policies needs to grow to 20% in the tenth year. The insurers
which depend on banks have an advantage in terms of distribution infrastructure. In depth local market
knowledge and formidable network of bank branches in rural and semi-urban areas comes handy for insurers.
Some players such as Aviva are banking on the network of cooperative banks in rural areas for distributing their
products. Some others are exploring more innovative channels. DLF Pramerica Life Insurance is partnering
with Srei Sahaj E- Village to reach some 27,000 villages. Prudential Life Insurance is tie ups with retailers such
as Suvidhaa Infoserve, which runs close to 13,000 kirana stores across 400 locations. Tie-ups with post offices
is another delivery channel that is under exploration. ICICI Prudential has tied up with India Post recently to
reach out to rural markets through 16,159 post offices across Andhra Pradesh. Max New York Life Insurance is
banking on delivery channels such as microfinance institutions and non-gazatted organisations. From the
agricultural income, rural economy getting more and more independent, growth is expected to remain robust
for the countrys insurers.
Drivers of rural insurance development
Demand side
The main economic drivers for general insurance are growth in income, savings and education. The same
drivers apply in the rural sector. A survey was conducted by Forte Group in 2003 of 1172 rural households to
examine the characteristics of insurance-buying households in the rural sector. Firstly, the survey divided the
households into three different groups based on the educational achievements of the chief wage earners
(including women). Group A represents households where the chief wage earner has 10 or more years of
education, B 5 to 9 years and C no more than 4 years. Education of the chief wage earner was highly correlated
with the income of the households. Not surprisingly, in Group A, 44% of the households had some life
insurance policies, whereas in Group C, only 15% did. The incidence of buying non-life insurance was less
than half in all groups. Among the group of people who did not buy insurance, almost a third of the loweducation group did consider buying insurance, even though some 51% confessed no intention to purchase any
insurance at all. This points to a large disposition towards buying insurance in all income groups. For Group A
households, 78% saved in formal institutions (mainly in Post Office savings accounts and in banks). In
Segment B and C, the proportion of households saving in institutions was 49% and 43% respectively. When
other forms of saving are included, the proportion tops 70% in all groups. In terms of the proportion of income
59 | P a g e

saved (among the households that did save), it is above 35% in all groups. Surprisingly, the savings rates are
high for all households regardless of their level of education. These findings demonstrate that the key economic
elements driving insurance buying in the rural sector are in place. What did people save for in the past? The
most often-quoted reason (18% of savings) was for a daughters wedding. In India, the daughters family is
expected to pay a dowry to the grooms family (even though the practice is illegal). Upgrading housing was
done with another 10% of the savings. Buying land and medical expenses ate up another 7% each. Awareness is
another important factor driving demand for insurance. The awareness of the need for life insurance is high
across all segments. Awareness of the need for motor and accident insurance follows the same pattern: more
than 70% of the respondents in Group A are well aware of the need for them, more than 60% in Group B and
45% in Group C. For other kinds of insurance, the levels of awareness are somewhat lower. In general, the rural
population is much more aware of life insurance than non-life insurance. It is quite common to refer to a life
insurance policy as an LIC in the rural areas.
Supply side
There are two critical elements to success on the supply side of insurance in rural areas: products that are
suitable for the rural population and an adequate distribution mechanism. The development of rural insurance
products should have the specific needs and capacity of the rural population in mind. Firstly, the income pattern
in rural areas is different from in urban areas. Specifically, income follows crop cycles. There are two main
crops during a calendar year. Thus, in many parts of rural India, a semi-annual payment of premiums is
preferred. However, this pattern of income is not universal across all regions. Therefore, policies have to be
region-specific. Secondly, the general buying capacity is lower in the rural areas. Consumer goods have been
marketed very successfully in the rural markets by lowering the unit size. For insurance products, this means
selling life insurance with a lower minimum face value. Thirdly, the level of education is lower in the rural
areas. Therefore, simplified products would be preferable for most customers. Fourthly, verification of age and
fixed address may be cumbersome in t he rural areas. Using wider age bands for life insurance policies would
simplify the procedure. A number of insurance companies are already following one or more of these avenues.
Traditional agents are still the most effective means to penetrate rural areas, although the use of bank branches
is on the rise. There is a great variation in rural distribution of insurance among life insurers. For life insurance,
the LIC has roughly the same number of agents in the rural and the urban sectors. Not surprisingly, the total
number of agents in the LIC is far higher than for any other provider. For all private life insurers, the number of
urban agents outnumbers the number of rural agents by a factor of four or more. For private non-life insurers,
the proportion of agents in urban areas is five to ten times more. For public companies, there is a two- to threefold difference.

60 | P a g e

COMPETITIVE
(2014)

ANALYSIS

The new business premium (NBP) during 9MFY10 recorded 29.2% increase to Rs.625 billion compared to
Rs.522 billion during the same period last fiscal, mainly driven by 50% NBP growth by LIC. Private insurers
managed to record a modicum growth of 2.1% in NBP during the quarter period from October2014-December
2014.Private insurers accounted for 90% of the market share in terms of NBP for regular premium ULIP
policies. The renewal premium has recorded 44% growth to Rs.268 bn during 9MFY10. The growth in renewal
premiums is largely due to initiatives taken to improve persistency over the last one year.

DISTRIBUTION
The strategy of business expansion does not seem to work for private players and now the focus is shifting to
improve channel productivity and also closing down non performing branches. Most insurers are now focusing
on adding new distributor relationship through tie-ups with corporate agents and brokers.
The industry has added only 116 branches during 9MYF10 to take the total branch strength to 11,931 branches
from 11,815 branches as on March 31, 2014. Private insurers have a network of 8,709 branches in India and
have closed down 76 branches during the above mentioned period. Most of the large private insurers are on a
consolidation phase and are closing down non performing branches in order to improve operational efficiency.
The private insurers have recorded a negative growth during the first two quarters of 2014 compared to a 38%
growth during Q3FY10 when compared with Q3FY09.
Reliance and SBI Life have added branches during the 9MFY10 while ICICI Prudential, Aviva, HDFC
Standard, Birla Sun Life and Bajaj Allianz have closed down some of their branches. Smaller and new entrants
are waiting for the revival of the economic activity and improvement in overall industry outlook before they
can resume building their distribution network.
On agency recruitment most insurers have either maintained or reduced their agency strength. The focus is
more on improving the productivity of existing agency force. The total number of agents as on 31 December
2014 is at 29, 84,287 agents of which LIC has 14, 21,077 agents while private players have 15, 63,210 agents.

CAPITAL AND ASSET UNDER MANAGEMENT

Slowdown in new business during quarter one and two of year 2014 has prompted many insurers to go slow on
their expansion plan. As a result of which the capital requirement for the industry has gone down. The life
61 | P a g e

insurance industry is capitalized at Rs.276.2 billion as on 31 December, 2014. Most of the private insurers have
refrained from infusing fresh capital during the first nine months of the financial year.
Among large insurers HDFC Standard, Birla Sun Life and Reliance have infused fresh capital. Strong renewal
premium growth together with efficient expense management has kept the capital requirement low. However
with business growth during the last quarter of FY10, the industry is expected to see some infusion of fresh
capital.
The asset under management for the industry has gone up by 43% to Rs.12,230 billion as on 31 December,
2014. For private players the majority of the asset under management is held under ULIP business and in
equities. The recovery in the stock market over the last couple of months has significantly increased the asset
under management of private insurers.
Now lets look at the performance of the major players since their inception in short.
Life Insurance Corporation Of India: LIC completes 53 years of its services to its customer. The stateowned insurance giant posted a 50% growth in new premium collection in the first nine months of the 2010
fiscal, increasing its market share to 65 per cent from 56 per cent a year ago. LICs new premium collection
touched US$ 9.58 billion in the April-December 2014 period.
The total number of branches and number of advisors as on 31 st December 2014 was 3222 and 1421077
respectively.

ICICI Prudential Life Insurance Co Ltd: ICICI Pru continues to be the market leader among the private
players. The company has registered 27% growth in total premium to Rs.4031 bn during Q3FY10 as against
Rs.31.73 bn during Q3FY09 backed by 20% growth in renewal premium. However the company has recorded
18% dip in new business premium during the 9MFY10 (Rs.38.33 bn) as compared to 9MFY09.
Till date the company has infused a capital of Rs.47.8 bn. The asset under management is at Rs.536 bn as on
December 31, 2014. The company has managed to lower its expense ratio to 8.3% during Q3FY10 as
against12% during Q3FY09. The new business profit is at Rs.2.82 bn during Q3FY10 with new business
margin at 18.9%.

62 | P a g e

Bajaj Allianz Life Insurance: The company has reported a net profit of Rs.1.54 bn The company has reported
a net profit of Rs 1.54 bn during Q3FY10 as against Rs 0.3 bn during Q3FY09. The company has registered
14% growth in total premium collection to Rs 27.6 bn during Q3FY10 as against Rs 24.2 bn Q3FY09 backed
by 16% growth in renewal premium during the quarter. The renewal premium collected during Q3FY10 is at
Rs 16.7 bn against Rs 14.3 during Q3FY09.
The new business premium resulted de-growth of 16% to Rs 25.3 bn during 9MFY10 as against Rs 30.03 bn
during 9MFY09 due to downturn in equity market which have pulled down ULIP sales. Ratio of new business
commission to new business premium has come down marginally to 19% during 9MFY10 as against 20%
during 9MFY09. The ratio of management expense to total premium has come down by 1% to 19% during
9MFY10. The asset under management is at Rs 305 bn as on Dec 31st, 2014.
The paid up capital is at Rs 12.11 bn. The company has not infused any capital during the financial year so far.
The company has a network of 1,151 offices.
The company diversified its product mix by introducing new products and small ticket size micro insurance
products.

Reliance Life Insurance: The company has registered 40% growth in total premium collection to Rs 16 bn
during Q3FY10 as against Rs 11.5 bn during Q3FY09 backed by a strong growth in renewal premiums. The
renewal premium has gone up by 115% during Q3FY10 to Rs 6.8 bn as against Rs 3.2 bn in Q3FY09. In terms
of new business premium the company has registered 6% decline at Rs 21.7 bn during 9MFY10 as against Rs
23 bn during 9MFY09.
The Company has not infused fresh capital during the quarter. It capital base is at Rs 28.1bn. The asset under
management is at Rs 112.6 bn as on Dec 31st, 2014 recording 150% growth. The company has opened 73 new
branches during the quarter to take the total branch strength to 1,247 offices and 192,347 advisors. The focus is
to improve productivity, cost control, customer initiatives, technological improvements, keeping the renewal
premium flow.
The company also increased the share of traditional products by 5%. It also increased its
distribution network to tier 3 and tier 4 cities.

Birla Sun Life Insurance: The company has registered 51% growth in total premium to Rs 14.7 bn during
Q3FY10 as against Rs 9.7 bn during Q3FY09 backed by a strong growth of renewal premiums. The renewal
premium collected during Q3FY10 has gone
63 | P a g e

up by 43% to Rs 9.5 bn against Rs 6.1 bn during Q3Y09. The new business premium has recorded 14% growth
to Rs 20.4 bn during 9MFY10 as against Rs.17.8 bn during 9MFY09 backed by strong growth in group
business.
During the third quarter of FY10, the Company has infused Rs 1000 mn taking the total
capital infusion to Rs 22.75 bn. The asset under management is at Rs.147 bn as on Dec 31st, 2014.The
company has reduced its net loss from Rs 1658 mn to Rs 1428 mn during the quarter mainly due to higher
profitability arising out of in-force business and declining expense ratio.

Max New York Life Insurance: The company has registered 30% growth in total premium to Rs 12.7 bn
during Q3FY10 as against Rs 9.8 bn during Q3FY09 backed by strong growth in renewal premium. The
renewal premium collected during Q3FY10 has gone up by 40% to Rs 7.5 bn against Rs 5.4 bn during
Q3FY09.
In terms of new business premium the company has registered 3% growth to Rs.12.09 bn in 9MFY10 as
against Rs 11.76 bn in 9MFY09. The asset under management is at Rs 90 bn as on Dec 31st, 2014. MNYL has
a agency strength of 75,832 agents. The distribution reach expands to 715 offices across 391 locations. This
includes 139 offices dedicated to rural business.

Kotak Life Insurance: The company has reported a PAT of Rs 185 mn during Q3FY10 as against a profit of
Rs 90 mn during Q3FY09 driven by lower new business strain and reduction in expenses helped the company
post profits. The company has registered 18.4% growth in weighted adjusted premium collection to Rs 16.58
bn during 9MFY10 as against Rs 14 bn during 9MFY09 backed by strong growth in renewal premium. The
renewal premium collected during 9MFY10 has gone up by 79% to Rs 10.12 bn against Rs 5.65 bn during
9MFY09. New business premium has declined by 17.6% to Rs 7.2 bn during 9MFY10 as against Rs 8.7 bn
during
9MFY09. The company has a network of 214 offices in 142 cities. Kotak group contributed to 28% of the sales
and increased the share of tied agency to 50%.

64 | P a g e

SBI Life Insurance: The company has posted a net profit of Rs 2 bn during 9MFY10 driven by efficient
management of expenses, expansion in distribution network, customer centric product offering & spread into
tier III & tier IV cities. The company maintains the lowest expense to gross written premium ratio in industry
of 7.99%.
The company has registered 32% growth in total premium collection to Rs 60.9 bn during 9MFY10 as against
Rs 41.4 bn during 9MFY09 backed by a strong growth of renewal premiums. The new business premium has
recorded 19% growth to Rs 44 bn during 9MFY10 as against Rs 36 bn during 9MFY09.

HDFC Standard Life Insurance

HDFC Standard Life Insurance
HDFC Standard Life Insurance: The company has recorded 14.5% growth in total premium income of Rs
55.65 bn during 9MFY10 as against Rs 315 mn during 9MFY09. The new business premium has recorded
8.6% growth to Rs 20 bn during 9MFY10 as against Rs.18.4 bn during 9MFY09.
HDFC Standard Life has agency strength 190000 agents. The distribution reach expands to 592 offices across
1000 locations. Tied agency contributed around 42% of the new business premium.

65 | P a g e

PRACTICAL EXPOSURE
I learnt about the functioning of Pnb Metlife India Insurance Company Limited. The company has two
levels at every branch. One part is the Sales Agency (related to the marketing division and which is my
area of interest) and the other part is Bank Assurance (relating to the financial decision making
division).
I also learnt how to fill in the insurance policy forms and the recruitment form. I was told about when
and where to mention about the policy owner and when about the nominee.
Underwent Compliance & Sales Training as per companys guidelines. The Sales Process involves the
following steps:

Prospecting
Approach
Fact Find
Solution
References

My company guide told me to remember a mnemonic AIDA:

A ATTENTION
I -INTEREST
D -DESIRE
A ACTION
This means first the advisor should try and gain the customers attention and then create an interest in him for
the product, then create a desire in him and then act.

A new product was launched, Met MAGIC PLUS. It is a Unit Linked Insurance Plan for children. All
the employees were given the training. The term of the plan is 10, 15, 20 or 25 years. The maximum
premium that a customer can pay is
Rs.1, 00,000. The sum assured that a customer gets is 5 times the premium paid. This plan also enjoys
the benefit of partial withdrawal. Here after paying a minimum premium till 5 years, the customer can
66 | P a g e

withdraw 10% of the fund value. I tried and analyzed the product and compared it with other insurance
companies.
Similar Plans available in the market are:

BSLI Sal Childrens Plan

Max New York Life Shiksha Plan
Kotak Mahindras Headstart Plan

I took the IRDA examination and cleared it acquiring 64%.

With my company guides assistance, I was able to clear the customers query. This also helped me
learn about the various investment tools in the markets. I learnt that selling insurance policies is not
very easy. People in Kolkata still have a bent of mind that nothing is better than LIC. This is due to the
various investment options and the aggressive competition of new entrants in the market.
I gained a comprehensive understanding of the other private players present in the market in the study
of competitive analysis.
One of the best exposure that I got was the recruitment activity that we carried out in Howrah. I
designed a leaflet in Microsoft Power Point. The best learning for me was in interacting with common
people at random and explaining them the benefits of working at Pnb Metlife.
The morning clinics held at Pnb Metlife enhanced my practical knowledge to a larger scale.
SALES DONE DURING THE PROJECT
I made several calls and was able to close a few of them giving the company a business of One Lakh
Eighty Six Rupees.
The products that I sold were:

Met Easy Plus

Met Gold Plus and
Met Suraksha

I also recruited 3 financial advisors for the company.

IN A NUTSHELL

Points Covered

Observations

Recommendations

Comments(Of the
Company Guide)
67 | P a g e

SWOT analysis of
the company

Inspite of the various

strengths, Pnb Metlife has
a very low market share.
The opportunities are
abundant for the company
to augment its share.

Pnb Metlife had a growth

of -7.5% from year 2008
to 2014.The market share
for April-Dec FY10 is 0.9.
Jeevan Anand product of
LIC is one of the best
products in the Indian
insurance industry.

Should concentrate on
niche segment and go for
product, brand and line
extension.

Distribution channel

The company has strong

banc assurance and
corporate partners.

Negative growth means

the company should
improvise on its current
products and marketing
strategies.
Keeping in mind the
competition, the
company should also go
for tie-ups with retailers
and post offices.

7 Ps Of Marketing

People, Promotion,
Process and Physical
Distribution is convincing
and satisfying.

Pnb Metlife should focus

on the other three Ps ;
that is Product, Price and
Place

Competitive Analysis

Pnb Metlife was never

looking at becoming the
number 1 in terms of
market share as the focus
was on a steady growth
and not on market share
which can very well be
observed from low
budget advertising
strategy (which has been
based on small pockets).
We as an organization
are keen on growing in
the longer version of
time.
I would not agree on any
product being the best as
each and every product
might be fit for an
individual as per his
current and future
requirement. It is quite
difficult to analyze
products as all are
governed by the same
Body.
We strongly agree that
there should be more no.
of retailers to enhance
the distribution channel
for Pnb Metlife.
Pricing is a concern
along with the expansion
to remote areas is also
what has to be taken care
of.

68 | P a g e

DATA ANALYSIS
Segmentation of the respondents on the basis of certain criteria:
Now, let us turn our attention towards the respondent who were covered under this study. These respondents
can be categorized on the basis of certain important criteria like age group, annual income and occupation.
1. AGE GROUP

Age Group

No of
Respondent

Percentage
(%)

Below 30 Yrs

34

23

31-40 Yrs

48

32

41-50 Yrs

32

21

51-60

21

14

Above 60 Yrs

15

10

Total

150

100

Table 7

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Figure 13

2. ANNUAL INCOME
Annual Income
Level

No of
Respondent

Percentage
(%)

Below 1 Lakh

34

23

1.0 - 3 Lakh

59

39

3.01 - 5 Lakh

21

14

Above 5 Lakh

36

24

Total

150

100

Table 8

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Figure 14

3. OCCUPATION
Occupation

No of
Responden
t

Percentage
(%)

Employed

81

54

Self Employed

50

33

Others

19

13

Total

150

100

Table 9

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Figure 15

OBSERVATION AND INTERPRETATION

The first step towards my research is to find out the percentage of the income that different age group people
usually save. The method used is simple percentage analysis method.

Percentage (%) Of
Income

Age
Group
Below
30

Age
Group
31-40

Age
Group
41-50

Age
Group
51-60

Age Group
>60

<20%

20
(58.8%)

6
(40%)

7
(20.5
%)
3
(8.82%)

5
(15.62%
)
6
(18.75%
)
17
(53.12%
)

20%-25%

33
(68.75%
)
7
(14.58%
)
5
(10.42%
)

5
(33.33%)

7
(33.33%
)

2
(13.33%)

25%-30%

72 | P a g e

>30%

4
(11.76%)

3
(6.25%)

4
(12.5%)

14
(66.67%
)

2
(13.33%)

Total (150)

34

48

32

21

15

Table 10

Figure 16

It can be interpreted that the average percentage of income saved increases with increasing age. The modal
percentage for age up to 40 is less than 20% while the same hovers between 25-30% in the age group 41-50
and soars above greater than 30% in the age group of 51-60. There is again a decline in percentage savings for
age group greater than 60. The above is perfectly in tandem with life cycle hypothesis of consumption. The
proportion of income consumed is high in the initial years when an individual builds up on his basic amenities
of life. In the age group between 41-60 he is at a stage where most of his capital investments such as (home
building, providing for childrens education, etc) have been taken care of and he is also at a fairly mature stage
of his career when his income is at the peak. However, subsequently post retirement his income plummets and
he leaves out of his past savings as a result of which the percentage of his savings drop. Therefore the age
group between 41-60 is the best possible target group in terms of affordability of insurance product .

CONSUMER PREFERENCE TOWARDS DIFFERENT INVESTMENT AVENUES

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Next step is to find out the various investment alternatives available to customers and the investment tool most
preferred by Indian consumers.
I used the ranking method technique to rank out the opinion about the consumers preference towards
different investment alternatives. I used this method to compare each option with each other option, one-byone. Following are the steps to use the technique:

First, I placed the different investment opportunities vertically and the rankings horizontally in the
increasing order (from 1 to 9).
The next step was to calculate the modal rank of the different avenues on the basis of the modal
frequency.
Finally, on the basis of the modal rank given by the respondents, the investment avenues were ranked.

The following table shows the ranking of the different investment tools as per customer preferences:

Investment
Alternatives

Modal

Rank

Rank

Fixed Deposits

Mutual fund

II

Insurance

III

Real Estate

IV

Public Provident

V
74 | P a g e

Fund(PPF)
Equity/Shares

VI

Gold & Silver

VII

Post office

VIII

Bond & Debentures

IX

Table 11

From the above it can be observed that the investment avenues preferred by the customers are:
Fixed Deposit- I
Mutual Fund- II
Insurance- III
Real Estate-IV
PPF- V
Equity/Shares- VI
Gold and Silver- VII
Post Office- VIII
Bonds and Debentures- IX

Fixed Deposits happen to be the most trusted investment opportunity because of the guarantee of principal,
interest and timing .Furthermore, guarantee rates go up to 9% in the current market conditions making it the
most lucrative investment.

Mutual Fund merges to be the second most popular investment avenue because of its prospects of generating
much higher returns and professional fund management by experts which takes care of the risk factor.

Insurance because of the protection that it uniquely offers along with prospects of high return in ULIP plans
which offers the same flavor as mutual funds coupled with entry and exit tax benefits.

75 | P a g e

Real Estate-The popularity of real estate as an investment opportunity has soared with the real estate price
boom that has prevailed in the market in the last decade and also because a sizeable proportion of the young
population doesnt need to investment in housing for occupancy.

Public Provident Fund- The relatively low popularity of the same Inspite of 8% guarantee return is because of
the 8 years lock in period contingent to it.

Equity/ Shares features at the seventh position because of the risks involved in it as our retail investors are not
matured enough to handle the risk factor.

Gold n Silver- This has been a traditional mode of investment and its comparatively lower popularity can be
attributed to the stigma against selling away of household gold or silver. As a result the value of the asset
cannot be realized in terms of money. However this scenario would change with the introduction of gold traded
funds.

Post Office-Inspite of guarantee return of 8.5% its popularity is on the lower side because of the lock in period
associated and the returns being taxable.

Bonds and Debentures features at the ninth rank because of the complexity of the instrument and lack of
awareness. The comparatively lower return is yet another reason for its lowest rank.

IMPACT OF PRIVATISATION IN INDIAN INSURANCE INDUSTRY

Private Life Insurance companies provide better investment products than LIC.

Strongly Agree
Moderately Agree
Neutral
Disagree
Strongly Disagree

NUMBER OF PEOPLE
9 (6%)
36 (24%)
16 (11%)
39 (26%)
50 (33%)
76 | P a g e

Total

150
Table 12

Figure 17

INTERPRETATION
It can be observed that 59% of the respondents believe that private life insurance companies are too new in the
market and could be unreliable. The recent recession in the world wide market and the failure of giant
insurance companies like AIG have left them more confused and further shy from the private insurance players.

Private Life Insurance companies provide better service products than LIC.

Strongly Agree
Moderately Agree
Neutral
Disagree
Strongly Disagree
Total

NUMBER OF PEOPLE
38 (25%)
20 (13%)
6 (4%)
28 (19%)
58 (39%)
150
Table 13

77 | P a g e

Figure 18

INTERPRETATION
25% of the sample population feel that private insurers have been able to force LIC to give a better level of
service which was not there before the insurance sector was opened to the private players. 58% of the
population disagrees regarding positive service of private players. The complaint in this regard is due to the
agents in the private insurance companies who are not properly educated regarding the products and hence not
in a position to sell a product properly and in case the product is sold they are no longer interested in providing
proper service which they had committed earlier.

LIC would lose its monopoly against the private players.

Strongly Agree
Moderately Agree
Neutral
Disagree
Strongly Disagree
Total

NUMBER OF PEOPLE
0
21 (13%)
27 (19%)
39 (26%)
63 (42%)
150
Table 14

78 | P a g e

Figure 19

INTERPRETATION
68% of the sample population believes that LIC would not lose its monopoly. This is due to the presence of
LIC since 55 years and also it has the backing of the government which gives it a huge monopolistic
positioning.

How has privatization of Life Insurance benefitted you?

New Products
Wider choice of
insurance schemes
Higher Returns
Better investment
options
No Difference
Total

NUMBER OF PEOPLE
17 (11%)
72 (48%)
9 (6%)
12 (8%)
40 (27%)
150
Table 15

79 | P a g e

Figure 20

INTERPRETATION
The major advantage that people got with the entry of private players was that they got a wider choice of
investment products. New and innovative products came into being. 48 % of the total respondents consider that
they got wider choice of insurance schemes whereas 27% found no difference.
CONCLUSION
Despite the fact that new private companies have bought lot of new innovative products in the market, they lag
behind in the reliability factor which has been earned by LIC over the last 55 years. If we really look into the
four pie charts above and the interpretations thereof, we can generally say that LIC outplays the private
players in 6:4 ratio.

ATTRIBUTES TO BE CONSIDERED BEFORE BUYING AN INSURANCE PRODUCT

As we have seen that due to the new entrants and the plethora of products available in the market, the players
are becoming very aggressive to sustain in the market.
The consumer comes to a decision of buying an insurance product by considering some important factors like:
1) Brand name of the company
2) Premium
3) Policy term
4) Claim settlement history
5) Responsiveness
6) Riders
7) Charges

80 | P a g e

SPSS was used to carry out Factor Analysis to find out the most important attribute that people consider before
buying an insurance product. The preferences of the Respondents have been measured on a scale of 1 to 5
where
5 refers to Very Important
4 refers to Important
3 refers to Neutral
2 refers to Less Important
1 refers to Not Important
For factor analysis first of all KMO and Bartletts Test have been done to understand that whether the data set is
suitable for factor analysis or not.
KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling

Adequacy.
Bartlett's Test of
Sphericity

Approx. Chi-Square
df
Sig.

.543
108.289
21
.000

Table 16

Bartletts test:
H0: The factor analysis is not valid.
H1: The factor analysis is valid.
The KMO statistic varies between 0 and 1. A value of 0 indicates that the sum of partial correlations is large
relative to the sum of correlations, indicating diffusion in the pattern of correlations (hence factor analysis is
likely to be inappropriate). A value close to 1 indicates that patterns of correlations are relatively compact and
so factor analysis should yield distinct and reliable factors. For the above data the value is 0.543, so we can say
that factor analysis is appropriate for the data.
Bartletts measure tests the null hypothesis that the original correlation matrix is an identity matrix. The
significance value should be less than 0.05. For these data, Bartletts test is highly significant as the
significance value is less than 0.01 and therefore we reject Ho and conclude that the Factor Analysis is valid.
Communality
Initial

Extraction

BRAND

1.000

.625

PREMIUM

1.000

.801

POLICY_TERM

1.000

.526

81 | P a g e

CLAIM_SETTLEMENT

1.000

.632

RESPONSIVENESS

1.000

.539

RIDERS

1.000

.675

CHARGES

1.000

.598

Extraction Method: Principal Component Analysis.

Table 17

Communalities indicate the amount of variance explained in each variable. Initial communalities are estimates
of the variance in every variable explained by factors. It is always 1 when we do principal components
analysis. Extraction communalities indicate estimates of the variance in each variable explained by the factors.
Small values indicate variables that do not fit well with the factor solution, and should possibly be dropped
from the analysis. Here in this output the communality for all factors is very high. Therefore we can say that
Factor Analysis will give a relevant solution.
Total Variance Explained
Component

Initial Eigen values

% of
Cumulative
Total Variance
%
1.75
25.023
25.023
2
1.59
22.818
47.841
7
1.04
14.950
62.791
7
.836
11.949
74.741

.695

9.929

84.669

.628

8.969

93.638

1
2
3

Extraction Sums of Squared

Loadings
% of
Cumulative
Total
Variance
%

Rotation Sums of Squared

Loadings
% of
Cumulativ
Total
Variance
e%

1.752

25.023

25.023

1.654

23.631

23.631

1.597

22.818

47.841

1.551

22.153

45.784

1.047

14.950

62.791

1.191

17.008

62.791

100
.000
Extraction Method: Principal Component Analysis.
7

.445

6.362

Table 18

The above table lists the Eigen values associated with each linear factor before extraction, after extraction and
after rotation. The eigen values associated with each factor represent the variance explained by that particular
linear component. Here the eigen value is also explained in terms of percentage of variance explained. So
factor 1explains 25.023% of total variance. If we look at Eigen value table It is seen that only 3 factors have
Eigen values above 1. So we conclude that the variables can be reduced to 3 factors.
The three factors also show a cumulative variance explanation of 62.791%, which means a good factor
analysis has been done.
Rotated Component Matrix
Component
1

BRAND

-.030

.507

-.605

PREMIUM

-.157

.178

.863

POLICY_TERM

.672

.254

-.101

CLAIM_SETTLEMENT

.104

.775

.140

82 | P a g e

RESPONSIVENESS

.123

RIDERS
CHARGES

-.719

.086

-.763

.278

-.121

.754

-.042

-.166

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 5 iterations.

Table 19

Looking at the above table we find that Policy Term, Riders and Charges are highly associated with the first
factor, Claim Settlement and Responsiveness with the second factor and Brand and Premium are highly
associated with the third factor.
Now these three factors were carefully analyzed and appropriate name was chosen for them like:
FACTOR 1
The attributes which contributed highly to the first factor are:
Policy Term
Riders
Charges
The above three attributes are concerned with the product of the company. Hence we combine them into one
factor called PRODUCT.
FACTOR 2
The attributes which contributed highly to the second factor are:
Claim Settlement
Responsiveness
The above two attributes are related to the service that an insurance company provides. So we can merge the
two attributes into one factor called the SERVICE.
FACTOR 3
The attributes which contributed highly to the third factor are:
Brand
Premium
The above two attributes can be together called the COMPANY IMAGE.
Component Score Coefficient Matrix
Component
1

BRAND

-.054

.273

-.481

PREMIUM

.007

.193

.752

POLICY_TERM

.422

.199

.010

CLAIM_SETTLEMENT

.127

.532

.209

RESPONSIVENESS

.042

-.458

.018

83 | P a g e

RIDERS

-.471

.125

-.162

CHARGES

.448

.002

-.066

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

Table 20

Calculation of scores for each of the 3 factors:

Component 1 = (0.422*Policy Term)-(0.471*Riders) + (0.448*Charges)
Component 2 = (0.532*Claim Settlement)-(0.458*Responsiveness)
Component 3 = (-0.481*Brand) + (0.752*Premium)

DISCRIMINANT ANALYSIS
The tables of the analysis are given below with their interpretations followed with each table obtained by
applying discriminant analysis.
Analysis Case Processing Summary
Unweighted Cases

N
Valid

Excluded

Percent
150

100.0

.0

.0

Missing or out-of-range group codes

At least one missing discriminating

variable

84 | P a g e

Both missing or out-of-range group

codes and at least one missing
discriminating variable

.0

Total

.0

150

100.0

Total

Table 25

The table above illustrates the authenticity of the data, or in other words, to what percentage is the data used
appropriate for the analysis. As can be seen from the table above, the validity of the data is 100 which is a very
good value to illustrate that the analysis has been done with appropriate data in the right perspective of the
project objective.
Group Statistics
Dependent
0

Total

Mean

Std. Deviation

Valid N (listwise)
Weighted
51.000

COMPONENT1

.08067

.798271

Unweighted
51

COMPONENT2

.27714

.932012

51

51.000

COMPONENT3

1.10233

.847225

51

51.000

COMPONENT1

2.25544

.835887

99

99.000

COMPONENT2

.18628

.728700

99

99.000

COMPONENT3

.91662

.762415

99

99.000

COMPONENT1

1.51602

1.319791

150

150.000

COMPONENT2

.21717

.801628

150

150.000

COMPONENT3

.97976

.794341

150

150.000

Table 26

The table above of group statistics provides with MEAN and STANDARD DEVIATION values under each
category.
The mean is the average value. The standard deviation measures the variability of the values. We can observe
that the mean value of component 1 for the dependent variable 0 and 1 is 0.08067 and 2.25544 respectively and
the large difference shows that the component 1 is the discriminating factor between those who prefer to select
Pnb Metlife and those who dont. The values of component 2 and component 3 for 0 and 1 are very close to
each other. Whereas the values of component 1 have a big difference. Therefore, we can conclude that
component 1 is the most important discriminating variable.

Summary of Canonical Discriminant Functions

Eigen values

Function

Eigen value

% of Variance

Cumulative %

Canonical
Correlation

85 | P a g e

1.587(a)

100.0

100.0

.783

a First 1 canonical discriminant functions were used in the analysis.

Table 27

Wilks' Lambda

Test of Function(s)
1

Wilks'
Lambda

Chi-square

Df

Sig.

.387

139.238

.000

Table 28

The above two tables shown below gives the percentage of the variance accounted for by the one discriminant
function generated. The significant of the function is also shown.
The Eigen value is the ratio of the between-groups sum of squares to the within-groups sum of squares.
The canonical correlation measures the association between the discriminant scores and the groups.
Wilks's lambda tests the significance of each discriminant function. It is used to test if the discriminant model
as a whole is significant or not. Its value lies between 0 and 1.
As seen from the output table above, we can conclude that there is a good degree of discrimination between the
two sets. This is said so because of a high value of Wilkss Lambda (.387) which lies between 0 and 1 as
discussed.

Standardized Canonical Discriminant Function Coefficients

Function
1
COMPONENT1
COMPONENT2
COMPONENT3

1.001
.009
.003

Table 29

Standardizing the coefficients allows us to examine the relative standing of the measurements. The number of
canonical variables is k-1 (where k is the number of groups) or p (the number of variables), whichever is
smaller. The coefficients of the canonical variable are used to compute a canonical variable score for each case.
Structure Matrix
86 | P a g e

Function
1
COMPONENT1

1.000

COMPONENT3

-.089

COMPONENT2

-.043

Pooled within-groups correlations between discriminating variables and standardized canonical discriminant functions
Variables ordered by absolute size of correlation within function.

Table 30

This matrix provides another way to study the usefulness of each variable in the discriminant function.
Functions at Group Centroids
Function
DEPENDENT
0
1

1
-1.743
.898

Unstandardized canonical discriminant functions evaluated at group means

Table 31

Functions at group centroids are the mean discriminant scores for each of the dependent variable categories.
The group centroids are quite different for the two groups. For the first canonical variable, the average
discriminant or canonical variable score for the dependent 0 is -1.743.
The last three tables from the output listing were generated from the optional selection of Summary table from
the Classify options in the Discriminant Analysis dialog box. The last of the table provide an indication of the
success rate for prediction of membership of the grouping variable's categories using the discriminant function
developed from the analysis.
Classification Processing Summary
Processed
Excluded

150
Missing or out-of-range
group codes

At least one missing

discriminating variable

Used in Output

150

Table 212

87 | P a g e

Classification Results(a)
Predicted Group Membership
DEPE
Original

NDENT
Count
%

0
46

1
5

TOTAL
51

93

99

90.2

9.8

100.0

6.1

93.9

100.0

a 92.7% of original grouped cases correctly classified.

Table 33

The last table shows that the 0 Dependent is the more accurately classified with 90.2% of the cases correct. For
the Dependent 1, 6.1% of cases were correctly classified. Overall, 92.7% of the original cases was correctly
classified. So the overall discriminant analysis is correct.

TO FIND WHETHER GENDER BIAS INFLUENCED FOR INVESTING IN LIFE INSURANCE

Table given below shows the data obtained during study of life insurance:
Having
insurance

Not having
insurance

Total

Male

51

11

62

Female

75

13

88

Total

126

24

150

Table 34

Source: Primary Data

88 | P a g e

Null Hypothesis
(Ho): There is no gender bias for investing in insurance
Alternative Hypothesis
(H1): There is gender bias for investing in insurance.
Fo = Observed data
Fe= (Row Total * Column Total) / n
Chi square calculations:
Fo
51
11
75
13

Fe
52.08
9.92
73.92
14.08

Fo-Fe
-1.08
1.08
1.08
-1.08

(Fo-Fe)^2
1.1664
1.1664
1.1664
1.1664

[(Fo-Fe)^2]/Fe
0.02239
0.11758
0.01577
0.08284

Table 35

Chi square value= 0.02239 + 0.11758 + 0.01577 + 0.08284

= 0.23858

Chi square test

Factor

Level of
significance

Degree of
freedom

Critical
value

Chi square

Gender

5%

3.841

0.23858

Table 36

Degree of freedom = (Number of rows-1) * (Number of columns -1)

= (2-1) * (2-1)
=1
Result:
Chi square value is less than the chi square critical value.
89 | P a g e

Hence accept the null hypothesis (Ho)

We can conclude that gender bias doesnt influence for investing in life insurance.

FINDINGS
PROJECT

FROM

THE

The findings that can be drawn from the survey conducted by us can be summarized in the following way:

a) The huge untapped market has to be targeted properly by designing products according to their specific
requirements.

90 | P a g e

b) People who belong to different age groups have different perception regarding the most important
criteria before taking the decision on a life insurance policy.
c) People who belong to different income groups also have different perception regarding the important
criteria concerned with the life insurance.
d) Bank Deposits are the most preferred investment alternative which is available to people followed by
alternatives such as Mutual Fund, Insurance, Real Estate, Gold and Silver, etc.
e) 22 respondents are interested to invest in Pnb Metlife because of the companys brand image and the
transparency of the company.
f) It was found that nearly 43% of the respondents usually save less than 20 %.
g) Among the 150 respondents, around 38 people had policy of Pnb Metlife.
h) Since the discriminating factor is component 1, so instead of concentrating on all the factors the
company should pay special attention to its product as the result shows that this factor is the main
discriminating factor between those who select Pnb Metlife and those who dont select it.
i) Gender bias does not influence for investing in life insurance.

RECOMMENDATIONS

Consumer should be aware of companys profile and returns associated with insurance.
The Financial advisor should be right enough to serve the consumers. The consumer should also be

aware of the advisor or others who is looking after their investments.

The company should launch more ULIP plans with small premium and short policy term.
Company should publish their performance by comparing it with their competitors.
Company should adopt strategies to explore that private insurance companies are safer and securer than
public insurance company like LIC.
91 | P a g e

Attract the youth of India with higher returns of investment as returns are the motivating factor for

purchase of insurance.
Middle income people suggest that premium can be collected on monthly basis instead of twice a year.

Companys reputation is more important because bad impression on image or brand name is considered

while decision making among consumers.

In todays market only that product is sold which is recognized by its logo. The name of the company
should be on the tip of the tongue of all consumers. There are various ways of marketing of life
insurance. All the Integrative marketing communication channels should be used to create a positive
image in the minds of the customer.

CONCLUSION
Pnb Metlife India is a young, evolving and a leapfrogging company. The company is on a growing scale. But
the market share is still as low as around 4%. The company faces a large amount of competition. Competition
will surely cause the market to grow beyond current rates, create a bigger pie and offer additional consumer
choices through the introduction of products, services and price options. The company must promote its
products through advertising and improve its selling techniques.
From the analysis done, we could understand that the company should target people of age group 41-60 and
design products according to their needs.
It is also concluded that policy term, riders and charges are the important parameters that people consider
before investing in an insurance product. Pnb Metlife should concentrate on its products to sustain itself in the
market.
A company approaches to the customers through its distribution network. Pnb Metlife should educate and train
their advisors in such a way that mis selling is avoided.
The unit linked products should be specifically promoted. New innovative products should be launched with a
relatively low premium amount and smaller policy term.
In the Indian life insurance market LIC is a major player and though its market share has reduced, the
confidence of consumers in LIC is still prevalent. Consumers are very reluctant to invest in the private
companies inspite of these companies promising more returns. I had to face the same difficulty while selling
92 | P a g e

life insurance of Pnb Metlife to consumers. The market has become very erratic and so money has become
dearer.
Insurance companies need to come up with affordable investment schemes during such times. They also need
to design products for the largely untapped rural markets.

REFERENCES
Websites:
Pnb Metlife to milk recession, plans massive expansion [Online] (Updated November 17,2008)
Available
at:
http://ibnlive.in.com/news/Pnb
Metlife-to-milk-recession-plans-massiveexpansion/78306-7.html
Insurance News [Online] Available at:
http://www.indiainfoline.com/Markets/News/SectorNews/Insurance
Inside Pnb Metlife [Online] Available at:
http://investor.Pnb Metlife.com/media_files/NYS/MET/reports/met_ar_04/docs/insidemet.html
Life Insurance [Online] Available at :
http://www.investopedia.com/university/insurance/insurance7.asp
Pnb Metlife India on massive expansion plan [Online] (Updated February 25, 2010) Available at:
http://www.thehindubusinessline.com/blnus/17251733.htm
Forte Group, Rural Insurance: Issues, Challenges and Opportunities, 2003 [Online]. Available
at: www.docstoc.com/docs/6530475/Indian-Insurance-Market/
Life Insurers in India [Online] Available at : http://www.banknetindia.com/finance/icos.htm
93 | P a g e

Life Insurers Turn Tide In February [Online] (March 23, 2010) Available at : http://www.businessstandard.com/india/news/life-insurers-turn-tide-in-february/389410/
Life insurance industry gains 68% in new biz [Online] (Updated April,23,2010) Available at :
http://www.business-standard.com/india/news/life-insurance-industry-gains-68-in-new-biz/392755/
Pnb Metlife Products [Online] Available at :
http://www.pnb Metlife.co.in/Pnb MetlifeIndPlans_Childplan_landing.aspx
Pnb Metlife Management Team [Online] Available at:
http://www.pnb Metlife.co.in/Pnb MetlifeAboutus_MgtTeam.aspx
Magazines:

Insurance World (November 2014 issue)

Premium Volume 4 (February 2010 issue)
Outlook Money (March 2010 issue)

Books:

Jack Kinder and Garry Kinder (ed.) , (November 1995) Secrets Of Successful Insurance Sales
P.I. Majumdar and M.G. Diwan (ed.) ,(March 2006) Principles of Insurance IC-01, 12th edition
Mr. S. Balachandran, (June 2006) Practice Of Life Assurance IC-02, 7th edition

ANNEXURE
NUMBER OF BRANCHES
INSURERS
ICICI
Prudential
Bajaj Allianz
Reliance Life
HDFC
Standard
Birla Sun Life
Max New
York
Tata AIG

FOR Q1FY10

FOR Q2 FY10

FOR Q3FY10

2074

2074

1956

1164
1145

1164
1174

1151
1247

596

600

592

600

600

651

711

712

715

500

500

500
94 | P a g e

ING Life
Aviva
SBI Life
Kotak Life
Met Life
Bharti Axa
Life
Sahara Life
Shriram Life
Future
Generali
IDBI Fortis
Canara HSBC
Aegon
Religare
DLF
sPramerica
Star Union
Dai-ichi
LIC

300
224
450
203
192

300
224
424
203
192

208
500
214
195

167

196

203

48
120

48
132

48
-

93

93

93

35
-

35
29

54
29

52

52

57

22

22

29

2048

3222
Table 37

NUMBER OF ADVISORS

INSURERS

FOR Q1FY10

FOR Q2 FY10

FOR Q3FY10

Bajaj Allianz
ICICI
Prudential
HDFC
Standard
Birla Sun Life
Reliance Life
Tata AIG
Max New
York
ING Life

360000

350000

210000

225000

225000

291000

195000

207000

190000

170000
161093
135000

166000
185703
150000

178000
192347
150000

94600

91454

75832

70000

65000

60000
95 | P a g e

Kotak Life
SBI Life
Aviva
Met Life
Shriram Life
Bharti Axa
Life
Future
Generali
Sahara Life
IDBI Fortis
Aegon
Religare
Canara HSBC
DLF
Pramerica
Star Union
Dai-ichi
LIC

40000
70000
30000
60000
-

44415
70,000
37000
56072
30000

33000
70000
37000
100000
32000

26400

33000

30000

25000

36000

40000

13959
7500

6000
7500

6500
8500

3500

1500

4500

450

1780

550

135000

1550000

1421077

Table 38

CAPITAL AND ASSET UNDER MANAGEMENT

INSURERS

FOR Q1FY10

FOR Q2 FY10

FOR Q3FY10

ICICI Prudential
HDFC Standard
MAX New York
Kotak Life
Birla Sun Life
Tata AIG
SBI Life
Bajaj Allianz
ING Life
Pnb Metlife
Reliance Life
Aviva Life

47800
17960
17820
5620
20495
6970
10000
12107
10192
14800
27400
14920

47800
18460
17840
5620
21745
6970
10000
12107
10192
14800
28100
14920

47800
18460
17840
5620
22745
6970
10000
12107
10192
28100
14920
96 | P a g e

Sahara Life
Shriram Life
Bharti Axa Life
Future Generali
IDBI Fortis
Canara HSBC
Aegon Religare
DLF Pramerica
Star Union DaiIchi
India First Life

2320
1250
3930
3350
4500
5250
3950
1623

2320
1250
3930
3350
4500
5250
4650
1623

3930
4500
6250
4650
1623

2500

2500

2000

2000

Table 39

NEW BUSINESS PERFORMANCE

97 | P a g e

INSURERS
LIC
SBI Life
ICICI Prudential
Bajaj Allianz
Reliance Life
Birla Sun Life
HDFC Standard
Max New York
Tata AIG Life
Kotak Life
Met Life
Aviva Life
ING Life
Canara HSBC
Star Union DaiIchi
Future Generali
Shriram Life
Bharti Axa
IDBI Fortis
Sahara Life
Aegon Religare
DLF Pramerica
India First ^
Industry Total

50.0%
19.0%
-18.0%
-15.9%
-5.8%
14.2%
8.6%
-0.6%
16.8%
-17.6%
-7.5%
-3.6%
-8.2%
192.1%

MARKET
SHARE
APR-DEC
FY10
65.4
6.5
5.7
3.7
3.2
3.0
3.0
2.0
1.2
1.1
0.9
0.7
0.7
0.6

MARKET
SHARE
APR-DEC
FY09
56.3
7.1
8.9
5.7
4.4
3.4
3.5
2.6
1.3
1.7
1.3
1.0
0.9
0.3

0.4

2,799
2,629
1,915
1,652
833
116
4.8
347,693

1.8%
-0.3%
34.4%
32.9%
4.0%
544.2%
3920.7%
12.3%

0.4
0.4
0.4
0.3
0.1
0.1
0.0
0.0
100

0.5
0.5
0.4
0.3
0.2
0.0
0.0
100

APRILDEC
FY10

APRILDEC
FY09

GROWTH
(%)

441,781
43,923
38,329
25,260
21,704
20,433
19,987
13,658
8,215
7,189
6,402
4,891
4,404
4,251

294,571
36,904
46,766
30,030
23,030
17,887
18,397
13,741
7,031
8,722
6,921
5,074
4,795
1,455

2,868
2,849
2,619
2,573
2,196
866
745
191
24.4
390,466

Table 40

NUMBER OF POLICIES
INSURERS

APRIL-DEC

APRIL-DEC

GROWTH

MARKET

MARKET
98 | P a g e

LIC
Reliance Life
Bajaj Allianz
ICICI
Prudential
Birla Sun Life
SBI Life
Max New York
HDFC Standard
Tata AIG
Kotak Life
Future Generali
ING Life
Met Life
Aviva
Bharti Axa Life
Shriram Life
Star Union DaiIchi
Canara HSBC
IDBI Fortis
Sahara Life
Aegon Religare
India First ^
DLF Pramerica
Industry Total

FY10

FY09

(%)

23,863,865
1,591,238
1,459,814
1,264,402

20,560,619
1,355,099
1,808,495
1,882,539

16.1
17.4
-19.3
-32.8

SHARE
APR-DEC
FY10
70.5
4.7
4.3
3.7

SHARE
APR-DEC
FY09
67.4
4.4
5.9
6.2

1,263,800
976,963
732,304
714,468
491,943
215,097
208,365
200,069
192,045
161,718
112,824
98,743

811,776
597,959
900,000
643,351
479,156
393,868
27,833
241,826
191,124
257,153
125,886
91,912

55.7
63.4
-18.6
11.1
2.7
-45.4
648.6
-17.3
0.5
-37.1
-10.4
7.4

3.7
2.9
2.2
2.1
1.5
0.6
0.6
0.6
0.6
0.5
0.3
0.3

2.7
2.0
2.9
2.1
1.6
1.3
0.1
0.8
0.6
0.8
0.4
0.3

69,666

0.2

0.0

65,052
56,715
54,947
25,100
13,578
11,646
33,844,362

15,784
46,509
67,592
11,219
601
30,510,301

312.1
21.9
-18.7
123.7
1837.8
10.93

0.2
0.2
0.2
0.1
0.0
0.0
100

0.1
0.2
0.2
0.0
0.0
0.0
100

Table 41

QUESTIONNAIRE
Dear Respondent,
99 | P a g e

This questionnaire is aimed at understanding your perception about life insurance .Your response will be dealt
with strict confidentiality and it will be used only for academic purpose. Thank you for spending your valuable
time to fill this questionnaire.

1. Name:

Gender:

Male

Female

Contact No:
2. Age Group:
Below 30

31-40

41-50

51-60

Above 60

3.

Educational Qualification:
Under Graduate

Graduate

Post Graduate

Others (Specify).
4. Occupation:
Employed

Self Employed

Others (Specify).
5. Annual Income Level:
Below 1 Lakh

1.0- 3 Lakh

3.0 - 5 Lakh

Above 5 Lakh
6. What percentage of your Salary do you usually save?
Less Than 20%

20-25%

25-30%

Greater Than 30%

7. Rank these various investment alternatives according to your
preferences (1 being highest and 10 lowest):

100 | P a g e

Serial
No.

Investment
Alternatives

1.

Bonds and
Debentures
Equity/
Shares

2.

Rank

3.

5.

Mutual Fund
Public
Provident
Fund(PPF)
Post Office

6.

Insurance

7.

Bank Fixed
Deposits
Real Estate

4.

8.
9.

Gold &
Silver

8. Do you have life Insurance Policy? ( If NO then please go to question no. 15)
Yes

No

9. If Yes Which Insurance Company Policy do you have?

LIC
ICICI Prudential

Pnb Metlife

Birla Sun Life

SBI Life

Others (Specify).
.

10. Private Life insurance companies provide better investment products than LIC.
Strongly Agree

101 | P a g e

Moderately Agree

Neutral

Disagree
Strongly Disagree

11. Private Life insurance companies provide better service products than LIC.
Strongly Agree
Disagree

Moderately Agree

Neutral

Strongly Disagree

12. LIC would lose its monopoly against the private players?
Strongly Agree
Disagree

Moderately Agree

Neutral

Strongly Disagree

13. How has privatisation of Life Insurance benefited you?

New products
Better
investment
options

Wider choice of
insurance schemes

Higher Returns

No Difference

14. What parameters do you look into before you take up a life insurance Policy? And tick
102 | P a g e

the following parameter according to your importance.

Parameters
Highly
considered before Important
insurance policy

Important

Neutral

Least
Important

Not
Important

Brand Name of the

company
Premium
Policy Term
Claim
history

settlement

Responsiveness of
the company post
sales
Riders
Charges

15. Would you like to invest in Pnb Metlife?

Yes

No

16. If, YES what will make you to invest in Pnb Metlife?
Brand image
Transparency

Products

Returns

Suitability

Claim settlement history

17. Among the following Life Insurance Companies in which company

you will be willing to take a life insurance? Rank according to your preference.
103 | P a g e

Pnb Metlife

HDFC Standard Life

Birla Sunlife

SBI Life

ICICI Prudential

TATA- AIG

Reliance

Bajaj Allianz

Max New York

Sahara

INGVysya
Vysya
ING

LIC

Kotak
Mahindra

Max New York

Aviva Dabur

AXA-Bharti

18. Suggestions _______________________________________

________________________________________________
________________________________________________

Thank you

VARIOUS PAMPHLETS DESIGNED

104 | P a g e

Figure 21

Figure 22

105 | P a g e

Figure 23

RANKING OF THE DIFFERENT INVESTMENT TOOLS

Bonds and debentures
Equity/ Shares
Mutual fund
Public Provident Fund
Post office
Insurance
Fixed Deposit
Real estate
Gold & silver

16
9
5
7
19
35
9

6
21
6
12
15
18
13
9

8
18
10
7
29
16
12

9
9
13
12
20
10
21
5

5
2
12
17
26
7
4
11
4
17

6
4
24
5
18
12
3
7
12
15

7
21
19
6
8
8
2

8
26
6
10
5
26

8
28

13
14

9
47
5
9
8
8
3
8
12

Modal Rank
9
6
2
5
8
3
1
4
7

Table 42

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GLOSSARY
Accidental Death Benefit - In a life insurance policy, benefit in addition to the death benefit paid to the
beneficiary, should death occur due to an accident. There can be certain exclusions as well as time and age
limits.
Actuary: The actuary is a specialist who coalesces an understanding of risks and mathematical technique to
develop financial products to manage these risks, price these products. He helps in conniving insurance plans
and then estimates the financial risk of the company which it takes while selling an insurance policy.
Claim: It is the sum which an insurer has to pay against a policy.
Endowment policy: Endowment policies entitle the insured to receive the amount of the policy on his reaching
a certain age and premiums also stops. If death occurs earlier, amount of the policy will be paid at that time and
payment of premium will also stop at that time.
Free Look Period: The free-look provision to a policy means a customer has 15 days from the date of the
policy's receipt to revisit his purchase decision. This would essentially mean that the policyholder has the time
to go through the policy fine print, understand how the policy is going to work and convince him that he
needs such a policy before deciding to commit funds every year over the plan tenure. If a customer does
decide within the 15-day free-look period that the policy he purchased is not suited to his requirements, the
policy can be returned to the company. However, the entire premium paid by him will not be refunded. Costs
incurred by the insurance company in the form of stamp duty charges and the cost of a medical check-up, if
any, will be deducted before the payout is made.
Group insurance: In Group Insurance, a large number of persons are covered under one contract. The
persons covered should belong to an identifiable group, like employees in an organization, members of a club
or an organization. The insurance contract is between the insurer and the person representing the group.
Indemnity: Restoration to the victim of a loss by payment, repair or replacement.
Insurance density: Insurance density is defined as per capita expenditure on insurance premium i.e. premium
per capita.
Insurance penetration: It is defined as insurance premium as a share of gross domestic product.
Partial Withdrawal: It is a facility provided by life insurance companies in case a person requires funds from
the existing policy. There is a maximum cap available to it as per IRDA; a person can withdraw an amount
maximum of 25 % of his annual premium subject to current year's premium paid. Here the sum assured can
decrease as per proportion to the withdrawal made in some plans. Partial withdrawal is exempt from tax
Policy: The written contract effecting insurance or the certificate thereof, by whatever name called, and
including all clause, riders, endorsements, and papers attached thereto and made a part thereof.
Premium: A periodic payment made on an insurance policy.
107 | P a g e

Reinsurance: It refers to placing a part of the risk by an insurer with another insurer. The object is to reduce
the possible loss to be borne by the original insurer, who pays premiums at the ordinary rates to the reinsurer.
Reinsure must pay commission to the original insurer.
Rider: A rider is a clause or condition that is added to a basic policy providing an additional benefit, at the
choice of the proposer. For example, a provision that in the event of death of the life assured by accident, the
Sum Assured would be double, can be a rider on an Endowment policy. This rider can be added on to a policy
under any plan.
The option to participate in valuation surplus can also be offered as a rider.
Risk: It is defined as an uncertainty of a financial loss. It is the unintentional decline in or disappearance of
value arising from contingency
Salary Savings Scheme (SSS): The SSS is intended to help salary earners. The SSS provides for deduction of
the premium every month from the salary. The employee gets his salary only after deduction of premium. The
employer sends to the insurer all premia deducted from all employees in a lump sum. The deduction becomes
compulsory like Income Tax, Provident Fund and other statutory deductions.
Term Life Insurance Policy: Term life insurance policy covers risk only during the selected term period. If the
policyholder survives the term, the risk cover comes to an end. Term life policies are primarily designed to
meet the needs of those people who are initially unable to pay the larger premium required for a whole life or
an endowment assurance policy. No surrender, loan or paid-up values are granted under term life policies
because reserves are not accumulated. If the premium is not paid within the grace period, the policy lapses
without acquiring any paid-up value.
Unit Linked Insurance Plans (ULIP): Unit linked insurance plan (ULIP) is life insurance solution that
provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is
represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time
varies according to the value of the underlying assets at the time.
Underwriting: Insurance underwriting is the process of choosing who and what the insurance company
decides to insure. This is based on a risk assessment. It is pretty much the "behind the scenes" work in an
insurance company where they determine who is insured and how much in insurance premiums they will
charge the insured person. Insurance underwriting also involves choosing who the insurance company will
not insure.
Waiver of Premium: A clause in an insurance policy that waives the policyholder's obligation to pay any
further premiums should he or she become seriously ill or disabled. A waiver of premium allows people to
benefit from an insurance policy, even when they cannot work.
Whole life policy: It is the policy under which the amount of policy will be paid only on death of the insured.
Premiums may be payable throughout the life or for a limited period.

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