`

University of Mumbai

“A study on Insurance and Risk management with

Birla Sunlife Insurance Company”
Bachelors of Management Studies
Semester VI
Submitted
In partial fulfillment of requirement for the
Award of degree of
Bachelor of management studies

By

ALOKE LOKESH DEBNATH

Roll no 08

Under the Guidance of

PROF. NITIN PAGI

K.G JOSHI COLLEGE OF ARTS &

N. G. BEDEKAR COLLEGE OF COMMERCE
THANE
2019-2020

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 CERTIFICATE

This is to certify that MR.ALOKE LOKESH DEBNATH Roll no. 08 of

Third year BMS Semester-V (2017-2018) has successfully completed the
project on “A study on Insurance and Risk management with Birla
Sunlife Insurance Company.”Under the guidance of MR. NITIN
PAGI

Internal Examiner External Examiner

Co- ordinator (College Seal) Principal

Place:-
Date:-

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 ACKNOWLEDGEMENT

It gives me immense pleasure while submitting the project report on the topic. A
study on insurance and risk management with special Preference to Birla Sunlife
Insurance Private Limited Company.

I wish to take this opportunity to express my deep sense of gratitude to Prof. Jyoti
Chand for her help in all stages of preparing this project. She has given the
tremendous helping hand in completing this difficult task. I had easy or anytime
access to such knowledgeable and guided spirit.

I feel there is ample scope of improvement upon a work of this nature and I shall be
thankful if any suggestion is offered for its improvement

ABHISHEK PANDIT THAKUR

Signature of student

THAKUR ABHISHEK PANDIT

ROLL NO.2140

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 CONTENT
Serial Topic Name Page
No. No.
1. Chapter 1: Internship Report 9
2.  Company Profile 11
3.  Organizational Structure 18
4.  Types Of Products Offered 21
5.  Department & Learner’s Experience 24
6. Chapter 2: Introduction To Topic 25
7.  Introduction To Insurance 26
8.  Purpose of Insurance 27
9.  Definition of Insurance 29
10.  Understanding Insurance 30
11.  How Insurance works 31
12.  Characteristics of Insurance 32
13.  Fundamentals Principles of Insurance 33
14.  Insurance Analysis 37
15.  Introduction to Risk Management in Insurance 40
16.  The Evolution of Risk Management 43
17.  Types of Risk managers and Types of Risk 46
18.  Assessing Risk associated with doing Business 49
19.  The Need of Risk Management 52
20.  Risk Management Methods 54
21.  Emerging Areas of Risk Management 57
22.  Transferring Business risk 61
23. Chapter 3: Research Methodology 62
24.  Questionnaire 63
25. Chapter 4: Data Analysis & Interpretation 66
26. Chapter 5: Conclusion & Recommendations 79
27.  Bibliography 80

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INTERNSHIP CERTIFICATE

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Page | 6
Page | 7
 COMPANY PROFILE:-

Birla Sun Life Insurance Company Limited

Type Private

Industry Insurance

Founded 2000

Founders Aditya Vikram Birla

Elphinstone Road, Mumbai,

Headquarters
India

Kumar Mangalam Birla

(Chairman)
PankajRazdan (MD and CEO)
Amit Jain (Chief Financial
Key people
Officer)

Rajesh Nambiar (Chief

Marketing Officer)

Services Insurance

Total assets ₹300,000,000,000 (May 2015)

Aditya Birla Group and Sun

Parent
Life Financial Inc.

Website insurance.birlasunlife.com

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 BIRLA SUNLIFE INSURANCE COMPANY HISTORY:

Birla Sun Life Insurance Company Limited (BSLI) is a joint

venture between the Indian conglomerate Aditya Birla Group, and Sun
Life Financial Inc., an international financial service organization from
Canada. BSLI has a customer base of over two and half million policy
holders.
Birla Sun Life Insurance Company Limited was founded in 2000. The
company is based in Mumbai, India. It is a joint venture between Indian
Aditya Birla Group and Canadian Sun Life Financial Inc. In April 2016,
Sun Life Financial increased their stake in Birla Sun Life Insurance to
49%.

Sun Life Financial

Sun Life Financial, Inc. is a Canada-based financial services company
known primarily as a life insurance company. It is one of the largest life
insurance companies in the world, and also one of the oldest with the
history spanning back to 1865. Sun Life Financial has a strong presence in
investment management with over CAD$734 billion in assets under
management operating in a number of countries. Sun Life had about $734
billion of assets under management as of Dec. 31 2014 including mutual
funds and insurance-unit holdings.

The Aditya Birla Group

The Aditya Birla Group is an Indianmultinationalconglomerate named
after Aditya Vikram Birla, headquartered in the Aditya Birla Centre in
Worli, Mumbai, India. It operates in 40 countries with more than 120,000
employees worldwide. The group was founded by Seth Shiv Narayan Birla
in 1857. The group interests in sectors such as viscose staple fibre, metals,

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cement (largest in India), viscose filament yarn, branded apparel, carbon
black, chemicals, fertilizers, insulators, financial services, telecom (third
largest in India), BPO and IT services. The group had a revenue of
approximately US$41 billion in year 2015.

Aditya Birla Financial Services Group (ABFSG) is the umbrella

brand for all the financial services business of The Aditya Birla Group.
They have a strong presence across the life insurance, asset management,
lending (excluding Housing), housing finance, equity and commodity
broking, wealth management and distribution, online money management
portal—Aditya Birla Money MyUniverse, general insurance advisory and

private equity and health insurance businesses. ABFSG is committed to

serve the end-to-end financial services needs of its retail and corporate
customers. In FY 2013–14, ABFSG reported consolidated revenue from
these businesses at just under ₹70 billion (US$1.1 billion) and profits of
about ₹7.5 billion (US$120 million). Anchored by over 14,000 employees
and trusted by over 6 million customers, ABFSG has a nationwide
reachthrough 1,500 points of presence and about 130,000 agents/channel
partners.

Growth

BSLI is the first Indian Insurance Company to introduce "Free Look

Period", by which consumer can return the policy to an insurance company
within this period after receiving the policy. “Free Look Period” was later
made mandatory by Insurance Regulatory and Development Authority of
India for all other life insurance companies In 2013. Additionally, BSLI
pioneered the launch of Unit Linked Plan. BSLI has a policy of disclosing
their portfolio on a monthly basis. On 5 February 2015, Birla Sun Life
Insurance signed an IT outsourcing deal with International Business
Machines Corporation (IBM) with a view to leveraging mobility and cloud
solutions developed by IBM Research and the IBM India Software Lab.

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 AWARDS AND RECOGNITION of BSLI:

'Gold Trophy' for Financial Reporting by the Institute of

Chartered Accountants of India (ICAI) in 2012.
Media Abby Awards at Goa Fest Advertising Agencies Association of
India & Advertising Club Bombay (2011)
Grand Midas at the Midas Awards 2013 in Public Service Category for
work titles as 'Death Track'.
Gold Midas Awards 2013 in Direct Mail/Collateral competition for
work titled as 'Karva Chauth'.

VISION AND VALUES OF ADITYA BIRLA FINANCIAL SERVICES:

Vision:

To be a premium global conglomerate, with a clear focus on each of the

businesses.
Mission:

To deliver superior value to our customers, shareholders, employees and

society at large.
Values:

 Integrity: Acting and taking decisions in a manner that is fair and honest.
Following the highest standards of professionalism and being recognised for
doing so. Integrity for us means not only financial and intellectual integrity, but
encompasses all other forms as are generally understood.
 Commitment: On the foundation of Integrity, doing all that is needed to
deliver value to all stakeholders. In the process, being accountable for our own

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 actions and decisions, those of our team and those in the part of the
organization for which we are responsible.
 Passion: An energetic, intuitive zeal that arises from emotional engagement
with the organization that makes work joyful and inspires each one to give his
or her best. A voluntary, spontaneous and relentless pursuit of goals and
objectives with the highest level of energy and enthusiasm.
 Seamlessness: Thinking and working together across functional groups,
hierarchies, businesses and geographies. Leveraging diverse competencies and
perspectives to garner the benefits of synergy while promoting organizational
unity through sharing and collaborative efforts.
 Speed: Responding to internal and external customers with a sense of urgency.
Continuously striving to finish before deadlines and choosing the best rhythm
to optimize organizational efficiencies.

background all juggled together from Aditya Birla family.

If a person is a self-driven professional with the right attitude, BSLI has

the right opportunity for that person.

TYPE OF COMPANY:

Birla Sun Life Insurance Company Limited (BSLI) is a joint

venture between the Indian conglomerate Aditya Birla Group, and Sun
Life Financial Inc., an international financial services organizations from
Canada.
It is a company providing insurance products and other financial services.

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ORGANIZATIONAL STRUCTURE OF BIRLA SUNLIFE
INSURANCE:

CEO (CHIEF CFO (CHIEF FINANCIAL CDO (CHIEF DESIGN

EXECUTIVE OFFICER) OFFICER) OFFICER)

R.M. (Regional Z.M. (Zonal Manager) H.O.S. (Head Of Sales)

Manager)

B.D.M. (Business
S.A.M. (Senior Agency
B.H. (Branch Head) Development Manager)
Manager)
or B.P. (Business
Partner)

A.A.M. (Assistant
A.M.
Agency Manager)
(Agency Manager)

I.A.
(Insurance Advisors)

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KEY PERSONS OF BIRLA SUNLIFE INSURANCE:

Kumar Mangalam Birla,

Chairman,
Aditya Birla Group

Ajay Srinivasan,
The Chief Executive-
Financial Services of Aditya
Birla Group

PankajRazdan,
Chief Executive Officer of Birla
Sun Life Insurance Company
Limited

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 BIRLA SUNLIFE BIRLA SUNLIFE
ASSET INSURANCE
MANAGEMENT LTD

ADITYA BIRLA ADTIYA BIRLA

MONEY FINANCE LTD

ADITYA BIRLA ADITYA BIRLA

PRIVATE HOUSING
EQUITY FINANCE

ADITYA BIRLA
INSURANCE
BROKERS LTD

The above are some of the important companies under the

Aditya Birla Finance Group umbrella company

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 TYPES OF PRODUCT & SERVICE OFFERED BY BSLI:

INSURANCE PLANS:

1) PROTECTION PLANS:
Secure your family’s future in this increasingly uncertain world and don’t leave
their dreams to fate.

Example:BSLI Protector Plus Plan:

A plan that assures financial security for your family while keeping pace with your
growing needs, and rewards you for a healthy lifestyle

2) SAVINGS WITH PROTECTION PLANS:

Strike the right balance between living comfortably today and staying
financially secure in the future with small disciplined savings at regular
intervals

Example:BSLI Vision MoneyBack Plus Plan:

In our life when there is so much uncertainty around us, there's nothing more
reassuring than knowing that not only is your money safe, but also that you will get
more than what you have invested.

3) CHILDREN’S FUTURE PLANS:

Give your child the freedom to pursue his/her real passion by ensuring that you give
him the right financial support

Example:BSLI Vision Star Plan:

Some benefits are guaranteed and some benefits are variable with bonuses based on
the future performance of the participating business and economic conditions.

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 4) RETIREMENT PLANS:
Plan your retirement well to build a good corpus because during retired life,
income stops but expenses don’t.

Example: BSLI Empower Pension Plan:

Presenting the BSLI Empower Pension Plan, a plan designed especially to
ensure that you remain in control of your destiny even during the second
innings of life. A unit linked, non-participating pension plan it is simple,
hassle-free and helps you accumulate your premiums and the investment
returns into a corpus for your retirement; so that you can focus on your goals,
and enhance your savings for a secure future.

5) HEALTH & WELLNESS PLANS:

Plan and ensure that you spend time with your loved ones when they need you the
most rather than worrying about medical expenses.

Example: BSLI Cancer Shield Plan:

Like all the uncertainties in life now you can plan for cancer at every stage with Birla
Sun Life Cancer Shield Plan. It’s a promise that we will always be by your side.

6) WEALTH WITH PROTECTION PLANS:

Secure your family’s dreams and live through life’s highs and lows with
confidence while you reach your financial milestones as planned.

Example: BSLI Wealth Assure Plan:

Birla Sun Life Insurance Wealth Assure Plan, a protection and savings plan, that
enables your wealth to grow steadily over time, providing you and your family with a
secure financial future to meet your needs at different stages of life.

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Page | 18
 INTRODUCTION TO INSURANCE

Having the right kind of insurance coverage is an essential part of building

a solid financial future. Insurance protects us from risk and guarantees
that, once we accumulate assets, we will be able to keep them. Many
teenagers and young adults may forego insurance if they view it as a little
more than an additional expense instead of looking at the cost of not being
insured. The basic definition of insurance is risk management. The first
two activities are geared toward examining the risk associated with
adulthood and preparing young people to manage themselves successfully.
Insurance, in law and economics, is an form of risk management primarily
used to hedge against the risk of a loss, from one entity to another, in
exchange for a premium. Insurer is the company that sells the premium, to
be charged for a certain amount of insurance coverage. Risk management,
the practice of appraising and controlling risk, has evolved as a discrete
field of study and practice.

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 PURPOSE OF INSURANCE:

The purpose of insurance is to protect the financial well being of you and
your dependents in the case of unexpected loss. There are many different
types of insurance; some forms are required by law and some are optional.
When you agree to the terms of an insurance policy, you are creating a
contract between yourself and the company. You pay the company
periodic payments policy, called premiums, and in return the company will
pay you a sum of money upon the occurrence of a specific event.
Once you have contacted an insurance company and asked about the
different policy types they offer, you’ll receive a quote which outlines the
total amount of money you’ll need to pay over the term policy. After you
have agreed to pay this amount and the insurance company has agreed to
insure you, you’ll receive a copy of the policy listing the term and
conditions of the policy.
In the unfortunate event that an insured incident occurs, you’ll make a
claim for the payment from your insurance company. You’ll receive the
amount for which incident you’re insured, minus a deductible that you
must pay for each claim. When purchasing insurance coverage, it’s
important to keep in mind that higher deductible are associated with lower
premiums and vice versa.

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DEFINITION OF INSURANCE:

Insurance, one of the financial risk management forms, allows companies

to pay premium to a third party, which assumes the risk if that risk
materialises. If it does not, companies can benefits from a favourable trend
in the parameter covered (exchange rate, interest rates, solvency of a
debtor, etc.). Conceptually, insurance is based on the techniques of
options; the insurance premium paid corresponds to the value of the option
purchased.

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UNDERSTANDING INSURANCE:

What is insurance? Simply stated, it’s protection against a financial loss.

There are many risks associated with day-to-day living –floods, fire, auto
accidents, lawsuits, illness –and insurance can help you plan more
confidently for the future with the assurance of knowing that you are
protected should the unexpected loss occur.

Insurance offers a broad range of insurance products and coverage for your
auto, home, and life needs. Through our independent agents, The ERIE
sells insurance policies that protects an insured against financial hardship
caused by losses such as accidents, fires, weather-related disasters and
death.

The business of insurance is risk. Insurance providers agree to cover the

risk involved with one type of property or event for policyholders. A
policy is your contract with insurance company that states what you must
pay for and what they agree to cover if damage or loss occurs. The policy
is paid for by a fee called premium, which is set amount that must be paid
monthly, semi-annually or annually. The premium from every
policyholder is put into a pool of funds managed by the insurance
provider. When an insured has an accident or other event that requires
reimbursement, the provider withdraws money from the pool to cover the
expense. It is important to remember that not every insurance policy
covers every risk. There are important exclusion and limits in each
contract. Keep in mind that you should read your policy carefully to
determine if it covers all of your needs.

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HOW INSURANCE WORKS:

Insurance helps individuals and organizations to reduce the financial risk

of an adverse event, e.g. the cost of rebuilding a house after a fire, or the
cost of hospital care in the event of illness.

Insurance involves two parties:

1. The insurance company (also known as the insurer)
2. The policyholder

The policyholder purchases an insurance policy by paying a premium

to the insurance company. The premium is calculated by the
insurance company and reflects the level of risk. In return for the
premium, the insurance company promises to pay the policyholder
an amount of money (called a benefit or claim payments) if the
policyholder were to suffer a financial loss due to a specified event.

For example:
A policyholder might insure his house for $200000 against the risk of
fire. The policyholder would pay a premium to the insurance
company. If the house were to be destroyed by fire, the insurance
company would pay a benefit to the policyholder of $200000 to the
meet the cost of rebuilding.

There are two very important ideas about insurance:

1. The insurance company can afford to carry the risk because it sells
a large number of similar policies.
2. Each policyholders pays a premium greater than the expected
amount of the benefit.

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In practice, the insurance company does not know the true probability of a
claims. However, an actuary can estimate probability by considering the
number of claims in recent years. The example above was also rather
artificial because we only considered one level of claim payment will
depend on the severity of the fire- the cost of repairs after a minor fire will
be many time less than cost of rebuilding after complete destruction of the
house.
So, the actuary will need to consider two aspects to the expected claims;
1. The claims frequency i.e. how large is a claims?
2. The claims severity i.e. how large is a claim likely to be?
In statistical terms, we combine a frequency distribution with a
severity distribution to obtain a loss distribution, which describes the
likelihood of a claim and likely size of claims.

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 CHARACTERISTICS OF INSURANCE:

Commercially insurable risk typically share seven common

characteristics.

1. A large number of homogenous exposure units:

The vast majority of insurance policies are provided for individual

members of very large classes. Automobile insurance, for example,
covered about 175 million automobiles in the United States in 2004.
The existence of large number of homogenous exposure units allows
insurers to benefit from the so-called ‘law of large numbers,’ which
in effect states that as the number of exposure units increases, the
actual results are increasingly likely to become close to expected
results. There are exceptions to this criterion. Llyod’s of London is
famous for insuring life or health of actors, actresses, sports figures.
Satellites launch insurance covers events that are infrequent. Large
commercial property policies may insure exceptional properties for
which there are no ‘homogenous’ exposure units. Despite falling in
this criterion, many exposures like these are generally considered to
be insurable.

2. Definite Loss:

The event that gives rise to the loss that is subject to insurance
should, at least in principle, take place at a known time, in known
place, and from a known cause. The classic example id death of an
insured on a life insurance policy. Fire, automobile accidents, and
worker injuries may all easily meet this criterion. Other type of
losses may only be definite in theory. Occupational disease, for
insurance, may involve prolonged exposure to injurious conditions

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 where no specific time, place or cause is identifiable. Ideally, the
time, place and cause of a loss should be clear enough that a
reasonable person, with sufficient information, could objectively
verify all three elements.

3. Accidental Loss:

The event that constitutes the trigger of a claim should be fortuitous,

or at least outside the control of beneficiary of the insurance. The
loss should be ‘pure’ in the sense that it results from an event for
which there is only the opportunity for cost. Events that contain
speculative elements, such as ordinary business risk, are generally
not considered insurable.

4. Large Loss:

The size of the loss must be meaningful from the perspective of the
insured. Insurance premiums need to cover both the expected cost of
losses, plus the cost of issuing and administering the policy,
adjusting losses, and supplying the capital needed to the reasonably
assure that the insurer will be able to pay claims. For small losses
these latter costs maybe several times the size of the expected cost of
losses. There is a little point in paying such costs unless the
protection offered has real value to a buyer.

5. Affordable Premium:

If the likelihood of an insured event is so high, or the amount of

protection, it is not likely that anyone will buy insurance, even if on
offer. Further, as the accounting profession formally recognizes in
financial accounting standards, the premium cannot be so large that
there is not a reasonable chance of a significant loss to the insurer. If

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 there is no such chances of loss, the transaction may have the form of
insurance, but not the substance.

6. Calculable Loss:

There are two elements that must be at least estimable, if not

formally calculable: the probability of loss, and the attendance cost.
Probability of loss is generally an empirical exercise, while cost has
more to do with the ability of a reasonable person in possession of a
copy of the insurance policy and a proof of loss associated with a
claim presented under that policy to make a reasonably definite and
objective evaluation of the amount of the loss recoverable as a result
of the claim.

7. Limited Risk of Catastrophically Large Losses:

The essential risk is often aggregation. If the same event can cause
losses to numerous policyholders of the same insurer, the ability of
that insurer to issue policies becomes constrained, not by factors
surrounding the individual characteristics of a given policyholder,
but by the factors surrounding the sum of all policy holders so
exposed. Typically, insurers prefer to limit their exposure to a loss
from a single event to some small portion of their capital base, on the
order of 5 percent. Where the loss can be aggregated, or an
individual policy could produce exceptionally large claims, the
capital constraints will restrict an insurers appetite for additional
policyholders.

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FUNDAMENTAL PRINCIPLES OF INSURANCE:

1. Indemnity:

A contract of insurance contained in a fire, marine, burglary or any

other policy (excepting life insurance and personal accident and
sickness insurance) is a contract of indemnity. This means that the
insured, in case of loss against which the policy has been issued shall
be paid the actual amount of loss not exceeding the amount of policy
has been issued, i.e. he shall be fully indemnified. The object of
every contract of insurance is to place the insured in same financial
position, as nearly as possible, after the loss, as if the loss had not
taken place at all. It would be against public policy to allow an
insured to make a profit out of his loss or damage.

2. Utmost good faith:

Since insurance shifts risk from one party to another, it is essential

that there must be atmost good faith and mutual confidence between
the insured and the insurer. In a contract of insurance the insured
knows more about the subject matter of the contract than the insurer.
In a contract of insurance the insured knows more about the subject
matter of the contract than the insurer. Consequently, he is duty
bound to disclose accurately all material facts and nothing should be
withheld or concealed. Any fact is material, which goes to the root of
the contract of insurance and has a bearing on risk involved. It is
only when the insurer knows the whole truth that he is in a position
to judge whether he should accept the risk and what premium he
should charge. If that were so, the insured might be tempted to bring
about the event insured against in order to get money.

3. Insurable interest:

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 A contract of insurance effected without insurable interest is void.
It means that insured must have actual pecuniary interestand not a
mere anxiety or sentimental interest in the subject matter of the
insurance.The insured must be so situated with regard to thething
insured that he would have benefit by the law its existence and
loss from its destruction. The owner of a ship run a risk of losing
his ship, the character of the ship runs a risk of losing his freight
and the owner of the cargo incurs the risk of losing his goods and
profit.

4.Causa proxima:

The rule of causa proxima means that the cause of the loss must be
proximate or immediate and not remote. If the proximate cause of the
loss is a peril insured against, the insured can recover. When a loss
has been bought about by two or more causes, the question arises as
to which is the causa proxima, although the result could not have
happened without the remote cause. But if the loss is brought about
by any cause attributable to the misconduct of the insured, the insurer
is not liable.

5.Risk:

In a contract of insurance the insurer undertakes to protect the

insured from a specific loss and the insurer receive a premium for
running the risk of such loss. Thus, risk must attach to a policy.

6.Mitigation of loss:

In the event of some mishap to the insured property, the insured must
take all necessary steps to mitigate or minimize the loss, just as any
prudent person would do in those circumstances. If he does not to do
so, the insurer can avoid the payment of loss attributable to his
negligence. But it must be remembered that thought the insured is

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 bound to do his best for his insurer, he is, not bound to do so at the
risk of his life.

7.Subrogation:

The doctrine of subrogation is a corollary to the principle of

indemnity and applies only to fire and marine insurance. According
to it, when an insured has received full indemnity in respect of his
loss, all rights and remedies which he has against third person will
pass on to the insurer and will be exercised for his benefit until he
recoups the amount he has paid under the policy. It must be clarified
here that the insurer’s right of subrogation arises only when he has
paid for the loss for which he is liable under the policy and this right
extend only to the rights and remedies available to the insured in
respect of the thing to which the contract of insurance relates.

8. Contribution:

Where there are two or more insurance on one risk, the principle of
contribution comes into play. The aim of contribution is to distribute
the actual amount of loss among the different insurers who are liable
for the same subject matter. Any one insurer may pay to the insured
the full amount of the loss covered by the policy and then become
entitled to the contribution from his co-insurers in proportion to the
amount which each has undertaken to pay in case of loss of the same
subject matter.

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 INSURANCE ANALYSIS:

Life Insurance and General Insurance

They are one of the important parts of good investment portfolios. Life
insurance is an investment for the security of life. The main objective of
other investment avenues is to earn a return but the primary objective of
life insurance is to secure our families against unfortunate event of our
death. It is popular in individuals. Other kinds of general insurances are
useful for corporate. There are different types of insurances which are as
follows:

 Endowment Insurance Policy:An endowment policy is a life

insurance contract designed to pay a lump sum after a specific term
(on its 'maturity') or on death. Typical maturities are ten, fifteen or
twenty years up to a certain age limit. Some policies also pay out in
the case of critical illness.
 Money Back Policy:Money back policy is a type of traditional life
insurance plan. It provides the dual benefit of insurance and
investment. It offers the lump sum assured at the maturity of the
policy or in case of early death of the policy holder.
 Whole Life Policy: It’s a life insurance policy which is guaranteed to
remain in force for the insured's entire lifetime, provided required
premiums are paid, or to the maturity date.
 Term Insurance Policy:Term insurance, a type of life insurance,
provides coverage for a certain period of time or years. If the insured
dies over the policy tenure a death benefit (or sum assured) is paid
out.
 General Insurance for any kind of assets: Insurance contracts that do
not come under the ambit of life insurance are called general
insurance. The different forms of general insurance are fire, vehicle,
marine etc.

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 Advantages of Insurance:

1. Provides economic protections: Insurance provides economic and

financial protection to the insured against the unexpected losses in
consideration of nominal amount called premium. It provides
financial protection to the nominee in case of the pre-matured death
of insured. It also covers the loss of properties due to theft, fire,
accident and other natural calamities.
2. Shares risks:
People are exposed to various kinds of risks and uncertainties which
may cause large losses. It is impossible to eliminate risks and
uncertainties altogether but it can be reduced or shared. Insurance is
a co-operative device, which helps to share the risks among the
insured. Thus, the insurance company reduces the risk of the insured
in exchange for small premium.
3. Maintains standard of living:
Insurance provides financial protection against an unexpected risk of
losses due to which people can maintain their living standard. The
insurance company provides a safeguard in terms of money to avoid
the unfortunate financial crisis.
4. Encourages saving:
An insured person pays the amount of premium in time as stated in
the agreement which encourages for developing a saving habit of
persons. Hence, insurance is a means of encouraging regular saving
as it helps to reduce unnecessary expenses.
5. Eliminates dependency:
Due to death or destruction of properties, the family suffers from
unbearable and non-compensational table losses. The insurance
protects against those unbearable losses. The life insurance policy
gives full financial support to the dependent in case the death of the
insured which helps to eliminate the dependency of people.

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 Disadvantages of Insurance:

1. It does not compensate all types of losses which caused biased

attitude to insured by insurance company.
2. It takes more time to provide financial compensation because lengthy
legal formalities.
3. Although insurance encourages savings, it does not provide the
facilities that are provided by bank.
4. It intentionally tries to compensate as less as possible to the sufferer
with the aim of maximizing profit rather than maximizing well-being
of the insured.
5. It may lead to the crimes in the society as the beneficiaries of the
policy may be tempted to commit crimes to receive the insured
amount.
6. Sometimes, the total amount of premium might be higher than the
policy amount receivable on maturity.

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 INTRODUCTION TO RISK MANAGEMENT IN
INSURANCE:

Risk management is a systematic process of identifying and assessing

company risks and taking actions to protect a company against them. Some
risk managers define risk as the possibility that a future occurrence may
cause harm or losses, while noting that risk also may provide possible
opportunities. By taking risks, companies sometimes can achieve
considerable gains. However, companies need risk management to analyse
possible risk in order to balance potential gains against potential losses and
avoid expensive mistakes. Risk management is best used as a preventive
measure rather than as a reactive measure. Companies benefit most from
considering their risk when they are performing well and when markets are
growing in order to sustain growth and profitability.

The task of the risk manager is to predict and enact measures to control or
prevent, losses within a company. The risk management process involves
identifying exposures to potential losses, measuring these exposures, and
deciding how to protect the company from harm given nature of the risk
and the company’s goals and resources. While companies face a host of
different risks, and some more important than others. Risk managers
determine their importance and ability to be affected while identifying and
measuring exposures. For example, the risk of flooding in Arizona would
have low priority relative to other risks a company located there might
face. Risk managers consider different methods of controlling or
preventing risks and then select the best method given the company’s
goals and resources. After the method is selected and implemented, the
method must be monitored to ensure that its produces the intended results.

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 THE EVOLUTION OF RISK MANAGEMENT:

The field of risk management emerged in the mid-1970s, evolving

from the older field of insurance management. The term risk
management was adopted because the new field has a much wider
focus than simply insurance management. Risk management includes
activities and responsibilities out-side of the general insurance
domain, although insurance is an important part of it and insurance
agents often serve as risk managers. Insurance management focused
on protecting companies from natural disaster and basic kinds of
exposures, such as fire, theft, and employee injuries, whereas risk
management focuses on these kinds of risk as well as other kinds of
costly losses, including those stemming from product liability,
employment practices, environmental degradation, accounting
compliance, offshore outsourcing, currency fluctuations, and
electronic commerce. In the 1980s and 1990s, risk management grew
into vital part of company planning and strategy risk management
became integrated with more and more company functions as the
field evolved. As the role of risk management has increased to
encompass large scale, organization-wide programs, the field has
become known as enterprise risk management.

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 TYPES OF RISK MANAGERS AND TYPES OF RISK:

Company managers have three general options when it comes to

choosing a risk manager:

1. Insurance agents who provide risk assessment services and insurance

advice and solutions to their clients.
2. Salaried employees who manage risk for their company, and
3. Independent consultants who provide risk-management services for a
fee.
Because risk management has become a significant part of insurance
brokering, many insurance agents work for fees instead of
commissions. To choose the best type of risk manager for their
companies, managers should consider the company’s goal, size, and
resources.
Managers also should be aware of the types of risk they face.
Common types of risk include automobile accidents, employee
injuries, fire, flood, and tornadoes, although more complicated types
such as liability and environmental degradation also exist.
Furthermore, companies face a number of risk that stem primarily
from nature of doing business. In beyond value at risk, Kevin Dowd
sums up these different types of risks companies face by placing
them in five general categories:

1. Business risk, or those associated with an organization’s particular

market or industry;

2. Market risks, or those associated with changes in market conditions,

such as fluctuations in prices, interest rates, and exchange rates;

3. Credit risks, or those associated with the potential for not receiving
payments owed by debtors;

4. Operational risks, or those associated with internal system failure

because of mechanical problems or human errors; and

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5. Legal risks, or those associated with the possibility of other parties
not meeting their contractual obligations.

In addition, environmental risks constitute a significant and growing

area of risk management, since reports indicate the number and
intensity of natural disasters are increasing. For example, the periodical
risk management reported that there were about five times as many
natural disasters in the 1990s as in the 1960s. The year 2004 was one of
the worst in history, with three major hurricanes hitting the state of
Florida and a tsunami causing death and devastation in the Pacific Rim.
Some observers blame the rising number of natural disasters on global
warming, which they believe can cause greater floods, draughts and
storms in the future.

Furthermore, any given risk can lead to a variety of losses in different

areas. For example, if a fire occurs, a company could lose its physical
property such as buildings, equipments, and materials, in this situation,
a company also could lose revenues, in that it could no longer produce
goods or provide services. Furthermore, a company could lose human
resources in such a disaster. Even if employees are not killed or injured,
a company would still suffer losses because employers must cover
benefits employees draw when they miss work.

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 ASSESSING RISKS ASSOCIATED WITH DOING
BUSINESS
One way managers can access the risks of doing business is by using the
risk calculator developed by Robert Simons, a professor at Harvard
Business School. Although the risk calculator is not a precise tool, it does
indicate areas where risks and potential losses exist, such as the rate of
expansion and the level of internal competition. Using the risk calculator,
managers can determine if their company has a safe or dangerous amount
of risk. The risk calculator measures three kinds of internal pressures: risk
stemming from growth, corporate culture, and information management.
Rapid growth, for example, could be a risk and lead to losses, because if a
company grows too quickly, it may not have enough time to train new
employees adequately. Hence, unchecked growth could lead to lost sales
and diminished quality.

Managers can access the increased risk associated with growth by

determining if sales goals are set by top management without input from
employees. If a company sets sales goals in this manner, then it has a high
level of risk in that goals may be too difficult for employees to meet. In
cases where employees feel extreme pressure in trying to achieve goals,
they may take unnecessary risks. Similarly, companies that rely heavily on
performance based pay also tend to have higher levels of risk.

To assess risks arising from corporate culture, managers should determine

what percentage of sales comes from new products or services developed
by risk taking employees. If the percentage is high, then the amount of risk
is also high, then the amount of risk is also high, because such a company
depends significantly on new products and the related risks. In addition, a
corporate culture that allows or encourage employees to work
independently to develop new products or service failures.

Finally, managers can determine business risks resulting from information

management by determining if they and their subordinates spend a lot of
time gathering information that should already be available. Another way
of assessing these risk is by managers considering whether they look at
performance data frequently and whether they notice if are missing or late.

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 THE NEED OF RISK MANAGEMENT

The need for formal business risk management is driven by the rate of
change in a business environment. In a stable environment, well
established firms can deal with their business risks through the personal
experience and skills of managers and through tried and tested routines.
Business risk management skills are a product of a firm’s successful
evolution and are built into its DNA.

In a world of change and expansion, critical business risks are much harder
to spot, communicate and manage efficiently. Risk analysis say the relative
importance of business risk is rising in the financial industry for three big
reasons.

First, as the wholesale risk and investment markets become more efficient
conduits for the sale and transfer of classic risk, banks are finding that the
margins that they are paid for retaining these risks are falling. Meanwhile,
banks are widening their range of products, improving quality of service,
branding, product mix, and the depth of the customer relationship. All
these business risks or oblige institutions to make risky assumptions that
lie outside their traditional areas of expertise.

The rise and fall of auto-leasing as a bank business line over the last few
years shows how important this can be. Auto-leasing is accredit business
in which market share can be bought by altering a key but difficult-to-
forecast variable in the business model: the residual value of used
automobiles. Most banks have learnt to be wary of buying market share by
altering assumptions in risks they understand such as credit risk or interest
rate risk. But as the button below recounts, there will always be a
temptation to alter the least understood variable in any business model.

But in some business lines- those that offer services to their customers for
a fee, or that act as distributors and brokers rather than assuming risk-
business risks have always been as important as market and credit risk. In
an individual institution, the relative weight of business risk in the risk
makeup of a bank depends upon the mix of the business lines, as well as
on the institution’s risk retention strategy. For example, a study of Bank

Page | 39
ofAmerica some years ago showed that the bank’s risk profile was
dominated by credit risk, business risk and operational risk- accounting for
some 75% of the risk capital the bank reserved against unwelcomed
events. The bank incurred significant market risks, but had a policy of
hedging this way.

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 RISK MANAGEMENT METHODS
Risk managers rely on a variety of methods to help companies avoid and
mitigate risks in an effort to position them for gains. The four primary
methods include exposure or risk avoidance, loss prevention, loss
reduction, and risk financing. A simple method of risk management is
exposure avoidance, which refers to avoiding products services, or
business activities with the potential for losses, such as manufacturing
cigarettes. Loss prevention attempts to root out the potential safety
programs designed to eradicate risks. Loss reduction seek to minimize the
effects of risks through response systems that neutralize the effects of
disaster or mishap.

The final option risk managers have is to finance risks, paying for them
either by retaining or transferring their costs. Companies work with risk
managers insofar as possible to avoid risk retention. However, if no other
method is available to manage particular risk, a company must be prepared
to cover the losses-that is to retain the losses. The deductible of an
insurance policy is an example of a retained losses. Companies also may
retain losses by creating special funds to cover any losses.

Risk transferring takes place when a company shares its risk with another
party such as an insurance provider, by getting insurance policies that
cover various kinds of risks that can be insured. In fact6, insurance
constitutes the leading methods of risk management. Insurance policies
usually cover property risks, such as fire and natural disasters, liability
risks such as employer’s liability and worker’s compensation, and
transportation risk such as covering air, land and sea travel as well as
transported goods and transportation liability.

During the implementation phase, company managers work with risks

managers to determine the company goals and the best methods for risk
management. Generally, companies implement a combination of methods
to control and prevent risks effectively, since these methods are not
mutually exclusive, but complementary. After risk management methods
have been implemented, risk managers must examine the risk management
programs to ensure that it continues to be adequate and effective.

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 EMERGING AREAS OF RISK MANAGEMENT

In the 1990s, new areas of risk management began to emerge that provide
managers with more options to protect their companies against new kinds
of exposures. According to the Risk and Insurance Management Society,
the main trade organization for the risk management profession, among the
emerging areas for risk management were operations management,
environmental risks, and ethics.
As forecast by RIMS, risk managers of corporations started focusing more
on verifying their companies’ compliances with federal environmental
regulations in the 1990s. According to the risk management, risk managers
began to assess environmental risk such as those arising from pollution,
waste management, and environmental liability to help make their
companies more profitable and competitive. Furthermore, tighter
environmental regulations also goaded businesses to have risk managers
check their compliance with environmental policies to prevent possible
penalties for non-compliances.
Risk managers can also help alleviate losses resulting from mergers.
Stemming from the wave of mergers in 1990s, risk managers became a
more integral part of company mergers and acquisition teams. On the
buying side, risk managers examine a selling company’s potential risks.
Finally, risk managers have been called upon to help businesses manage
the risk associated with increased reliance on the internet. The importance
of online business activities in maintaining relationships with customers
and suppliers, communicating with employees, and advertising products
and services has offered companies many advantages, but also exposed
them to new security risks and liability issues. Business managers need to
be aware of various risks involved in electronic communication and
commerce and include internet security among their risk management
activities.

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 TRANSFERING BUSINESS RISK- THE CUTTING
EDGE OF RISK MANAGEMENT

After business risks are identified and assessed, they can then be thought
of in terms of core business risks that it makessense for the business to
retain and non-core risks that the business is likely to want to transfer. This
is as true for manufacturing corporations as it is for financial institutions.
The process of isolating and then transferring the business risk has created
most of the classic risk management markets the financial institutions
depend upon today- and it’s still underway. The endlessly shifting borders
of risk transfer markets can be tracked by keeping an eye on innovations in
the derivative markets, especially insurance markets and market known as
“alternative risk transfer”.
As an example, let’s take a look at first at a particular deal that transferred
a risky residual liability embedded within a company’s marketing
strategy.Rolls-Royce is one of the world’s most successful aerospace
manufacturers. As a part of its business strategy, the firm has for some
years offered guarantees to certain customers covering a portion of the
future value of aircraft powered by its engines, which in turn has helped
customers arrange cheaper finance for purchasing Rolls-Royce powered
products.
As time went on, the risks associated with these guarantees accumulated
into a considerable financial exposure. Rolls-Royce realized that if it
wanted to continue the practice, it would have to manage risk. In one of
the larger transactions of its kind, in February 2001, Rolls-Royce entered
into an insurance agreement with XL capital Ltd that limited the aerospace
company’s exposure to Boeing and Airbus aircraft values. It was an
innovative deal, but not unique. The technical risk advisors, Boston based
RISC, said at the time they’d also acted as lead technical advisor to BAE
system.

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These deals are a segment of a much wider and larger risk management
market for managing the residual values of assets that businesses either
own or are financially exposed to by some part of their strategy. All of
sudden, risks that had for decades seemed an unavoidable part of doing
business have become ‘manageable’- at a price.
But what of business risks that can’t be related to tangible assets or
liabilities? Let’s take two notorious examples: weather and politics.
The weather risk transfer market began life as a segment of the energy risk
management market. Energy companies had a problem in that their
financial exposures depended not only on the price of energy supplies –
which could be risk managed using derivatives contracts based on energy
prices – but also on capacity fluctuations in supply and demand caused by
changes in the weather. One of the answers the industry found to this
dilemma was the development of the contracts that paid out money
depending on changes in the temperature and precipitation, as the button
below describes
So far, the take-up of “weather derivatives” outside the energy industry has
been limited .but early in 2001 the first weather risk management contract
for a restaurant was arranged with risk management provider Enron by
speedwell weather derivatives limited, on behalf of the rock garden. This
transaction was intended to protect the restaurant business from loss of
revenues due to a colder than normal summer. This was a small
transaction, and there’s no certainly that a more general market in financial
umbrellas will mature. But it’s a vivid example of how a risk that seems to
be an inextricable part of a business in one decade can become transferable
by the next.
Political risk is something that affects many businesses, particularly firms
that invest or do business in the emerging markets. It’srisk that is, to some
extent, reflected in the currency values and in the and in the interest rate
spreads connected with government and corporate debt. But it’s always
been complicated task for many companies to separate out the political out

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the political risk element of their risk portfolio and to make sure that it
does not rise too high or become too concentrated.
As the button below discusses, a recent survey showed that few risk
managers in major companies thought they had achieved any systematic
political risk assessment, even though 80 per cent said they considered it a
very important goal. It’s a problem that is only going to get more urgent as
the process that is only going to get more urgent as the process of
globalization proceeds.
Where might all these developments lead? A survey in the year 2000 asked
30 organizations involved in novel insurance techniques what kind of
innovative business risk transfer deals they been approached about. Most
respondents cited approaches that risk managed novel sorts of liabilities
(30%), followed by techniques that helped to smooth out earnings results,
and that injected capital into a firm when a specific risk event occurred –
contingent capital.
But firms also said they had been approached about core entrepreneurial
risks such as the risk from product launches, loss of market share, price
fluctuations in final product markets, and the risks of research and
development.
These risks sound like a roll call for risk-taking entrepreneurial capitalism.
But whether retaining them makes sense really depends on how a business
defines its core strengths and strategic direction.
There is one brake on the market, however. Experts agree that it makes
little sense for a firm to try to offload the volatility of its complete
portfolio for business risk. That after all, is risk that a shareholder assumes.
If there are advantages to dampening out revenue volatilities that arise
from the whole business risk spectrum, experts say it’s likely that it will
make more sense for a business to employ “balance-sheet smoothing”
transactions. Under this approach, a firm retains its exposures, but uses
some funding mechanism to spread the losses out over an extended period

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Page | 46
Page | 47
 CHAPTER 2: RESEARCH METHODOLOGY

RESEARCH DESIGN:
A Research Design is purely and simply the framework of the plan for a study
that guides the collection and analysis of data. The study is intended to find the
investors preference towards various investments avenues. The study design is
descriptive in nature.

DESCRIPTIVE DESIGN:
Descriptive study is a fact-finding investigation with adequate interpretation. It
is the simplest type of research and is more specific. Mainly designed to gather
descriptive information and provides information for formulating more
sophisticated studies.

METHODS OF DATA COLLECTION:

 Primary Data:- Questionnaire

 Secondary Data:- Newspapers, Websites

 Sample Size:- 50

 Research Area:- Thane District

IMPORTANCE OF THE STUDY:

As inflation rates are fluctuating now and then it is very important for an investor to
invest in profitable return market. This study focuses on the important aspects on
what king of investment an investor should invest in.
OBJECTIVE:

1.To study the various schemes of the insurance.

2.To study the investments made by customers in the form of different policies
& its returns

3.To understand the discipline and code of conduct of the company

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4.To have in-depth knowledge of insurance product creation

5.To learn the real life ethics and morals of insurance

HYPOTHESIS:

A supposition or proposed explanation made on the basis of limited evidence as a

starting point for further investigation.

Here, we assume that “INVESTORS PREFER LESS RISKY INVESTMENTS”

This study tries to find whether the assumption is true or not.

QUESTIONNAIRE USED FOR SURVEY:-

Respondent no.:

Date & Time:

Q1. Are you insured?

a. Yes b. No

Q2. How many insurance policy you have?

a. Up to 3 b. 4 to 6

c. More than 6

Q3. From which private insurance company you are

insured?

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 a. ICICI Prudential b. Birla Sunlife Insurance

c. HDFC Standard d. Any other

Q4. Who influence you get insured?

a. Insurance Agent b. Electronic media

c. Print media d. Friends &relative

Q5. For what you have insured yourself?

a. For saving b. For covering risk of life

c. For Tax benefit d. For security to family

e. All of the above f. None of above

Q6.Which of the following policies you have?

a. Endowment policy b. Single premium policy

c. Children policy d. Pension plan policy

e. Money back policy f. Any other

Q7. What is the term of the policy?

a. up to 5 yrs b. 6 to 10 yrs

c. 11 to 15 yrs d. 16 to 20 yrs

e. Above 20 yrs

Q8. How would you like to pay premium?

a. Monthly b. Quarterly

c. Half yearly c. Yearly

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Q9. Has your policy lapsed any time due to non-payment
of insurance premium?

a. Yes b. No

Q10. Are you aware about accidental insurance claims?

a. Yes b. No

Q11. Are you aware about the insurance bonus of the

policies?

a. Yes b. No

Q12. Have you ever surrendered your insurance policies?

a. Yes b. No

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CHAPTER 3
REVIEW OF LITERATURE

Before proceding further for fulfilling the various

Objective set out for this study. It is pertinent a review the available
literature on the related of aspects of the present study however, in
The chapter an attempt is being made to undertake the review of
available literature published. While reviewing care has been take top tap
all possible sources such as books, journals, magazines, Newspaper item
& websites .
1 According to the life insurance council secretary general S.B.
Mathur , the Indian life insurance Industry is expected to grow by about
155% in the current financial year to touch a total premium income of Rs.
2,55,000 crores in 2009-10 . He is optimistic about the future of Insurance
business in Indian and expected the industry to grow approximately at
15%.
2 Mr. G.V . Nageshwara rao , CEO & Managing Director , IDBI Fortis
life insurance in Indian is expected to grow at about 205 in the next few
year. Lower than 25% annual growth of the last five year, he further
added, with insurance penetration in the last five years. he further added
With insurance penetration in the country at about 4% of GDP(20070),
which is close to the world average of 4.4%, industry growth is now
expected toslow down.
3 The author M C Garg and Anju Verma are of the opinion that the
insurance market is likely to see change in the spheres of marketing mix.
They feel that the customer driven market would result in many
flexibilities and innovation in product , pricing , distribution channels and
Communication mechanism . The authors have attempted to study the
nature, process and pattern of marketing mix in life insurance companies
in India. As per their findings, the marketing departments of life
insurances companies sometime attempt at analyzing their competitors
mix.

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4 According to Mr. Vinay Kumar Sinha , LIC aims to sell about 44 lakhs

Policies to the financially weaker section of the society during the

current fiscal against 15.4 lakhs sold in the last year. With the
establishment of a technology platform and tie-up with NGO’ s, micro
finance institution and the self help groups, the penetration of such
product are growing. Micro insurances products of LIC are customized
offerings to cater to the distinct needs of the most vulnerable low income

Section of Indian population .

5 The IRDA has expressed concern over the rise in “orphan’’ policies.

Regulation has , I its 2007-08 annual report said “ the fact that as many

As 86 lakhs non- linked policies have lapsed during 2006-07 holds mirror
of policies “orphan’’

6.Mr. Mohan Kumar , MD , Link-Insurance Broker Company Ltd , strong

feels that the high rate if attrition among life insurance agents is resulting
in large number of policies remaining under services.

7. As said by swati gupta , Insurance sector reforms are a part of

government priorities . A package of reforms is very much much in the
offing there is an immediate need of a regulatory framework to open up
the insurance industry.

8. K. Chadha and Deepa Kappor made an attempt to know as to how

consumer associate selected Life insurance companies with the different
attributes . The result showed that the selected Life insurance companies
do not differ significantly with regards to the attributes. However the
companies differ significantly on the basis of advertisement and
promotional campaigns.

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9.Nrijhar majumdar in his article “ Marketing of Life Insurances “ has
given the progress of marketing of insurances in Indian and has suggested
some solution . In the beginning he has given the brief history of
marketing befor 1956 and the challenges .LIC faced and effort that LIC
took in the initial stage . he has given suggestion for present marketing
policy and thinks that LIC should make use of opportunities coming out of
present situation .

10. Anabil Bhattacharya in his ‘ Indian Banks entry into Insurance sector”
has discussed the entry of Indian Banks into the Insurances sector and
criteria to be followed to make it beneficial to the nation. After bringing
together banks and insurances he make it banc assurance .Bank being
penetrated into rural India will definitely support insurance .

11. A.K. Jain (2004) revealed the waves of liberalization have done
wonder to proper the insurance occupation to the status of a carrer with
bring future . the average mindset, asia pacific journal of finance and
banking research particularly of younger generation in Indian is very
amenable to these changes in insurances as an avenue where exhilarating
opportunities are opened up in changed environment .

12.Suryal pal (1974) Investment pattern of life insurance corporation of

Indian that prior to the passing of the Indian an insurances act 1938 there
was no restriction on investment of the life funds but as is clear from
table 21 their assets in the form of government .

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Page | 55
Page | 56
CHAPTER 4: DATA ANALYSIS AND INTERPRETATION

a) Age of respondents

Age

50
40
30
Age
20
10
Age
0
21-30 31-40 41-50 50 +

Interpretation:-
The sample size is 100 in the survey.
The age criteria start from 22 because many people start earning at this age.
The above diagram shows that from age 21-30 there are 26
respondents which consists a majority of students.
From 31-40 there are 48% of people, from age 41-50 there are 15%
of people.
The age above 50, respondents are majorly in category of retirement.

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 b) Number of males and females in the survey?

Gender No. of respondent

Male 55
Female 45

no. of respondent

45
males
55 females

Interpretation:-
There are 100 responses in this survey with divides the number of males and
females.
The result shows that there are 55 males and 45 females in the survey.

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 c) Occupation
Occupation No. of respondents
Student 26
Working 43
Entrepreneur 14
Profession 11
Retired 06

occupation

6
11 26
Student
14
Working
Entrepreneur
43
Profession
Retired

Interpretation:-
Sample size of the survey is 100.
In which 43% of people are working, 14% of 100 are businessmen, 11% have
their own profession, 26% are student and only 6% are retired.
Here we see that majority of respondents are working.
6% of retired public have their past experience of investments.

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d) Knowledge about these investments avenues?
Investments avenues No. of respondents
Insurance 100
Stock market 100
Mutual funds 75
Derivatives market 30
Fixed deposits 100
Gold 100

respondents

100
80
60
40
20
0
respondents
respondents

Interpretation:-
This is a survey of a particular region with a people in count of 100.
From the above diagram it is seen that the respondents have knowledge
about the investments like insurance, stock market, mutual funds, gold,
fixed deposits.
Derivative market is a new and risky concept, so people avoid investing in
this market. Thus these instrument in not much popular in the market.

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e) How often respondents invest in these financial investments?
Conditions No. of respondents
As per market conditions 35
Regularly 59
Never 06

Sales
06

35 as per market
regularly
59 never

Interpretation:-
This question is to analysis about how the respondents invest in the market.
There are 100 respondents.
It is seen that 59% investors invest regularly for their future planning.
35% are those who are linked with the market and invest according to the
market.
6% are those who never invest, who majorly are college going students.

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f) Income of respondents

Income Respondents
1 lacs to 3 lacs 43
3 lacs to 5 lacs 28
5 lacs to 7 lacs 21
7 lacs& above 08

Income

7 lacs <

5 lacs - 7 lacs

income
3 lacs - 5 lacs

1 lacs - 3 lacs

0 10 20 30 40 50

Interpretation:-
This shows the income of 100 respondents
43% of people are of low income group from 1lac to 3 lacs.
21% are from income between 3 lacs to 5 lacs.
34% of people have income above 5 lacs.

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g) % of income in investment
% of income in investment Response
05% to 15% 69
16% to 30% 17
30% to 50% 12
50% & more 02
% of income in investments

05% - 15%
15% - 30%
30% - 50%
50% & more

Interpretation:-
The responses in the above table show that how much people invest in
investment avenues.
About 69 respondents invest their 5% to 15% of income in such investments.
18 respondents invest their 15% - 30% of income.
15 respondents invest their more than 30% income in such investments.

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h) Important factor for making investments
Important factor for investments Responses
Maximum return 23
Safety 45
Regular income 12
Tax benefit 20
important factor for investments
50
45
40
35
30 max. return
25 safety
20 regular income

15 tax benefit

10
5
0
max. return safety regular income tax benefit

Interpretation:-
The responses in the above table shows that what is the most important factor
considered by the investor while investment.
By these survey it is seen that major respondents consider safety as an
important factor
23 responses are for maximum return and 20 responses for tax benefit.
Regular income is considered as the last important factor by the respondents.

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i) Most preferred instrument by investors.
Preferred instruments by investors Responses
Mutual funds 10
Stock market 08
Insurance 24
Derivatives market 03
Gold 15
Fixed deposits 40
Preferred Insruments

40
35
30
25
20
Preferred
15 Insruments
10
5
0
mutual stock insurance derivatives gold fixed
funds market market deposits

Interpretation:-
This table shows the 100 results of the taste of investors while investing.
In the graph we see that 40% of people select fixed deposits, though the returns
are low but the investor has a guarantee of risk free return.
Second is insurance 24 people have given their preference to insurance to
secure their lives.
Others preference i.e. 28 people select the instruments like gold, mutual funds,
derivatives market & stock market respectively.

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j) Term of investments preferred by investors
Term of investments Responses
3 months 13
3 months to 1 year 34
1 year and above 53
Responses
60

50

40

30
Responses

20

10

0
3 months 3 months - 1 year 1 year & above

Interpretation:-
The 100 responses in above table give information about how long the investor
wishes his money to be locked.
53% of people are of view that to get high & safe returns the investments must
be for more than one year.
34% of people suggest a term between 3 months to one year.
13% people are of opinion that the money should be rolling continuously in
market. They are mainly concerned with stock market and derivatives market.

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k) Expected returns from an investment
Expected returns from an investment Responses
Less than 10% 32
10% - 15% 55
15% & above 13
Responses

less than 10%

10% - 15%
15% & above

Interpretation:-
This data shows the expected return from investments by the investors.
55% of responses are for return from 10% to 15% which is nominal.
32% of responses are for return which is less than 10%, these are low risk taker
investors.
13% of people are expecting a return which is above 15%, these are risk taker
investors.

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l) Satisfaction of investors
Satisfaction of investors Responses
Highly satisfied 50
Not satisfied 05
Less satisfied 17
Need to change 28
satisfaction of investors

28
highly satisfied
not satisfied
50
less satisfied
need to change
17
5

Interpretation:-
This data of 100 responses indicates the satisfaction of the respondent’s
investments.
We see that 50% of respondents are highly satisfied by their decision of
investments.
5% of people are not satisfied by their investments due to bad past experience
in investing.
17% of people are less satisfied.
28% of respondents are still not confident about their investments and the need
to change

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 CHAPTER 5: CONCLUSION & RECOMMENDATIONS
CONCLUSION:

In some ways, business and strategy risks are the most difficult of risk
types to define. What begins as a fuzzy or unquestioned business
decision or assumption often evolves into a more sharply focused legal,
credit or price risk shortly before it damages or destroys the company.
The business decision or assumption is sometimes so fundamental to the
business that it drives all other risk management functions in the firm.
That’s why, at the time business or strategic risk are assumed, most are
not easily dealt with in the terms of the classic areas of risk
management. They are intricately wrapped up in the business idea itself
to be separated out. They are also often too integral to the aims and
ambition to senior managers.
This makes the risk management of potential lethal business and
strategy risks a very special problem for risk managers. And it suggests
that someway must be found of trying business and strategic risk
management firmly into enterprise wide approaches to risk management
and corporate governance.
RECOMMENDATIONS:
 It is evident that the investors lack the confidence when it comes to risky
investments, so products with safety or hedge features must be developed to
minimize the loss of the investor.
 Wherever applicable, insurance must be taken for assets and the importance of
insurance must be taught to the investor. For example, for real estate, fire
insurance can be taken.
 The investors not having awareness about some investment options must be
educated about them.
 Since risk cannot be avoided for some investments like Derivatives Futures
contracts, the investor must be informed about the risks to avoid any
misunderstanding between advisor and the client.

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 BIBLIOGRAPHY:

1) https://en.wikipedia.org
2) http://insurance.birlasunlife.com
3) www.scribd.com
4) https://en.wikipedia.org/wiki/Birla_Sun_Life_Insurance_Company_Li
mited
5) www.investopedia.com
6) http://www.investonlinetrading.com
7) Modern banking and insurance- principles and techniques
8) TYBMS SEM V Textbooks- IAPM, CDM, & Wealth Management

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