Project Report On RELIANCE LIFE INSURANCE COMPANYLIMITED

SUBMMITED FOR

Partial fulfillment of the requirements of two years full timeMaster of Business Management (MBA)

CONTENTS Preface-------------------------------------------------- (3)Certificate----------------------------------------------- (4)Acknowledgement------------------------------------(5)Executive Summary------------------------------------ (6)Index---------------------------------------------------- (7)

EXECUTIVE SUMMARY Anil Dhirubhai Ambani Group (ADAG) announces the acquisition of 100 percent shareholding in AMP Sanmar Life Insurance Company Limited.Reliance Life Insurance Company Limited is officially launched onFebruary 1, 2006. This was after obtaining the required regulatiry approvalsfrom the Registrar of Companies and the Insurance Regulatory andDevelopment Authority. Reliance Life Insurance is the part of the RelianceCapital.Reliance Life Insurance has plenty of plans on the anvil. It has also 118 branches, with strong presence in South and a bouquet of products cateringsavings protection and investment need of individuals and corporate. Thehead-office of it is at Chennai.The company has already added 600 employees in addition to the 1000 plusstaff of the erstwhile AMP Sanmar Life Insurance Company Limited.Reliance Life Insurance aims to be the consumers preferred life insurer byunderstanding and meeting his needs.Think Bigger, Think Better! INDEX

1.1 MEANING OF INSURANCE

Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Insurance is a collective bearing of risk. Insuranceis a financial device to spread the risks and losses of few people among alarge number of people, as people prefer small fixed liability instead of biguncertain and changing liability.Insurance can be defined as a legal contract between two parties wherebyone party called insurer undertakes to pay a fixed amount of money on thehappening of a particular event, which may be certain or uncertain. Theother party called insured pays in exchange a fixed sum known as premium.Insurance is desired to safeguard oneself and ones family against possiblelosses on account of risks and perils. It provides financial compensation for the losses suffered due to the happening of any unforeseen events

1.2 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial market.Insurance services play predominant role in the process of financialintermediary. Today insurance industry is one of the most growing sectors inIndia. There is lot of potential in the Indian Insurance Industry.There are many issues, which require study. The scope of the study of insurance industry of India would be very great as there are ongoingdevelopments in the industry after the opening of the sector.The major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26% to 49% in the insurance sector. Government may in near future allow 49% FDI in Insurance. This would lead to more capital inflow by foreign partners.Another major issue is the effects on LIC after the entry of private players inthe market. Though market share of LIC has been affected, it has improvedin terms of efficiency.There are number of other hot topics like penetration of Health Insurance,Rural marketing of insurance, new distribution channels, new productranges, insurance brokers regulation, incentive scheme of developmentofficers of LIC etc. So it offers lot of scope for studying the insuranceindustry.Right now the insurance industry has great opportunities in a country likeIndia or China which huge population. Also the penetration of insurance in India is very low in both life and non-life segment so there is lot potential to be tapped.Before starting the discussion on insurance industry and related issues, wehave to start with the basics of insurance. So first we understand what isinsurance ? How the word insurance is different from the word assurance ?etc.

1.3
DIFFERENCE BEETWEN INSURANCEAND ASSURANCE
Assurance is older in history and it was used to describe all types of insurances. From 1826, the term assurance came to be used only for the riskscovered by life insurance and the term insurance was exclusively used todenote the risks covered by marine, fire, etc.The word assurance indicated certainty. In life insurance, there is anassurance from the insurance company to make payment under the policyeither on the maturity or at earlier death. On the other hand the wordinsurance was used to denote indemnity type of insurances where theinsurance company was liable to pay only in case of the loss damage the property.The insured event was bound to happen sooner or later under assurance butthe event insured against may or may not happen under insurance

History of insurance
The concept of insurance is believed to have emerged almost 4500 years agoin the ancient land of Babylonia where traders used to bear risk of the carvan by giving loans, which were later repaid with interest when the goodsarrived safely.The concept of insurance as we know today took shape in 1688 at a placecalled Lloyds Coffee House in London where risk bearers used to meet totransact business. This coffee house became so popular that Lloyds becamethe one of the first modern insurance companies by the end of the eighteenthcentury.Marine insurance companies came into existence by the end of theeighteenth century. These companies were empowered to write fire and lifeinsurance as well as marine. The Great Fire of London in 1966 caused hugeloss of property and life. With a view to providing fire insurance facilities,Dr. Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire office.The early history of insurance in India can be traced back to the Vedas. TheSanskrit term Yogakshema (meaning well being), the name of LifeInsurance Corporation of Indias corporate headquarters, is found in the RigVeda. The Aryans practiced some form of community insurance around1000 BC.Life insurance in its modern form came to India from England in 1818. TheOriental Life Insurance Company was the first insurance company to be setup in India to help the widows of European community. The insurance