Project Report

(Submitted for the Degree of B. Com Honours in Accounting& Finance

under the University of Calcutta)

Title of the Project

A CASE STUDY ON LIFE INSURANCE

CORPORATION OF INDIA

Submitted by
Name of the Candidate: AYAN KUNDU.
Registration No:
Name of the College: MAHARAJA SRISCHANDRA
COLLEGE
College Roll No: 112.

Supervised by
Name of the Supervisor: PROF. ARUP KUMAR
BHATTACHARYA.
Name of the College: MAHARAJA SRISCHANDRA
COLLEGE.

Month & Year of Submission

FEBRUARY 2017

Annexure- I
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 Supervisor's Certificate

This is to certify that Mr SUBHANKAR DUTTA, a studentof B. Com Honours in

Accounting & Finance of MAHARAJA SRISCHANDRA
COLLEGEunder the University of Calcutta has workedunder my supervision and
guidance for his Project Work and prepared a Project Report with the title: INSURANCE
INDUSTRY IN INDIA.
My contribution however, was mainly in the form of general guidance and discussion.

Signature:

Place: KOLKATA Name:SURAJIT CHANDRA

Date: Designation:LECTURER, DEPARTMENT
OF COMMERCE
Name of the College: MAHARAJA
SRISCHANDRA COLLEGE

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Annexure- II

Student's Declaration

I hereby declare that the Project Work with the title: INSURANCE INDUSTRY IN INDIA
submitted by me for the partial fulfilment of the degree of B.Com. Honours in Accounting
&Finance under the University ofCalcutta is my original work and has not been submitted earlier
to any other University for the fulfilment of the requirement for any course of study.
I also declare that no chapter of this manuscript in whole or in part has been incorporated in this
report from any earlier work done by others or by me. However, extracts of any literature
whichhas been used for this report has been duly acknowledged providing details of such
literature inthe references.

Signature:

Place: KOLKATA Name: SUBHANKAR DUTTA

Date: Address: 16/1/1/H/44, MURARI PUKUR ROAD
KOL- 67
Registration No: 212-1121-0283-13

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 ACKNOWLEDGMENT
I would like to express my humble gratitude to the almighty god who has always stood next to
me in all my difficult times.

I convey my humble thank to Institute of MAHARAJA SRISCHANDRA COLLEGE for having

admitted me in the course.

I hereby place my sincere and profound gratitude to my principal, our commerce department
teachers and along with our other teachers for their valuable guidance, suggestion, and moral
supports to do my project work.

I also extended my thankfulness to my beloved parent and friends for their continuous
encouragement at every moment.

SIGNATURE:

Date:

TABLE OF CONTENTS
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SL.NO CHAPTER NAME PAGE NO

CHAPTER 1: INTRODUCTION
1.1: - Introduction to the topic
1 1.2: - Background 1
1.3: - Literature Review 2
1.4: - Objectives 4
1.5: - Methodology Used 5
1.6: - Limit of the Study 6
7

CHAPTER 2: CONCEPTUAL FRAMEWORK

2.1: - Concept of LIC 8
2
2.2: - Overview 8
2.3: - Objectives of LIC 9
2.4: - Mission & Vision 11
2.5: - Distribution Network 12

Chapter 3: ANALYSIS AND FINDINGS

3.1: - Balance Sheet of LIC
15
3 3.2: - Methodology 16
3.3: - Analysis 17
3.4: - Findings 29

4 CHAPTER 4: CONCLUSION AND RECOMMENDATION

4.1: - Main Findings 30
4.2: - Suggestion’s & Recommendation 30
4.3: - Conclusion 31

5 CHAPTER 5: BIBLIOGRAPHY 32

CHAPTER 1: INTRODUCTION
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 1.1 INTRODUCTION TO THE TOPIC

Insurance may be described as a social device to reduce or eliminate risk of loss to life and
property. Under the plan of insurance, a large number of people associate themselves by sharing
risks attached to individuals. The risks which can be insured against include fire, the perils of
sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at
a premium commensurate with the risk involved. Thus collective bearing of risk is insurance.

DEFINITION:

General definition:
In the words of John Magee, “Insurance is a plan by which large number of people associate
themselves and transfer to the shoulders of all, risks that attach to individuals .”

Fundamental definition:
In the words of D.S. Hansell, “Insurance may be defined as a social device providing financial
compensation for the effects of misfortune, the payment being made from the accumulated
contributions of all parties participating in the scheme.”

1.2BACKGROUND

Life Insurance Corporation of India (LIC) was formed in September, 1956, by an Act of
Parliament, viz., Life Insurance Corporation Act, 1956, with capital contribution from the
Government of India. The then Finance Minister, Shri C.D.Deshmukh, while piloting the bill,
outlined the objectives of LIC thus to conduct the business with the utmost economy, and a spirit
of trusteeship; to charge premium no higher than warranted by strict actuarial considerations; to
invest the funds for obtaining maximum yield for the' policy holders consistent with safety of the
capital; to render prompt and efficient service to policy holders, thereby making insurance
widely popular. Since nationalization, LIC has built up a vast network of 2,048 branches,
100divisions and 7 zone’s offices spread over the country. The Life Insurance Corporation of
India also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC
is associated with joint ventures abroad in the field of insurance, namely, Ken-India, Assurance
Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur and
Life Insurance Corporation (International) E.C.Bahrain. The Corporation has registered a joint
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venture company in 26th December,2000 in Kathmandu, Nepal by the name of Life Insurance
Corporation (Nepal) Limited in collaboration with Vishal Group Limited, a local industrial
Group. An off-shore company L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001
to tap the African insurance market .

1.2.1 Company profile

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and
the Life Insurance Corporation of India was created on 1st September, 1956, with the objective
of spreading life insurance much more widely and in particular to the rural areas with a view to
reach all insurable persons in the country, providing them adequate financial cover at a
reasonable cost.

It has over 50 years of experience in operation, and is recognized as one of the most trusted and
respected corporation in India.
LIC is one of the most well-known and oldest insurance companies in India.
Insurance sector in INDIA is booming up but not to level comparative with the developed
economies such as Japan, Singapore etc., also with the opening of the insurance sector to the
private players have provided stiff competition resulting into quality products therefore there is a
need to restructure the Indian Government owned “Life insurance Corporation of India” so as to
maximize revenue and in turn profits. IRDA regulations and norms for the allocation of funds
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need to have a comprehensive look. In the phase of declining interest rates and rising inflation
the funds need to be applied in productive areas so as to generate high returns. Also in terms of
clients servicing areas such as premium payments, after sales service, policy dispatch, redressal
of grievances has to be amended. Inthe current scenario, LIC has to provide flexible products
suited to the customer’s requirements. Also a proper and systematic risk management strategy
needs to be adopted. After the increase in terrorism and destructive events around the global
world such as September 11 attack on World Trade Centre, US – Taliban war, US – Iraq war etc.
An alternative to reinsurance such as asset backed securities is emerging out in the developed
economies. Catastrophebonds are one of the alternatives for reinsurance. Finally, some policies
such as pure term and pension.

1.2.2 Product profile

Money Back Policy

Money Back with Profit - Plan no.75

New Money Back - Plan no.93

Children's Policy

KomalJeevan - Plan No. 159

Children Deferred - Plan no.41

Endowment Policy

Endowment with Profits - Plan no.14

Limited Payment Endowment with Profits - Plan no.48

Group Insurance Policy

JanashreeBimaYojana
Group Insurance Scheme in lieu of EDLI

Pension Plans or Annuities

New JeevanDhara - Plan no.148

New JeevanSuraksha- Plan no. 147

 
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1.3 Literature Review
The topic basically revolves around the life insurance sector which has been recently opened for
the private players. LIC has for a long period of time has enjoyed a dominant market of life
insurance and the fact cannot be denied that LIC has a pre accomplished market leadership which
makes it difficult for the new players to compete.

While the new players struggle to increase their market in India, LIC continue to leverage
advantage of its old establishment and government support for maintaining its growth. Life
Insurance is the fastest growing sector in India since 2000 as Government allowed Private
players and FDI up to 26%. Life Insurance in India was nationalised by incorporating Life
Insurance Corporation (LIC) in 1956. All private life insurancecompanies at that time were taken
over by LIC.
In 1993 the Government of Republic of India appointed RN Malhotra Committee to lay down a
road map for privatisation of the life insurance sector.
While the committee submitted its report in 1994, it took another six years before the enabling
legislation was passed in the year 2000, legislation amending the Insurance Act of
1938 and legislating the Insurance Regulatory and Development Authority Act of 2000.

The same year that the newly appointed insurance regulator -Insurance Regulatory and
Development Authority IRDA started issuing licenses to private life insurers.

1.4 Objective of the study

 The main objective of the study is to show the performance of LIC in the Life Insurance
Industry.

 To study consumer’s awareness towards insurance products

 To identify the customer’s perception about the company and its products.

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1.5 METHODOLGY

1.5.1 MEANING

Methodology is the plan, structure to answer whom, when, where and how the subject is under
investigation.  Here plan is an outline of the research scheme & which the researcher has to
work.  The structure of the research is a more specific outline and the strategy out, specifying the
methods to be used in the connection & analysis of the data.

1.5.2 AREA OF STUDY

Insurance is an Rs.400 billion business in India, and together with banking services adds about
7% to India’s GDP. Gross premium collection is about 2% of GDP and has been growing by 15-
20% per annum. India also has the highest number of life insurance policies in force in the world,
and total investible funds with the LIC are almost 8% of GDP. Yet more than three-fourths of
India’s insurable population has no life insurance or pension cover. Health insurance of any kind
is negligible and other forms of non-life insurance are much below international standards.
To tap the vast insurance potential and to mobilize long-term savings we need reforms which
include revitalizing and restructuring of the public sector companies, and opening up the sector
to private players. A statutory body needs to be made to regulate the market and promote a
healthy market structure. Insurance Regulatory Authority (IRA) is one such body, which checks
on these tendencies.

1.5.3 DATA COLLECTION

The main source of information for this study is based on the data collection. Data collected are
both primary and secondary in nature.

Primary Data

Primary data have been directly collected from the clients of LIC as well from the clients of other
insurance companies by survey method through undisguised structured questionnaire.

Questions like open ended, close ended, multiple choice, dichotomous and ranking type have
been used for the purpose of data collection.

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Secondary Data

Secondary data have been collected from official website of LIC and also from other official
websites related to general insurance industry.

1.6 LIMITS OF THE STUDY

Every project has its own limitations, so as ours. But we have to work irrespective of these
limitations and find our way, so that we can achieve the required aim.

Some of the limitations are:

The study of this project is limited to people who have been questioned and understand the
project well.

As our project is based on the data collected by people, we face the limitations of extracting that
particular collection data because our access is limited for the sake of confidential information.

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CHAPTER 2 CONCEPTUAL FRAMEWORK

2.1 CONCEPT OF LIFE INSURANCE CORPORATION OF INDIA

This leading Insurance Company of India was established in the year 1956 by the alliance of 16
non-Indian companies, 154 Indian Insurance Companies and 75 provident. It has 100 divisional
offices, 2048 computerized branches, 7 zonal offices and the company's corporate office. It has
introduced new strategies for the facilitation of the customers like the IVRS, ECS, ATM
Premium payment facility and the company's Info centres in Mumbai, Delhi, Chennai, Kolkata
and many others cities.

Branches
8 Zonal Offices and 101 Divisional Offices.

2.2 OVERVIEW
The largest life insurance company in India, Life Insurance Corporation is fully owned by the
government. It provides individual life insurance, group Insurance and pension plans. Its
subsidiaries include Life Insurance Corporation of India International, LIC Nepal, LIC Lanka,
LIC Housing Finance and LICHFL Care Homes. It has over 12 million policy holders and over 9
lakh agents. It has underwritten more than 120 million policies. LIC saw computers in 1964.
Today the company is on the Internet and is utilizing Information Technology in servicing its
clients. It has bagged various award including Loyalty Awards 2008 in Insurance Sector, NDTV
Profit Business Leadership Award – 2007, CNBC Awaaz Consumer Awards 2007 and Outlook
Money NDTV Profit Awards 2007. LIC provides a rewarding career as sales agents. It offers
world class training, freedom to work and unmatched financial strength Headquartered in
Bombay, financial and commercial capital of India, the Life Insurance Corporation of India
currently has 8 zonal Offices and 113 divisional offices located in different parts of India, around
3500 servicing offices including 2048 branches, 54 Customer Zones, 25 Metro Area Service
Hubs and a number of Satellite Offices located in different cities and towns of India and has a
network of13,37,064 individual agents, 242 Corporate Agents (as on 31.3.2011) for soliciting life
insurance business from the private sector.

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2.3 OBJECTIVES OF LIC
 Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the
country and providing them adequate financial cover against death at a reasonable cost.

 Maximize mobilization of people's savings by making insurance-linked savings

adequately attractive.

 Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as a
whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.

 Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.

 Act as trustees of the insured public in their individual and collective capacities.

 Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.

 Involve all people working in the Corporation to the best of their capability in furthering
the interests of the insured public by providing efficient service with courtesy.

SWOT ANALYSIS

STRENGTHS:

 Dedicated Employees.
 Well Efficient Management
 Strong and popular brand name.
 Adaptability to changes.

WEAKNESS:

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  Lack of good
services.

 Lack of
awareness
about insurance
among
people.

 Less coverage in
Rural Areas.

 Lack of
credibility
among the people because Reliance life insurance being a private player.

OPPORTUNITIES:

 Fast growing economy.

 Increasing per –capita income in India.

 Saving behaviour.

 High growth of Traditional industry.

THREATS:

 Arrival of new entrants in the insurance industry.

 Cut throat competition within the industry

2.4 MISSION AND VISION

Mission

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"Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering resources
for economic development."

Vision

"A trans-nationally competitive financial conglomerate of significance to societies and Pride of

India."

LIC enjoys this dominance because it is obvious that investors want a guarantee of their money
irrespective of cycles of market. They know that it would be a safe play to invest in LIC as the
government guarantee to bail out in case of any mishap.

This denies the life insurance market from a level playing field to the competitors. The private
players have been in the market for 10 years now but could not bring a big change in market
share of life insurance. People’s trust is build up with LIC due to such sovereign guarantee. I do
not deny the fact that LIC has not used this benefit of sovereign guarantee but this definitely
helps them grow their market size because of the faith people lay in them being a state owned
enterprise.

Not only the employees of LIC, but every member of the public should therefore appeal to the
Government to understand the game plan of these forces, lobbying for the withdrawal of the
Government guarantee to this national institution. Sovereign guarantee reduces the sector from
healthy competition and gives an undue advantage to LIC to attain the faith of people due to
which other private players suffer a loss. Through the LIC Act of 1956, government provides
sovereign guarantee to LIC which comforts approximately 16 crore policy holders and its
withdrawal would require an amendment to the LIC Act,1956.

2.5 DISTRIBUTION NETWORK

The distribution network is most important in insurance industry. Insurance is not a high cost
industry like telecom sector. Therefore, it is building its market on goodwill and access on
distribution network. We cannot deny that insurance is not bought, it is sold. The industry covers
approx. 3% of the population of our country. The market has a great scope to grow. This can be
better done by more innovative channels like a super market, a bank, a post office, an ATM,
departmental store etc. these could be used to increase channels of insurance. But such growth in
channels shall increase with time. Till than agents seem to be the most important distribution
channel in this industry.

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 Agents connect with people and influence them to buy any insurance policy. For the same such
agents charge commission on the policies they get for the company. There is a fixed percentage
of commission for which these agents work.

It is important to mention that the IRDA regulation which says that one agent can enrol with only
one insurance company. This leads to narrowing down of exposure to customers to various
products. When I go to a shop, I get all varieties to choose from.

Similarly, agents are like a shop where consumer looks for options of insurance available. Such a
policy leads to leveraging of distributionnetwork. This plays as an advantage forLIC.

In lifeinsurance, the LIC has two important elements in its favour which are as follows: -

The LIC has vast distribution network in the rural and semi-rural urban areas.

This would be hard to duplicate. One potential way to duplicate it could be increasing other
distribution network like ban assurance.

Also, since LIC started with 100% of market share, it will lose market share simply because of
expansion of market itself and less because of loss of existing customers.

LIC has attempted to enlarge the distribution channels to build a real marketing environment by
involving cooperatives and panchayats in its market areas.

The IRDA regulations on agent’s recruitment, qualification and training make the task easier for
LIC (Locking in its agents).

Distribution channel is an important stimulant of competition in market. In India, An agent can

work for only one insurer. LIC has more than 10 lakh agents which are supposedly to grow more
in future which in comparison to private players is mammoth. The new players have
comparatively few agents. The policy of IRDA hinders distribution network. It leads to an
exclusionary behaviour of distribution network. Such behaviour gives LIC a dominant position in
the market. I would like to explain the market factors influencing decision to purchase insurance
through some statistics.

There are several factors which influence customers to choose any life insurance like agents,
advertisement, co-workers, friends and family. It is important to mention here that agents cover
55% market factor influencing purchase of insurance. Also it is important that LIC spends
Rs.116 crores in 2008 where as major players like Bajaj Allianz and ICICI Prudential are Rs.17.7
cr and 15.4 cr respectively. With more market share, it is obvious that LIC has better capacity to
invest more on advertisement which leads them to dominate the market much more than other
players.
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There is an exclusively distribution network which is helping to build LICs core strength which
needs to be made accessible to give a level playing field to all market players.

Section 4(2) (c) of the act specifically mentions that an enterprise shall be deemed to abuse its
dominant position if it indulges in practice resulting in denial of market access in any manner.
Here the market access is denied through distribution network which is more exclusionary in
nature.

Also it is very important to mention that such exclusionary behaviour makes agents charge a very
heavy commission which creates a pressure on customers, miss-sold and leads to poor service.
Customers are not well informed due to such a practice. There is a robust agent network of LIC
which needs to break by IRDA. IRDA needs to regulate such provision and allow agents to sell
all insurance because it is important that customer’s get a variety from such source. If agents are
allowed to sell more than one insurance, customers will get more informed and get more
exposure to market.

OTHER FACTORS
It has been reported several times through several journals that every time the stock market falls
sharply; government asks LIC to step in as a buyer to curtail the fall in the market. Its investment
decision is influenced by the government last year. LIC has to follow the guidelines of IRDA and
there is a proper system to take investment decisions. There has been incidence where it seems
that LIC gets offers from big companies as well to pump in money in market when they are in
need of cash.
This gives LIC a dominant position as it acts as a saviour during crisis due to its surplus liquid
cash reserve.
Nevertheless, it cannot be denied that LIC is a government agency and is therefore trusted by a
lot of companies and has a lot of share in these companies.
Therefore, it has a major role to play in influencing the decisions of such companies and big
market players.

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CHAPTER 3:
ANALYSIS AND FINDINGS
3.1 BALANCE SHEET OF LIC FOR LAST 5 YEARS
(Rupees in Lakhs)
YEARS Mar 16 Mar 15 Mar 14 Mar 13 Mar 12
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 101.00 101.00 101.00 101.00 101.00
Total Share Capital 101.00 101.00 101.00 101.00 101.00
Reserves and Surplus 9,044.98 7,717.44 7,431.90 6,380.29 5,581.21
Total Reserves and Surplus 9,044.98 7,717.44 7,431.90 6,380.29 5,581.21
Total Shareholders’ Funds 9,145.98 7,818.44 7,532.90 6,481.29 5,682.21
NON-CURRENT LIABILITIES
Long Term Borrowings 90,658.14 80,518.55 67,712.33 56,267.94 46,511.30
Deferred Tax Liabilities [Net] 810.90 668.98 0.00 0.00 0.00
Other Long Term Liabilities 865.70 322.75 89.41 47.21 28.09
Long Term Provisions 806.33 696.66 705.99 687.44 623.15
Total Non-Current Liabilities 93,141.07 82,206.93 68,507.73 57,002.59 47,162.54
CURRENT LIABILITIES
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 Short Term Borrowings 5,440.44 2,698.01 3,738.11 2,437.24 1,358.62
Trade Payables 41.39 27.46 25.60 23.19 14.63
Other Current Liabilities 22,268.36 19,421.11 15,602.05 14,318.84 9,942.75
Short Term Provisions 460.53 373.11 370.65 297.08 268.98
Total Current Liabilities 28,210.72 22,519.68 19,736.40 17,076.35 11,584.98
Total Capital And Liabilities 130,497.77 112,545.06 95,777.02 80,560.24 64,429.73
ASSETS
NON-CURRENT ASSETS
Tangible Assets 87.20 73.71 71.49 57.46 56.86
Intangible Assets 4.82 5.94 4.11 4.91 5.38
Fixed Assets 92.02 79.65 75.61 62.37 62.24
Non-Current Investments 271.82 237.12 199.08 184.40 163.99
Deferred Tax Assets [Net] 0.00 0.00 256.57 248.89 220.83
Long Term Loans And Advances 117,786.01 101,943.81 86,026.43 73,416.06 58,063.76
Other Non-Current Assets 0.05 0.04 0.04 5.44 3.56
Total Non-Current Assets 118,149.90 102,260.62 86,557.73 73,917.16 58,514.38
CURRENT ASSETS
Current Investments 5.02 0.02 0.23 0.23 0.03
Trade Receivables 85.39 69.62 68.29 60.63 65.08
Cash And Cash Equivalents 3,926.80 2,933.06 3,022.38 1,465.56 279.29
Short Term Loans And Advances 7,535.44 6,567.86 5,503.83 4,573.25 5,170.93
Other Current Assets 795.21 713.87 624.56 543.40 400.02
Total Current Assets 12,347.87 10,284.44 9,219.29 6,643.07 5,915.35
Total Assets 130,497.77 112,545.06 95,777.02 80,560.24 64,429.73

3.2 Methodology
 Sample profile

A survey was conducted on insurance industry in Raksha Consultants,

MohammedZahoor& SONSan agent of LIC for the primary data among 40 people .

 Data type

This project is based on primary data. Primary data is based on closed ended, open
ended structured questionnaire.

 Tools used

Different types of statistical tools have been used for presenting the survey on online
banking. The two statistical tools are:

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 1. BAR CHART OR BAR GRAPH

2. PIE CHART

BAR CHART OR BAR GRAPH:

A bar graph displays data visually and in sometimes called a bar chart or a bar graph. Data is
displayed either horizontally or vertically and allows viewers to compare items displayed .

PIE CHART:

A pie chart is a circular chart divided into sectors, illustrating relative magnitudes or
frequencies. In a pie chart, the area of each sector is proportional to the quantity it represents.
Together, the sectors create a full circle.

3.3 Analysis
A) TABLE SHOWING AGE OF RESPONDENTS

Sl.No Age No. Of Respondents Percentage (%)

1 Less than 25 yrs. 14 35.83

2 25-35 10 26.67

3 35-45 07 16.67

4 45-55 04 10

5 Above 55 yrs. 05 10.83

Total 40 100

Findings:The above table shows that 35.83% of the respondents belong to the age group of
less than 25 years, 26.67% fall under the category of 25-35 years, 16.67% belong to the age
group of 35-45 years, 10% belong to the age group of 45-55 years and the rest 10.83% above 55
years
Inference:It is inferred that there is a higher percentage (i.e. 35.83%) of respondents in the
age group of less than 25 years and comparatively very lower percentage (i.e. 10%) of
respondents in the age group of 45-55 year.
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CHART SHOWING AGE OF RESPONDENTS

No. Of Respondents

18%

50% 13%

8%
5% 5%

1 Less than 25 yrs 2 25-35 3 35-45

4 45-55 5 Above 55 yrs 5 Total

B. TABLE SHOWING GENDER OF RESPONDENTS

Sl.No Gender No. Of Percentage

Respondents (%)

1 Male 27 67.5

2 Female 13 32.5

Total 40 100

Findings:The above table shows that 67.5% of respondents are male and 32.5% are female
respondents
Inference:It is inferred that there is a higher percentage (i.e. 67.5%) of male respondents.

CHART SHOWING GENDER OF RESPONDENTS

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C. TABLE SHOWING NUMBER OF MEMBERS IN A FAMILY

SL. No No. of family No. Of Percentage (%)

members Respondents

1 2-4 31 75.83

2 5-8 09 24.17

3 More than 8 - -

Total 40 100

Findings:The above table shows that 75.83% of respondents have 2-4 members in their
family and the rest 24.17% of respondents have 5-8 members in their family.
Inference:It is inferred that a higher percentage (75.83%) of respondents have 2-4 members
in their family

CHART SHOWING NUMBER OF MEMBERS IN A FAMILY

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D. TABLE SHOWING ANNUAL INCOME OF RESPONDENTS

S.L Annual income No. Of Respondents Percentage (%)

No

1 Less than Rs.2 lakhs 10 25.83

2 Rs.2-5 lakhs 17 42.5

3 Rs.5 -10 lakhs 07 16.67

4 Rs.10-20 lakhs 03 7.5

5 Above Rs.20 lakhs 03 7.5

Total 40 100

Findings:The above table shows that 25.83% of respondents fall under the income category of
less than 2 lakhs, 42.5% fall under the category of 2-5 lakhs, 16.67% fall under the income
category of 5-10 lakhs, 7.5% in the category of 10-20 lakhs and the rest 7.5% in the income
category above 20 lakhs.

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Inference:It is inferred that there is a higher percentage (42.5%) of respondents in the income
category of 2-5 lakhs and comparatively a very lower percentage (7.5%) of respondents in the
income category of 10-20 lakhs and above 20 lakhs

CHART SHOWING ANNUAL INCOME OF RESPONDENTS

No. Of Respondents

13% 1 Less than Rs.2 lakhs

2 Rs.2-5 lakhs
3 Rs.5 -10 lakhs
50% 21% 4 Rs.10-20 lakhs
5 Above Rs.20 lakhs
5 Total
8%
4% 4%

E. TABLE SHOWING NO. OF GENERAL INSURANCE POLICIES HELD BY RESPONDENTS

SL. No No. of policies No. Of Respondents Percentage (%)

1 1 21 51.67

2 2-4 13 34.17

3 More than 4 06 14.17

Total 40 100

Findings:The above table shows that 51.67% of respondents hold 1 policy, 34.17% holds 2 to 4
policies and the rest 14.17% holds more than 4 general insurance policies .
Inference:It is inferred that a higher percentage (51.67%) of respondents holds 1 general
insurance policy.

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CHART SHOWING NO. OF GENERAL INSURANCE POLICIES HELD BY RESPONDENTS

No. Of Respondents

26%

11
2 02-Apr
50%
3 More than 4
3 Total

17%

7%

F. TABLE SHOWING COMPANIES ENJOYING HIGH REPUTATION AMIDST CUSTOMERS.

S.L No Companies No. Of Respondents Percentage (%)
1 LIC 16 39.17
2 TATA AIG 04 10.83
3 Bajaj Allianz 05 12.5
4 Iffcotokio 03 6.67
5 ICICI 04 10
6 Reliance 05 11.67
7 Others 03 9.17
Total 40 100

Findings:The above table shows that 39.17% of respondents have stated LIC, 10.83% have
stated TATA AIG, 12.5% have stated Bajaj Allianz, 6.67% have stated IffcoTokio, 10% of them
have stated ICICI,11.6% of them have stated Reliance and the rest 9.17% of them have stated
other companies like Cholamandalam and Public sector insurance companies

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Inference: It is inferred that higher reputation amidst customers is enjoyed by LIC with 39.17%
of respondents stating it.

CHART SHOWING COMPANIES ENJOYING HIGH REPUTATION AMIDST CUSTOMERS

No. Of Respondents

20%

5%
50%
6%
3%
5%
6%
5%

1 LIC 2 TATA AIG 3 Bajaj Allianz 4 Iffco tokio

5 ICICI 6 Reliance 7 Others 7 Total

G. TABLE SHOWING AWARENESS AMONGST CUSTOMERS TOWARDS THE INSURANCE

SCHEMES OFFERED BY LIC

SL. No Awareness No. Of Respondents Percentage (%)

1 Yes 23 75

2 No 07 25

Total 30 100

Findings:The above table shows that 75% of respondents, who are policy holders with LIC,
have stated that they are aware of various insurance schemes offered by LIC and the rest 25%

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of respondents who are policy holders with LIC have stated that they are not aware of all the
insurance schemes offered by the company
Inference:It is inferred that higher percentage (75%) of respondents, who are policy holders
with LIC are aware of various insurance schemes offered by the company.

CHART SHOWING AWARENESS AMONGST CUSTOMERS TOWARDS THE INSURANCE

SCHEMES OFFERED BY LIC

No. Of Respondents

38%
50%

13%

1 Yes 2 No 2 Total

H. TABLE SHOWING THE PERIOD OF INSURANCE COVER HELD BY RESPONDENTS.

SL.NO Period of insurance No. Of Percentage

cover Respondents (%)

1 Annual policy 21 50.83

2 1-5 year 12 29.17

3 5-10 year 03 9.17

4 10-15 year 04 10.83

5 Greater than 15 - -
years
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 Total 40 100

Findings:The above table shows that 50.83% of respondents hold annual policy, 29.17% of
them hold 1-5-year policy cover, 9% of them hold 5-10year policy and 10.83% of them hold 10-
15-year policy.
Inference:It is inferred that a higher percentage (50.83%) of respondents holds annual policy .
CHART SHOWING THE PERIOD OF INSURANCE COVER HELD BY RESPONDENTS.

I. TABLE SHOWING THE AMOUNT OF YEARLY INSURANCE PREMIUM PAID

SL No Yearly premium paid No. Of Respondents Percentage (%)

1 Less than Rs.5000 14 35.83

2 Rs.5000-15000 18 48.33

3 Rs.15000-25000 04 10

4 Greater than Rs.25000 02 5.83

Total 40 100

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Findings:The above table shows that 35.83% of respondents have been paying insurance
premium less than Rs.5000 yearly, 48.330% of them have been paying premium between
Rs.5000-15000 yearly, 10% of them have been paying between Rs.15000-25000 as yearly
premium and 5.83% of them have been paying more than Rs.25000 as yearly premiums .
Inference: It is inferred that a higher percentage of respondents (48.3%) have been paying
yearly insurance premium between Rs.5000-15000

CHART SHOWING THE AMOUNT OF YEARLY INSURANCE PREMIUM PAID

No. Of Respondents

1 Less than Rs.5000

18%
1 Less than Rs.5000
2 Rs.5000-15000
4 Total 3 Rs.15000-25000
50% 4 Greater than Rs.25000
2 Rs.5000-15000
24% 4 Total

3 Rs.15000-25000
4 Greater than Rs.25000
3% 5%

J. TABLE SHOWING THE SATISFACTORY LEVEL OF RESPONDENTS TOWARDS THE

POLICY TAKEN

S.No Satisfactory level No. Of Respondents Percentage (%)

LIC Other cos. LIC Other cos.

1 Highly satisfactory 04 02 13.3 8.3

2 Satisfactory 24 27 78.3 88.3

3 Neither satisfactory 02 01 8.3 3.3

nor dissatisfactory

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 4 Dissatisfactory - - - -

5 Highly - - - -
dissatisfactory

Total 30 30 100 100

Findings: The above table shows that among policy holders of LIC 13.3% of them are highly
satisfied with the policy taken, 78.3% of them are just satisfied and the rest 8.3% of them are
neither satisfied nor dissatisfied with the policy taken. Among policy holders of other
companies, 8.3% of them are highly satisfied, 88.3% of them are highly satisfied and the rest
3.35% of them are neither satisfied nor dissatisfied with the policy taken.
Inference: It is inferred that among the policy holders of LIC, higher percentage (78.3%) of
them feel that they are satisfied and 13.3% of them are highly satisfied with the policy taken.
Among other policy holders, a higher percentage (88.3%) of them also feels that they are
satisfied and 8.3% of them feel that they are highly satisfied with the policy take .

K. TABLE SHOWING RESPONDENT’S SATISFACTORY LEVEL TOWARDS VARIOUS FEATURES

OF GENERAL INSURANCE POLICY TAKEN

SL.No Attributes of Highly Satisfied Neither Dissatisfied Highly Total

general satisfied satisfied nor dissatisfied
insurance dissatisfied
cover

1 Low premium 9 92 9 10 - 120

2 Claim 26 86 7 1 - 120
settlement

3 Larger risk 21 83 13 3 - 120

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 coverage

4 Money back 7 41 62 10 120

guarantee

5 Easy access to 21 39 58 2 - 120

agents

Total 84 341 149 26 0 600

CHART SHOWING RESPONDENT’S SATISFACTORY LEVEL TOWARDS VARIOUS FEATURES

OF GENERAL INSURANCE POLICY TAKEN

1 Low premium

4%
Highly satisfied
Satisfied
Neither satisfied nor dissatisfied
38%
50% Dissatisfied
Highly dissatisfied
Total

4% 4%

L. TABLE SHOWING THE SOURCES MOST PREFERRED BY RESPONDENTS TO KNOW ABOUT

INSURANCE COMPANY AND ITS PRODUCTS
SL.No Preferred source of information No. Of Respondents Percentage (%)

1 Ads (print, radio & TV) 10 25.83

2 Insurance agents 15 36.67

3 Friends & Relatives 14 35

4 Others 01 2.5

Total 40 100

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Findings:The above table shows that 25.83% of respondents would prefer Ads, 36.67% of them
prefer insurance agents, 35% of them prefer Friends & relatives, and the rest 2.5% of them
would prefer other sources like company websites, SMS, etc, in order to know about an
insurance company and its products.
Inference:It is inferred that a higher percentage of respondents (36.67%) have stated
insurance agents as the most preferred source.
CHART SHOWING THE SOURCES MOST PREFERRED BY RESPONDENTS TO KNOW ABOUT
INSURANCE COMPANY AND ITS PRODUCTS

No. Of Respondents
1 Ads (print, radio & TV) 2 Insurance agents 3 Friends & Relatives
4 Others 4 Total

13%

18%

50%

18%

1%

3.4 FINDINGS
It has been found out that:

 85 percent of the Indians prefer LIC than any other insurance companies.

 'Prevention of Loss', 'Assured Returns' and 'Long term Investment' are the important

factors influencing Indians in opting for Life Insurance.

 Only few of the Indians are aware of private life insurance companies.

 Most of the Indians are interested in 'Money back' policies than others
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  Most of them are interested in insuring for an amount of Rs. 1- 2 lakhs.

 There is significant relationship existing between monthly household income and amount

insured.

 Agents are mostly responsible for selling insurance products in India.

CHAPTER4: SUGGESTIONANDRECOMMENDATION
4.1 Main findings
 It is found that there is a higher percentage (i.e. 35.83%) of respondents in the age group
of less than 25 years and comparatively very lower percentage (i.e. 10%) of respondent
belongs to the age group of 45-55 years.
 There is a higher percentage (i.e. 67.5%) of male respondents among the respondents
who has taken general insurance cover.
 It is found that a higher percentage (75.83%) of respondents have 2-4 members in their
family.
 It is implied that all the respondents surveyed have stated that it is necessary to have a
general insurance cover.
 It is inferred that higher reputation amidst customers is enjoyed by LIC with 39.17% of
respondents stating it.
 Among the respondents, who are holding general insurance cover it is found that a higher
percentage of respondents (48.3%) have been paying yearly insurance premium between
Rs.5000-15000

4.2 Suggestion

Based on the observations of the study some suggestions for the organization are made as
follows:

1.) Quality of advisors is also as important as the quantity. Thus company should go mainly for
qualified professionals.

2.) Company should increase its budget on publicity so that awareness can be increased.

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3.) Clarity and transparency should be provided to the customer regarding various products.

4.) Training sessions should be planned in advance so that schedule can be provided to the
advisor in advance.

5.) Apart from the Brand Positioning in urban area, a strategy should be adopted by company to
make its brand also near to middle level, or high aspirant people because they are the main
source of the business in India

6.) Awareness Camp to the sub urban area should be focused by company

7.) Some innovative technique or product is required in order to attract the consumer

4.3 Conclusion

The study was conducted to compare the performance of LIC with its industrial competitors.
The study has been able to accomplish its objectives, by thoroughly analyzing and identifying
the competitive position of LIC, strengths and weaknesses of various insurance covers among
the clients of various insurance companies, customer’s awareness and perception about the
company and its products. The company may highly be benefited by the outcome of this study.

It is concluded that the company could initiate various steps based on the recommendations
given in this report. The company by adopting some of the recommendations, if not all, can
further improve its performance and occupy a leading position among other competitors in the
non-life insurance market in future years to come.

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CHAPTER 5:REFERENCE

The project is prepared from information taken from the following sources:

Books:

 Life insurance in India- K.C.Sharma

Website:

 www.lic.com

 www.irda.com

 www.wikipedia.com

Page | 35
 QUESTIONNAIRE
Questionnaire for “INSURANCE SECTOR WITH REFERENCE TO LIFE
INSURANCE CORPORATION OF INDIA”.

Age Groups:
 18 to 25 years- 14
 25 to 35 years- 10
 35 to 45 years- 7
 45 to 55 years- 4
 Above 55 years- 5
Gender:
 Male- 27
 Female- 13
No. of Members in the family:
 2 to 4- 31
 5 to 8- 9
 More than 8- 0
Annual Income :
 Less than 2 Lakhs- 10
 2 to 5 Lakhs- 17
 5 to 10 Lakhs- 07
 10 to 20 Lakhs- 03
 More than 20 Lakhs- 03
Q1. No. of General Insurance Policy held?
 1- 21
 2 to 4- 13
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  More than 4- 06
Q2. In which insurance company they have invested?
 LIC- 16
 TATA AIG- 04
 Bajaj Allianz- 05
 Iffco Tokyo- 03
 ICICI- 04
 Reliance- 05
 Others- 03

Q3. Do you know the various insurance schemes provided by LIC?

 Yes- 30
 No- 10

Q4. Tenure of your Policy?

 Annual Policy- 21
 1 to 5- 12
 5 to 10- 03
 10 to 15- 04

Q5. How much Insurance premium do you pay?

 Less than 5000- 14
 5000 to 15000- 18
 15000 to 25000- 04
 More than 25000- 02

Q6. Are you satisfied with LIC?

 YES- 37
 NO- 03

Q7. What kind of source would you prefer to know about about insurance company?
 Ads- 10
 Insurance Agent- 15
 Friends & Relatives- 14
 Others- 01

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