lOMoAR cPSD| 21303980

A STUDY ON INVESTER PERCEPTION TOWARD CLAIM

SETTLEMENT PROGRESS OF LIC POLICY

A Project submitted to

University of Mumbai for partial completion of the degree

Of

BACHELOR OF COMMERCE (BANKING AND INSURANCE)

Under the Faculty of Commerce

By

Mr. SAMEER SINGH

Under the Guidance of:

Prof. Ms. DARSHAN SAWANT

SHETH T. J. EDUCATION SOCIETY’S,

SHETH N.K.T.T.COLLEGE OF COMMERCE & SHETH J.T.T.

COLLEGE OF ARTS, KHARKAR ALI, THANE (W) April 2023
 Sheth T.J. Education Society’s,

SHETH N.K.T.T. COLLEGE OF COMMERCE &

SHETH J.T.T. COLLEGE OF ARTS, CERTIFICATE

THANE (W)

CERTIFICATE OF PROJECT WORK

This is to certify that, Mr .SAMEER SINGH T. Y.B. II/ B. Com (Banking and Insurance),
Semester-VI Seat No. has undertaken & completed the project titled “A STUDY ON
INVESTER PERCEPTION TOWARD CLAIM SETTLEMENT PROGRESS OF LIC POLICY”
during the academic year 2022-23 under the guidance of Prof. Ms. DARSHAN SAWANT
Submitted of 2023 to this college in fulfilment of the curriculum of BACHELOR OF BANKING
AND INSURANCE, UNIVERSITY OF MUMBAI.
This is a bonafide project work & the information presented is true & original to the Best of our
knowledge & belief.

COORDINATOR PROJECT GUIDE

PRINCIPAL EXAMINAR
 DECLARATION

I, the undersigned Mr. SAMEER SINGH hereby declare that the work embodied in this project
work titled “A STUDY ON INVESTER PERCEPTION TOWARD CLAIM SETTLEMENT
PROGRESS OF LIC POLICY” forms my own contribution to the research work carried out
under the guidance of Prof. Ms. DARSHANA SAWANT is a result of my own research work and
has not been previously submitted to any other University for any other Degree/Diploma to this or
any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as
such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct .

Mr. SAMEER SINGH

Leaner

Certified by

Prof. Ms. DARSHANA SAWANT

Project Guide

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 Acknowledge
I would like to extend my heartfelt thanks to all who have helped me for completion of this project.
A simple thank you would be insufficient because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh Dimensions in the
completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Dr. Dilip Patil for providing the necessary facilities required
for completion of this project.

I take this opportunity to thank our SFC Coordinator, Prof. Dr. Yogeshwari Patil for her moral
support and guidance.

I would also like to express my sincere gratitude towards my project guide Asst. Prof. Ms.
DARSHAN SAWANT under whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books and
magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers who supported me throughout my project.

Mr. SAMEER SINGH

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 TABLE OF CONTENTS

CHAPTERS PAGE NO.

1. EXECUTIVE SUMMARY 01-01

2. INTRODUCTION 02-78
● CONCEPT OF INSURANCE 02-03
● OVERVIEW OF CURRENT INSURANCE INDUSTRY 04-05
● ADVANTAGES OF LIFE INSURANCE 06-08
● HISTORY OF INSURANCE 09-38
● INTRODUCTION TO LIC 39-48
● PRODUCTS OFFERED BY LIC 49-53
● TOP 15 INSURANCE COMPANY IN INDIA 54-72
● SWOT ANALYSIS OF LIC OF INDIA 73-76
● HYPOTHESIS 77
● OBJECTIVES OF THE STUDIES 78
● SCOPE OF THE STUDY 78
● LIMITATIONS OF THE STUDY 78

3. REVIEW OF LITERATURE 79-87

4. RESEARCH DESIGN AND METHODOLOGY 88

● TYPE OF RESEARCH 88
● SAMPLE DESIGN 88
● SAMPLE SIZE 88
● SAMPLING TECHNIQUE 88
● DATA SOURCE 88

5. DATA ANALYSIS AND INTERPRETATIONS 89-94

6. FINDINGS, SUGGESTIONS & CONCLUSION 95-98

QUESTIONNAIRE 99-101
 CHAPTER – 1
EXECUTIVE SUMMARY

The main purpose of the study is to be identified the investor’s investing perception and
attitude towards life insurance at Mumbai city which will help the company to make the
marketing strategy. The study will help the company to make strategies and new products /
plan and emphasize on their weaker areas. And also the brand image of various companies will
be known which will helps the company to find out where their competitor stands in the minds
of the people. And also the most of the people are invested in the insurance. Majority of the
people are need safety investment and also to get the more returns.

Topic of the study

A study on perception of investors investing in life insurance

Research Objective
1) To examine the awareness of customers to life insurance
2) To know the satisfaction level of customers.
3) To identify the expectations of customers towards LIC
4) To study the needs of customers.
5) To know the opinion regarding benefits provided by life insurance.
6) To compare LIC with competitors.

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 CHAPTER - 2 INTRODUCTION

“The Business of Insurance is related to the protection of the economic values of the assets”.
Every human being has the tendency to save to protect him from risks or events of future.
Insurance is one form of savings where in people try to assure themselves risks or uncertainties
of future. It is assurance against risks or events or losses. People can save their earnings either
in the form gold, fixed assets like property or in banking and insurances. All the savings of
people of a country account for gross domestic savings. In India, although savings rate is high
but people prefer to invest either in gold or fixed assets so that they can make money out of it.
Hence insurance sector is still untapped in India.

CONCEPT OF INSURANCE
Life has always been an uncertain thing. To be secure against unpleasant possibilities, always
requires the utmost resourcefulness and foresight on the part of man. To pray or to pay for
protection is the spirit of the humanity. Man has been accustomed to pray God for protection
and security from time immemorial. In modern days Insurance Companies want him to pay for
protection and security. The insurance man says "God helps those who help themselves";
probably he is correct.

Too many people in this country are not in employment; and work for too many no longer
guarantees income security. Several millions are part-time, self-employed and low-earning
workers living under pitiable circumstances where there is no security cover against risk.
Further the inherent changing employment risks, the prospect of continual change in the work
place with its attendant threats of unemployment and low pay especially after the adoption of
New Economic Policy and the imminent lifecycle risks - a new source of insecurity which
includes the changing demands of family life, separation, divorce and elderly dependents are
tormenting the society. Risk has become central to one's life. It is within this background life
insurance policy has been introduced by the insurance companies covering risks at various
levels. Life insurance coverage is against disablement or in the event of death of the insured,
economic support for the dependents. It is a measure of social security to livelihood for the
insured or dependents. This is to make the right to life meaningful, worth living and right to
livelihood a means for sustenance. Therefore, it goes without saying that an appropriate life
insurance policy within the paying capacity and means of the insured to pay premium is one of

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the social security measures envisaged under the Indian Constitution. Hence, right to social
security, protection of the family, economic empowerment to the poor and disadvantaged are
integral part of the right to life and dignity of the person guaranteed in the constitution.

Man finds his security in income (money) which enables him to buy food, clothing, shelter and
other necessities of life. A person has to earn income not only for himself but also for
hisdependents, viz., wife and children. He has to prov3ide legally for his family needs, and so
he has to keep aside something regularly for a rainy day and for his old age. This fundamental
need for security for self and dependents proved to be the mother of invention of the institution
of life insurance.

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 OVERVIEW OF CURRENT INSURANCE
INDUSTRY WHAT IS INSURANCE?
Insurance is a tool by which fatalities of a small number are compensated out of funds
(premium payment) collected from plenteous. Insurance is a safeguard against uncertain events
that may occur in the future. It is an arrangement where the losses experienced by a few are
extended over several who are exposed to similar risks. It is a protection against financial loss
arising on the happening of an unexpected event. Insurance companies collect premium to
provide security for the purpose. Loss is paid out of the premium collected from people and the
insurance companies act as trustees to the amount so collected. These companies have proposal
forms which are filled to give details of insurance required. Depending upon the answers in the
proposal from insurance companies assess the risk and decide on the premium. Insurance
companies are risk bearers. They underwrite the risk in return for an insurance premium. The
function of insurance is to provide protection, prevent losses; capital formation etc. hence
insurance can be defined as a tool in which a sum of money as a premium is paid by the insured
in consideration of the insurer’s bearing the risk of paying a large sum. It may also be defined
as a contract wherein one party (insurer) agrees to pay the other party (insured) or his
beneficiary, a certain sum upon a given contingency against which insurance is required.
Insurance industry Commands massive funds through sales of insurance products to large
number of clients. Insurers also create liabilities and commit themselves to compensate for
losses occurring to the policyholders on future date. It also plays an important role in process
of capital formation.

NATURE OF INSURANCE
a)Risk sharing and risk transfer:
Insurance is used to share the financial losses that might occur to an individual or his family on
the happening of specified events. The loss arising from such events are shared by all the
insured in the form of premium. Example: suppose in a village, there are 250 houses, each
valued at Rs. 200000. Every year one house gets burnt, resulting into a total loss of Rs 200000.
If all the 250 owners come together and contribute Rs.800 each, the common fund would be
Rs200000.This is enough to pay to the owner whose house gets burnt. Thus the risk of one
owner is spread over 250 house owners of the village.

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a) Risk assessment in advance:
Insurance companies are risk bearers. They assess the risk before insuring to charge the amount
of premium.

b) Its not gambling or charity:

The uncertainty is changed to certainty by insuring property and life because the insurer
promises to pay a definite sum at damage or death. Insurance is antithesis of gambling. Failure
of insurance amounts to gambling because the uncertainty of loss is always looming. Moreover
insurance is not possible without premium. So it is different from charity because charity is
given without consideration.

c) Huge number of insured people:

It is essential to insure larger number of people or property to make cost of insurance less
consequently premium would also be less.

d) Assists in capital formation:

Insurance provides capital to society. Accumulative funds are invested in productive channels.

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 ADVANTAGES OF LIFE INSURANCE
1. In the event of death, the settlement is easy. The heirs can collect the moneys quicker,
because of the facility of nomination and assignment. The facility of nomination is now
available for some bank accounts.

2. There is a certain amount of compulsion to go through the plan of savings. In other forms,
if one changes the original plan of savings, there is no loss. In insurance, there is a loss.

3. Certain cannot claim the life insurance moneys. They can be protected against attachments
by courts.

4. There are tax benefits, both in income tax and in capital gains.

5. Marketability and liquidity are better. A life insurance policy is property and can be
transferred or mortgaged. Loans can be raised against the policy. The following tenets help
agents to believe in the benefits of life insurance. Such faith will enhance their determination
to sell and their perseverance.

6. Life insurance is not only the best possible way for family protection. There is no other way.

7. Insurance is the only way to safeguard against the unpredictable risks of the future. It is
unavoidable.

8. The terms of life are hard. The terms of insurance are easy.
9. The value of human life is far greater than the value of property. Only insurance can preserve
it.

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10. Life insurance is not surpassed by many other savings or investment instrument, in terms
of security, marketability, stability of value or liquidity.

11. Insurance, including life insurance, is essential for the conservation of many businesses,
just as it is in the preservation of homes.

12. Life insurance enhances the existing standards of living.

13. Life insurance helps people live financially solvent lives.

14. Life insurance perpetuates life, liberty and the pursuit of happiness.

15. Life insurance is a way of life.

SEMANTICS
1. Risk: It is defined as an uncertainty of a financial loss. It is the unintentional decline in or
disappearance of value arising from contingency.

2. Policy: It is the document which embodies the insurance contract.

3. Whole life policy: It is the policy under which the amount of policy will be paid only on
death of the insured. Premiums may be payable throughout the life or for a limited period.

4. Endowment policy: Endowment policies entitle the insured to receive the amount of the
policy on his reaching a certain age and premiums also stops. If death occurs earlier, amount
of the policy will be paid at that time and payment of premium will also stop at that time.

5. Claim: It is the amount which an insurer has to pay against a policy.

6. Reinsurance: It refers to placing a part of the risk by an insurer with another insurer. The
object is to reduce the possible loss to be borne by the original insurer, who pays premiums at
the ordinary rates to the reinsurer. Reinsure must pay commission to the original insurer.

7. Premium: A periodic payment made on an insurance policy.

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8. Insurance penetration: It is defined as insurance premium as a share of gross domestic product.

9. Insurance density: Insurance density is defined as per capita expenditure on insurance premium
i.e. premium per capita.

10. Actuary: The actuary is a specialist who combines an understanding of risks and
mathematical technique to develop financial products to manage these risks, price these
products. He helps in designing insurance plans and then evaluates the financial risk of the
company which it takes while selling an insurance policy.
TYPES OF INSURANCE
Insurance is broadly divided in two segments, based on the nature of insurance, those are:
1. Life Insurance &
2. Non-Life Insurance or General Insurance.

It can be again subdivided into the following categories:

● Fire Insurance.
● Marine Insurance.
● Social Insurance
● Miscellaneous Insurance. (Health insurance, Liability Insurance etc….)

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 HISTORY OF INSURANCE
For now we know the meaning of insurance, different types of insurance. Now let us know the
history and reasons for and behind different types of insurance.

Insurance has existed for thousands of years. The first ever type of insurance was Property
Insurance. It became popular about 3000 BC in China. It all started when Chinese merchants,
as well as their investors, wanted to ensure that they would see a profit from their goods that
they shipped overseas. In the event that a ship was lost at sea, an insuring partner would
reimburse the owners of the ship and goods. To pay for the loss the merchant would be sold
into slavery to the insurer until the debt was repaid. This was so because, a merchant could not
afford to pay for the lost goods or even to buy a ship unless someone invested.

Property insurance was also seen in Babylon as well. In Babylon, merchants and investors
entered into a contract, in which the supplier of money for a trade agreed to cancel the loan if
the trader was robbed of his goods. The trader who borrowed the money paid an extra amount
for this protection in addition to the usual interest. As for the lender, collecting these premiums
from many traders made it possible for him to absorb the losses of the few. Later this contract
was extended to include provisions for a family's home and even the death of the insured, where
life insurance came into existence. Slowly this concept started to spread across other places
like Greek, Roman.

Since ancient times, communities have pooled some of their resources to help individuals who
suffer loss. Like, about 3500 years ago, Moses instructed the nation of Israel to contribute a
portion of their produce periodically for "the alien resident and the fatherless boy and the
widow. Later the origin of credit insurance, which was included in the Code of Hammurabi, a
collection of Babylonian laws said to predate the Law of Moses. Credit insurance means, in
ancient times the ship owners obtained loans from investors to finance their trading expeditions.
In case, if a ship was lost, the owners were not responsible to pay back the loans to the investors.
The risk to the lenders was covered by the interest paid by numerous ship owners, since many
ships returned safely.
By the middle of the 14th century, marine insurance was one of the most popular types of

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insurance among nations of Europe. Things changed dramatically in the 17thcentury in Europe.
In 1666, the Great Fire of London bought the need for fire insurance .The Great Fire of London
burned for four days and nights. It destroyed 436 acres, 13,200 houses, 89 churches (including
Saint Paul's Cathedral), the Custom House, the Royal Exchange and dozens of other public
buildings. Only six people were victims in the flames, but hundreds died from shock and
exposure.

By 1688, Edward Lloyd was running a coffeehouse in London. Where, London merchants and
bankers met informally to do business. There financiers who offered insurance contracts to
seafarers wrote their names under the specific amount of risk that they would accept in
exchange for a certain payment, called premium. These insurers came to be known as
underwriters.
Finally, in 1769, Lloyd's became a formal group of underwriters that in time grew as an
insurance company.

The concept of insurance developed at a fast pace with the growth of British commerce in the
17th and 18th century. The first stock companies to engage in insurance were chartered in
England in the year 1720.

In 1735, the first insurance company in the American colonies was founded at Charleston. Later
in the year 1787, fire insurance corporations were formed in New York. Then later in the year
1759, the life insurance corporation was started in Philadelphia, America.

The New York fire which occurred in the year 1835 was the main reason to draw attention to
create reserves to meet unexpected losses. In the year 1837, Massachusetts was the first state
to require companies by law to maintain such reserves. After 1840, life insurance entered a
boom period.

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 HISTORY OF INSURANCE INDUSTRY IN INDIA

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu
(Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). The writings talk in
terms of pooling of resources that could be re-distributed in times of calamities such as fire,
floods, epidemics and famine. This was probably a pre-cursor to modern day insurance.
Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade
loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing from
other countries, England in particular.

The insurance industry in India over the past century has gone through big changes. In India
this industry reveals the 360 degree turn. 360 degree turn means that it started in India from
being an open competitive market to nationalization and back to a liberalized market again.
Insurance industry in India started as a fully private system with no restriction on foreign
participation in the Nineteenth Century.

Before independence, a few British insurance companies dominated the Market. Life insurance
was first set up in India through a British company called the Oriental Life Insurance Company
(In Calcutta) in 1818, followed by the Bombay Assurance Company in 1823 and the Madras
Equitable Life Insurance Society in 1829. All of these companies operated in India but did not
insure the lives of Indians. They were there insuring the lives of Europeans living in India.
Some of the companies that started later did provide insurance for Indians. But, they were
treated as

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"substandard" and therefore had to pay an extra premium of 20% or more. Bombay Mutual
Life Assurance Society heralded the birth of first Indian life insurance company in the year
1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly
patriotic motives, insurance companies came into existence to carry the message of insurance
and social security through insurance to various sectors of society. The first general insurance
company, Triton Insurance Company Ltd., was established in 1850. It was owned and operated
by the British.

Bharat Insurance Company (1896) was also one of such companies inspired by nationalism.
The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United
India in Madras, National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance
Company took its birth in one of the rooms of the Jorasanko, house of the great poet
Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi
Life (later Bombay Life) were some of the companies established during the same period. Prior
to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life
Insurance Companies Act, and the Provident Fund Act were passed.

The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and
periodical valuations of companies should be certified by an actuary. But the Act discriminated
between foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From
44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total
business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies
many financially unsound concerns were also floated which failed miserably. The Insurance
Act 1938 was the first legislation governing not only life insurance but also non-life insurance
to provide strict state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly.
However, it was much later on the 19th of January, 1956, that life insurance in India was
nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75
provident were operating in India at the time of nationalization.

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Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8
zonal offices, 1381 satellite offices and the corporate office. LIC’s Wide Area Network covers
113 divisional offices and connects all the branches through a Metro Area Network. LIC has
tied up with some Banks and Service providers to offer on-line premium collection facility in
selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centre’s have been commissioned at
Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere servicing and
many other conveniences in the future.

After the independence, the industry went to the other extreme. It became a state-owned
monopoly. The industry started to witness a problem like fraud. Hence many regulations were
put in place to reduce and control the problems in the industry. After which Insurance was
nationalized. In 1956, the then finance minister S. D. Deshmukh announced nationalization of
the life insurance business and then the general insurance business was nationalized in 1972.
Only in 1999 private insurance companies have been allowed back into the business of
insurance with a maximum of 26% of foreign holding.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC
has issued over one crore policies during the current year. It has crossed the milestone of issuing
1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this
message of protection to light the lamps of security in as many homes as possible and to help
the people in providing security to their families.

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INDIAN LIFE INSURANCE INDUSTRY

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15
 World Insurance Marketplace

World Life and Nonlife Insurance In 2018

Outside the United States, the insurance industry is divided into life and nonlife (or general
insurance), rather than life/annuity and property/casualty. Swiss Re’s 2018 world insurance
study is based on direct premium data from 147 countries, with detailed information on the
largest 88 markets. World insurance premiums rose 1.5 percent in 2018, adjusted for inflation,
to $5.2 trillion, reaching the $5 trillion mark for the first time. 2018’s rise was above the 1.2
percent growth recorded in 2008 to 2017. Nonlife premiums grew 3.0 percent in 2018, adjusted
for inflation, faster than the 2.2 percent growth from 2008 to 2017. Life insurance premiums
grew 0.2 percent in 2018, falling behind the 0.6 percent rise in 2008 to 2017, adjusted for
inflation.

Top 10 Countries by Life and Nonlife Direct Premiums Written, 2018

(US$ millions)

Total premiums

Nonlife % change
Life premium from % of total
Rank Country premiums s (2) Amount prior year world premiums

1 United States (3), (4) $593,391 $875,984 $1,469,375 5.0% 28.29%

2 PR China (4) 313,365 261,512 574,877 6.2 11.07

3 Japan (4), (5) 334,243 106,405 440,648 3.8 8.49

4 United Kingdom (4) 235,501 101,009 336,510 5.2 6.48

5 France (4) 165,075 92,888 257,963 5.6 4.97

6 Germany (4) 96,439 145,046 241,485 6.3 4.65

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7 South Korea (5) 98,072 80,951 179,024 -1.2 3.45

8 Italy 125,341 44,933 170,273 6.9 3.28

9 Canada (4), (6) 54,070 73,833 121,181 5.5 2.46

10 Taiwan 102,044 19,864 121,908 3.8 2.35

(1) Before reinsurance transactions.

(2) Includes accident and health insurance.
(3) Nonlife premiums include state funds; life premiums are net premiums and include an
estimate of group pension business.
(4) Estimated or provisional.
(5) Financial year April 1, 2018 – March 31, 2019.
(6) Nonlife premiums are gross premiums, including reinsurance.

Source: Swiss Re, sigma, No. 3/2019.

View Archived Tables

World Life and Nonlife Insurance Direct Premiums Written, 2018

(US$ billions)

(1) Before reinsurance transactions.

(2) Includes accident and health insurance.

Source: Swiss Re, sigma, 3/2019.

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 View Archived Graphs

World Life and Nonlife Insurance

Direct Premiums Written, 2016-2018

(US$ millions)

Year Life Nonlife (2) Total

2016 $2,576,886 $2,117,918 $4,694,804

2017 2,724,017 2,233,490 4,957,507

2018 2,820,175 2,373,050 5,193,225

(1) Before reinsurance transactions.

(2) Includes accident and health insurance.

Source: Swiss Re, sigma database, sigma No. 3/2019.

View Archived Tables

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Top 10 Countries by Total Insurance Premiums per Capita and Percent of Gross
Domestic Product (GDP), 2018 (1)

Total premiums Total premiums as

Rank Country per capita Rank Country a percent of GDP

Cayman
1 $11,642 1 Taiwan 20.88%
Islands

2 Hong Kong 8,863 2 Hong Kong 18.16

3 Switzerland 6,934 3 Cayman Islands 17.51

4 Denmark 6,289 4 South Africa 12.89

5 Ireland 5,253 5 South Korea (2) 11.16

United
6 Taiwan 5,161 6 10.61
Kingdom

7 Luxembourg 5,001 7 Denmark 10.37

8 Singapore 4,958 8 Finland 9.87

9 Finland 4,926 9 Netherlands 9.24

10 Netherlands 4,890 10 France 8.89

Total world $682 Total world 6.09%

(1) Includes nonlife and life insurance and cross-border

business. (2) April 1, 2018 to March 31, 2019.

Source: Swiss Re, sigma, No.

3/2019. View Archived Tables

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 LIFE INSURANCE
Life Insurance Corporation of India (LIC) is an Indian State owned insurance group and
Investment Corporation owned by the Government of India.

The Life Insurance Corporation of India was founded in 1956 when the Parliament of India
passed the Life Insurance of India Act that nationalized the insurance industry in India. Over
245 insurance companies and provident societies were merged to create the state owned Life
Insurance Corporation.

As of 2019, it had total life fund of ฀ 28,28,320.12 crore and total number of policies
sold coming in at ฀214.33 lakh that year (2018-19). LIC settled 259.54 lakh claims in
2018-19. LIC has 29 crore policy holders.

Growth as a monopoly
From its creation, the Life Insurance Corporation of India, which commanded a monopoly of
soliciting and selling life insurance in India, created huge surpluses and by 2006 was
contributing around 7% of India's GDP.

The corporation, which started its business with around 300 offices, 5.7 million policies and a
corpus of INR 45.9 crores (US$92 million as per the 1959 exchange rate of roughly ฀5
for US$1),[7] had grown to 25,000 servicing around 350 million policies and a corpus of over
฀800,000 crore (US$120 billion) by the end of the 20th century.

In August 2000, the Indian Government embarked on a program to liberalize the insurance
sector and opened it up for the private sector. LIC emerged as a beneficiary from this process
with robust performance, albeit on a base substantially higher than the private sector.

In 2013 the first year premium compound annual growth rate (CAGR) was 24.53% while total
life premium CAGR was 19.28% matching the growth of the life insurance industry and
outperforming general economic growth.

Operations
Today LIC functions with 2048 fully computerized branch offices, 8 zonal offices, around 113
divisional offices, 2,048 branches and 1408 satellite offices and the Central Office; it also has
54 customer zones and 25 metro-area service hubs located in different cities and towns of India.

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It also has a network of 1,537,064 individual agents, 342 Corporate Agents, 109 Referral
Agents, 114 Brokers and 42 Banks for soliciting life insurance business from the public.

Now LIC also has the 1899 branches of IDBI bank at its disposal thus it can carry out its
insurance business through these branches of the bank.

Slogan
LIC's slogan Yogakshemam vahaamyaham is in Sanskrit which loosely translates into English
as "Your welfare is our responsibility". This is derived from ancient Hindu text, the Bhagavad
Gita's 9th chapter, 22nd. The slogan can be seen in the logo, written in Devanagari script. This
line means "I carry what they lack, and I preserve what they have" (refers to Krishna speaking
to Arjuna), when taken in context of the entire verse.

21
 Awards and recognition

The Economic Times Brand Equity Survey 2012 rated LIC as the No. 6 Most Trusted
Service Brand of India.
From the year 2006, LIC has been continuously winning the Readers' Digest Trusted
brand award.
Voted India's Most Trusted brand in the BFSI category according to the Brand Trust
Report for 4 continuous years - 2011-2014 according to the Brand Trust Report.
7th Annual Greentech HR Platinum Award 2017 for Training Excellence (3rd time in a row)
Certificate of Appreciation by the Jury of BML Munjal Award 2017
Golden Peacock National Training Award in Training for the year 2018 (3rd time in a row)
Global Best Employer Brand Award 2017 for Excellence in Training

Employees & agents

As on 31 March 2018, LIC had 111,979 employees, out of which 24,510 were women.

Category of employees Total Number No. of Women

Class-I Officers 32,803 7,041

Class-II Development Officers 22,830 1,148

Class III/IV employees 56,346 16,321

Total 111,979 24,510

22
Agency strength
The total number of Agents on our Roll is 11,48,811 as at 31.03.2018 as against 11,31,181 as
on 31.03.2017. The number of Active Agents is 10,71,945 as at 31.03.2018 as compared to
10,46,484 as on 31.03.2017.

IDBI Bank Employees

Now IDBI bank Employees have also joined the work force of LIC. However, they are not
treated as same as LIC employees.

Initiatives
Golden Jubilee Foundation LIC Golden Jubilee Foundation was established in 2006 as
a charity organization. This entity has the aim of promoting education, alleviation of
poverty, and providing better living conditions for the under privileged. Out of all the
activities conducted by the organization, a Golden Jubilee Scholarship award is the
best known. Each year, this award is given to the meritorious students in standard XII
of school education or equivalent, who wish to continue their studies and have a
parental income less than ฀100,000 (US$1,400).

Holdings
LIC holds shares worth about ฀2.33 lakh crore in all the Nifty companies put together, but it
lowered its holding in a total of 27 Nifty companies during the quarter.

The cumulative value of LIC holding in these 27 companies fell by little over ฀8,000 crore
during
the quarter shows the analysis of changes in their shareholding patterns.

Individually, LIC is estimated to have sold shares worth ฀500-1,000 crore in each of
Mahindra & Mahindra, HDFC Bank, ICICI Bank, Tata Motors, L&T, HDFC, Wipro, SBI,
Maruti Suzuki, Dr Reddy’s and Bajaj Auto.

The insurance behemoth also trimmed holdings in Ambuja Cements, Cipla, TCS, Lupin and
Asian Paints. A marginal decline was also witnessed in its stakes in companies such as IDFC,
Hindustan Unilever, Grasim, ACC, BPCL, Bank of Baroda, Punjab National Bank, Sun Pharma
and Tata Power.

On the other hand, LIC further ramped up its stake in a total of 14 Nifty constituents
23
with purchase of shares worth an estimated ฀4,000 crore. The major companies
where LIC has raised its stake include Infosys, RIL, Coal India Ltd and Cairn India.
Other such companies are ITC, Power Grid Corp, NTPC, Siemens, Bharti Airtel and
Hero MotoCorp.

The state-run insurer also marginally hiked its exposure in Ultratech, Gail India, Ranbaxy,
Kotak Mahindra Bank and HCL Technologies, while its shareholding remained almost
unchanged in companies like ONGC, Tata Steel, BHEL and Reliance Infra.
Among the Nifty companies, LIC’s holding in terms of value in 2012 were estimated to
be the highest in ITC (฀27,326 crore), followed by RIL (฀21,659 crore), ONGC
(฀17,764 crore), SBI (฀17,058 crore), L&T (฀16,800 crore), and ICICI Bank (฀10,006
crore).

The share price drop in ITC on 18 July 2017 had caused LIC a major loss of around 7000
Crores. LIC now also holds 51% stake in IDBI bank thus making it the only insurer in India to
own a bank
, since regulations prohibit insurers from holding more than 15% stake in any company ,LIC
will have to decide a timeline for paring its stake in IDBI bank also LIC will have to pare its
stake in LIC housing finance Ltd as a company cannot be promoter of 2 finance companies
carrying out same housing finance business so either LIC has to sell its stake in LIC housing
or close down housing business of IDBI bank.

24
 GENERAL INSURANCE
General insurance or non-life insurance policies, including automobile and homeowners
policies, provide payments depending on the loss from a particular financial event. General
insurance is typically defined as any insurance that is not determined to be life insurance. It is
called property and casualty insurance in the United States and Canada and non-life
insurance in Continental Europe.

In the United Kingdom, insurance is broadly divided into three areas: personal lines,
commercial lines and London market.

The London market insures large commercial risks such as supermarkets, football players and
other very specific risks. It consists of a number of insurers, reinsurers, P&I Clubs, brokers and
other companies that are typically physically located in the City of London. Lloyd's of London
is a big participant in this market. The London market also participates in personal lines and
commercial lines, domestic and foreign, through reinsurance.

Commercial lines products are usually designed for relatively small legal entities. These would
include workers' compensation (employer’s liability), public liability, product liability,
commercial fleet and other general insurance products sold in a relatively standard fashion to
many organizations. There are many companies that supply comprehensive commercial
insurance packages for a wide range of different industries, including shops, restaurants and
hotels. Personal lines products are designed to be sold in large quantities. This would include
autos (private car), homeowners (household), pet insurance, creditor insurance and others.

ACORD, which is the insurance industry global standards organization, has standards for
personal and commercial lines and has been working with the Australian General Insurers to
develop those XML standards, standard applications for insurance, and certificates of currency.

AWARDS
In 2012, The General and Ken Roberts Productions received three Telly Awards in the
Animation category. A Silver Award was won for the Baseball ad, and Bronze Awards were
won for Football and Snowboard.
25
CONTRIBUTION OF THE INSURANCE SECTOR TO INDIAN ECONOMY

Moody's Investors Service said India's

insurance and reinsurance sectors will grow
strongly driven by strong economic growth
and evolving regulatory regime. It said
robust GDP expansion, coupled with current
low insurance penetration, should support
double digit growth for the non-life sector
over the next 3-4 years.

During fiscal 2018, total gross premiums for

the non-life and life insurance sectors grew
11.5 per
cent to Rs. 6.1 lakh crore (USD 94 billion), bringing the 5 year compound annual growth rate
(CAGR) to 11 per cent.

"India's strong economy and evolving regulatory regime continue to support growth for its
insurance and reinsurance sectors," Moody's said in a report titled Insurance - India: Continued
regulatory evolution is credit positive for India's insurance sector.

Moody's said it expects India's real GDP to expand by 7.4 per cent and 7.3 per cent in fiscal
2019 and 2020, making the Indian economy one of the world's fastest-growing.

"The Insurance Regulatory and Development Authority of India (IRDAI) is proactively

introducing regulations that will support insurers' balance sheets and improve their access to
capital, a credit positive," Moody's Assistant VP and Analyst Mohammed Londe said.

Liberalization of the reinsurance sector - with the admission of foreign reinsurers since 2017
and IRDAI's steps to ensure that they can compete with incumbents - will specifically benefit
the non- life sector. Regulatory reforms will also improve the sector's capital strength, Moody's
said. In 2015, IRDAI raised the ceiling on foreign ownership of Indian insurers to 49 per cent
from 26 per cent, encouraging global players to buy holdings NSE 0.10 % in local entities.

26
 PROGRESS IN INSURANCE BUSINESS

Besides, the government's launch of a new program in 2018 to provide health insurance for
100 million families is credit positive as it will help grow health premiums and provide insurers
with cross-selling opportunities, it noted.

State-run insurance giant, Life Insurance Corporation (LIC) has further increased its dominance
in India's life insurance market with a 6 per cent increase in the market share between Aprils
to September 2019. In the overall insurance market in India, LIC's share now stands at 72 per
cent where several state-run life insurers are increasingly outdoing their private competitors in
getting new businesses.

LIC registered the growth of 18 per cent in September 2019 as compared to last year and an
impressive growth of 42 per cent in the first half of FY20, the latest data released by insurance
regulators IRDAI showed.

"Recent months have seen strong new business growth for LIC taking its market share to
72%…Retail business has shown strong traction with a 22 percent growth in the first half of
the fiscal, on the back of new launches in the individual single premium segment," according
to a report by brokerage Jefferies.

However, the ongoing economic slowdown seems to have finally caught up with the insurance
sector. Individual Annual Premium Equivalent (APE) declined 3% in September as against the
same period last year September as compared to 11-27% year on year growth in April to August
2019.

APE is a metric which is used when the sales contain both single premium and regular premium
businesses. Also, APE is a measure used for comparison of life insurance revenue by
normalizing policy premiums into the equivalent of regular annual payments.

According to the brokerage report by Kotak Securities, "Even the high-growing HDFC Life
declined after five months of consistent high growth. SBI Life and Max Life continued to
moderate for the second consecutive month." The report also said that, "Net inflows to equity
mutual funds dropped sharply month-on-month as well."

During the same period, new business by life insurers grew 15 per cent in September as against
last year, while registering a growth of 35 per cent between April and September, as per the
27
sources. Against the average industry growth, private sector life insurers could only register a
growth of 9 per cent in September as against last year, the data showed.

"New Business Premium (NBP) and total Annualized Premium Equivalent (APE) grew at a
slower pace of 9 per cent and 4 per cent, respectively, in Sep'19 for private life insurers," as
per a report by ICICI Securities. As per the brokerage, SBI Life and Bajaj Allianz were the
outstanding performers of the first half of fiscal 2019 while HDFC Life registered faltering
numbers in the reported period.

"HDFC Life (HDLI) reported 16 per cent and 20 per cent decline in total and individual APE
which would be on account of a high base and possible decline in guaranteed savings products
under declining interest rates," ICICI Security report said. "Bajaj Allianz and SBI Life were
relative outperformers in September. SBI Life maintained leadership in the number of
individual policies which grew 13 per cent compared to 5 per cent for private life insurers."

28
 NATIONALIZATION
THE LIFE INSURANCE CORPORATION OF INDIA: 1956

This was the first step taken towards the nationalization of life insurance business in India. On
20th January, 1956 all life insurance companies were taken over by 43 nominated custodians.
The custodians were experienced senior executives of private insurance companies, reporting
directly to the Finance Ministry. From the word go, the complex task of running the industry
on a permanent basis and continuing the services to policy holders without interruption were
their major concerns. The actual work of integration had to await legislation. The custodians
managed the insurance companies till 1-09-1956, when Life Insurance Corporation was
established under the general direction and control of the Ministry of Finance. The Ordinance
provided for the transfer of the control of 154 Indian insurers, 16 non-Indian insurers and 75
provident societies. These arrangements were designed to ensure that no inconvenience
whatsoever was caused to the policy holders. With the Government take over the management
aimed towards the evolution of a common uniform premium rate, policy conditions and service
and working procedures and above all to help promote team spirit. The corporation, a body
corporate shall consist of not more than
15 members appointed by the Central Government, one of them being appointed by the
government as chairman. The capital of the corporation was at Rs 5 crore provided by the
central government.

29
 INDIAN INSURANCE SECTOR REFORMS – R N MALHOTRA

The formation of the Malhotra Committee in 1993 initiated reforms in the Indian insurance
sector and is considered as one of the milestones in the history of Insurance in India.

The aim of the Malhotra Committee was to assess the functionality of the Indian insurance
sector. This committee was also in change of recommending the future path of insurance in
India.

The Malhotra Committee attempted to improve various aspect of the insurance sector, making
them more appropriate and effective for the Indian market.

The Insurance Regulatory and Development Authority Act of 1999 brought about several
crucial policy changes in the insurance sector of India. It led to the formation of the Insurance
Regulatory and Development Authority (IRDA) in 2000.

The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to
initiate different policy measures to help sustain growth in the Indian insurance sector.

In 1994, the committee submitted the report and some of the key recommendations included:

(1) STRUCTURE
● Government stake in the Insurance Companies to be brought down to 50%.
● Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations.
● All the insurance companies should be given greater freedom to operate

(2) COMPETETION
● Private Companies with minimum paid up capital of Rs.1 bn should be allowed to
enter the industry.
● No Company should deal in both Life and General Insurance through a single entry.
● Foreign Companies may be allowed to enter the industry in collaboration with the
domestic companies.
● Postal Life Insurance should be allowed to operate in the rural market.
● Only one State Level Life Insurance Company should be allowed to operate in each state.

(3) REGULATORY BODY

30
 ● The Insurance Act should be changed
● An Insurance Regulatory Body should be set up.
● Controller of Insurance (Currently a part from the Finance Ministry) should be made
independent

(4) INVESMENTS
● Mandatory Investments of LIC Life Fund in government securities to be reduced
from75% to 50%.
● GIC and its subsidiaries are not to hold more than 5% in any company (There current
holdings to be brought down to this level over a period of time).

(5) CUSTOMER SERVICE

● LIC should pay interest on delays on payments beyond 30 days.
● Insurance Companies must be encouraged to set up unit linked pension plans
● Computerization of operations and updating of technology to be carried out in the
insurance industry.

The committee emphasized that in order to improve the customer service and increase the
coverage of insurance industry should opened up to competition. But at the same time, the
committee felt the need to exercise caution as any failure on the part of new players could ruin
the public confidence in the industry. Hence, it was decided to allow competition in a limited
way by stipulating the minimum capital requirement of Rs. 100 crores. The committee felt the
need to provide greater autonomy to insurance companies in order to improve their
performance and enable them to act as independent companies with economic motives. For this
purpose, it had proposed setting up an independent regulatory body.

31
 Important Milestones in the history of Indian Insurance Industry
▪ 1993 Malhotra Committee established
▪ 1994 Recommendations of the Malhotra Committee published
▪ 1995 Mukherjee Committee established
▪ 1996 Setting up of (interim) Insurance Regulatory Authority (IRA) recommendations
of the IRA
▪ 1997 Mukherjee Committee Report submitted but not made public
▪ 1997 The government gives better autonomy to LIC, GIC, and its subsidiaries with
regard to the restructuring of boards and flexibility in investment norms aimed at
channeling funds to the infrastructure sector
▪ 1998 the cabinet decides to allow 40 percent foreign equity in private insurance
companies 26% to the foreign companies and 14% to Non Resident Indians (NRI’s)
and Foreign Institutional Investors (FII’s)
▪ 1999 The standing Committee headed by Murali Deora decides that the foreign equity
in private insurance should be limited to 26%. The IRA bill is renamed the insurance
regulatory & Development Authority Bill
▪ 1999 Cabinet clears the Insurance regulatory and Development Authority Bill
▪ 2000 President gives assent to the Insurance regulatory and Development Authority Bill

32
 LIBERALIZATION
OPENING UP OF INSURANCE SECTOR – 1999 THE INSURANCE
REGULATORY AND DEVELOPMENT AUTHORITY (IRDA)
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament
in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has
fastidiously stuck to its schedule of framing regulations and registering the private sector
insurance companies. The other decision taken simultaneously to provide the supporting
systems to the insurance sector and in particular the life insurance companies was the launch
of the IRDA's online service for issue and renewal of licenses to agents. The approval of
institutions for imparting training to agents has also ensured that the insurance companies
would have a trained workforce of insurance agents in place to sell their products, which are
expected to be introduced by early next year. Since being set up as an independent statutory
body the IRDA has put in a framework of globally compatible regulations. In the private sector
14 life insurance companies have been registered.

ENTRY OF PRIVATE COMPANIES

Under the IRDA Act, private companies can now operate in India's insurance industry.
However, they must obtain a license from the IRDA before being permitted to write business.
To have its license application considered, a domestic private company must be registered in
accordance with the Companies Act of 1956 and have approximately US$ 20 million of
investment capital. The specific licensing requirements that Private Indian Companies must
fulfill are set forth in the Registration on Indian Insurance Companies Regulations, published
by the IRDA 2000.

INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY (IRDA) 1999

The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous,

statutory body tasked with regulating and promoting the insurance and re- insurance industries
in India. It was constituted by the Insurance Regulatory and Development Authority Act, 1999,
an Act of Parliament passed by the Government of India. The agency's headquarters are in
Hyderabad, Telangana, where it moved from Delhi in 2001. IRDAI is a 10 member body
including the chairman, five full-time and four part-time members appointed by the
government of India.
33
HISTORY
In India insurance was mentioned in the writings of Manu (Manusmrithi), Yagnavalkya
(Dharmasastra) and Kautilya (Arthashastra), which examined the pooling of resources for
redistribution after fire, floods, epidemics and famine. The life-insurance business began
in1818 with the establishment of the Oriental Life Insurance Company in Calcutta; the
company failed in 1834. In 1829, Madras Equitable began conducting life-insurance business
in the Madras Presidency. The British Insurance Act was enacted in 1870, and Bombay Mutual
(1871), Oriental (1874) and Empire of India (1897) were founded in the Bombay Presidency.
The era was dominated by British companies.

In 1914, the government of India began publishing insurance-company returns. The Indian Life
Assurance Companies Act, 1912 was the first statute regulating life insurance. In 1928 the
Indian Insurance Companies Act was enacted to enable the government to collect statistical
information about life- and non-life-insurance business conducted in India by Indian and
foreign insurers, including provident insurance societies. In 1938 the legislation was
consolidated and amended by the Insurance Act, 1938, with comprehensive provisions to
control the activities of insurers.

The Insurance Amendment Act of 1950 abolished principal agencies, but the level of
competition was high and there were allegations of unfair trade practices. The Government of
India decided to nationalize the insurance industry.

An ordinance was issued on 19 January 1956, nationalizing the life-insurance sector, and the
Life Insurance Corporation was established that year. The LIC absorbed 154 Indian and 16
non- Indian insurers and 75 provident societies. The LIC had a monopoly until the late 1990s,
when the insurance industry was reopened to the private sector.

34
General insurance in India began during the Industrial Revolution in the West and the growth
of sea-faring commerce during the 17th century. It arrived as a legacy of British occupation,
with its roots in the 1850 establishment of the Triton Insurance Company in Calcutta. In 1907
the Indian Mercantile Insurance was established, the first company to underwrite all classes of
general insurance. In 1957 the General Insurance Council (a wing of the Insurance Association
of India) was formed, framing a code of conduct for fairness and sound business practice.

Eleven years later, the Insurance Act was amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee was established.

In 1972, with the passage of the General Insurance Business (Nationalization) Act, the
insurance industry was nationalized on 1 January 1973. One hundred seven insurers were
amalgamated and grouped into four companies: National Insurance Company, New India
Assurance Company, Oriental Insurance Company and United India Insurance Company. The
General Insurance Corporation of India was incorporated in 1971, effective on 1 January 1973.

The re-opening of the insurance sector began during the early 1990s. In 1993, the government
set up a committee chaired by former Reserve Bank of India governor R. N. Malhotra to
propose recommendations for insurance reform complementing those initiated in the financial
sector. The committee submitted its report in 1994, recommending that the private sector be
permitted to enter the insurance industry. Foreign companies should enter by floating Indian
companies, preferably as joint ventures with Indian partners.

Following the recommendations of the Malhotra Committee, in 1999 the Insurance Regulatory
and Development Authority (IRDA) were constituted to regulate and develop the insurance
industry and were incorporated in April 2000. Objectives of the IRDA include promoting
competition to enhance customer satisfaction with increased consumer choice and lower
premiums while ensuring the financial security of the insurance market.

35
The IRDA opened up the market in August 2000 with an invitation for registration applications;
foreign companies were allowed ownership up to 26 percent. The authority, with the power to
frame regulations under Section 114A of the Insurance Act, 1938, has framed regulations
ranging from company registrations to the protection of policyholder interests since 2000.

In December 2000, the subsidiaries of the General Insurance Corporation of India were
restructured as independent companies and the GIC was converted into a national re-insurer.
Parliament passed a bill de-linking the four subsidiaries from the GIC in July 2002. There are
28 general insurance companies, including the Export Credit Guarantee Corporation of
India and the Agriculture Insurance Corporation of India, and 24 life-insurance companies
operating in the country. With banking services, insurance services add about seven percent to
India’s GDP.

In 2013 the IRDAI attempted to raise the foreign direct investment (FDI) limit in the
insurance sector to 49 percent from its current 26 percent. The FDI limit in the sector was raised
to 100 percent according budget 2019.

STRUCTURE
Section 4 of the IRDAI Act 1999 specifies the authority's composition. It is a ten-member body
consisting of a chairman, five full-time and four part-time members appointed by the
government of India. At present (1 Sept, 2018), the authority is chaired by Dr. Subhash C.
Khuntia and its full- time members are Mrs. T. L. Alamelu, K. Ganesh, Pournima Gupte,
Praveen Kutumbe and Sujay Banarji.

36
FUNCTIONS
The functions of the IRDAI are defined in Section 14 of the IRDAI Act, 1999, and include:

Issuing, renewing, modifying, withdrawing, suspending or cancelling registrations

Protecting policyholder interests
Specifying qualifications, the code of conduct and training for intermediaries and agents
Specifying the code of conduct for surveyors and loss assessors
Promoting efficiency in the conduct of insurance businesses
Promoting and regulating professional organizations connected with the insurance and re-
insurance industry
Levying fees and other charges
Inspecting and investigating insurers, intermediaries and other relevant organizations
Regulating rates, advantages, terms and conditions which may be offered by insurers not
covered by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938
(4 of 1938)
Specifying how books should be kept
Regulating company investment of funds
Regulating a margin of solvency
Adjudicating disputes between insurers and intermediaries or insurance intermediaries
Supervising the Tariff Advisory Committee
Specifying the percentage of premium income to finance schemes for promoting and
regulating professional organizations
Specifying the percentage of life- and general-insurance business undertaken in the rural
or social sector
Specifying the form and the manner in which books of accounts shall be maintained, and
statement of accounts shall be rendered by insurers and other insurer intermediaries.

37
 INDIAN INSURANCE INDUSTRY: NEW AVENUES FOR GROWTH
2012:
Description: With an annual growth rate of 15-20% and the largest number of life insurance
policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian
insurance market (2004-05) was estimated at Rs. 450 billion (US$10billion). According to
government sources, the insurance and banking services contribution to the country's gross
domestic product (GDP) is 7% out of which the gross premium collection forms a significant
part. The funds available with the state-owned Life Insurance Corporation (LIC) for
investments are 8% of GDP. Till date, only 20% of the total insurable population of India is
covered under various life insurance schemes, the penetration rates of health and other non-life
insurances in India is also well below the international level. These facts indicate the of
immense growth potential of the insurance sector.

The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took
place with the ending of government monopoly and the passage of the Insurance Regulatory
and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and
allowing foreign players to enter the market with some limits on direct foreign ownership.
Though, the existing rule says that a foreign partner can hold 26%equity in an insurance
company, a proposal to increase this limit to 49% is pending with the government. Since
opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured
into the Indian market and 21 private companies have been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling
private insurance companies to sign up Indian customers faster than anyone expected. Indians,
who had always seen life insurance as a tax saving device, are now suddenly turning to the
private sector and snapping up the new innovative products on offer.

The life insurance industry in India grew by an impressive 36%, with premium income from
new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition
from private insurers. This report, Indian Insurance Industry: New Avenues for Growth 2012,
finds that the market share of the state behemoth, LIC, has clocked21.87% growth in business
at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough
to arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57
billion in 2004-05 from Rs. 24.29 billion in 2003-04. Though the total volume of LIC's business
increased in the last fiscal year (2004-2005) compared to the previous one, its market share
came down from 87.04 to78.07%. The 14 private insurers increased their market share from
about 13% to about22% in a year's time. The figures for the first two months of the fiscal year
2005-06 also speak of the growing share of the private insurers.
38
 INTRODUCTION TO LIC

Life Insurance Corporation of India (LIC) (Hindi: भारतीय जीवन बीमा ि नगम) is the largest
state-owned insurance group in India, and also the country's largest investor. It is fully owned
by the Government of India. It also funds close to 24.6% of the Indian Government's expenses.
It has assets estimated of 13.25 trillion (US$264.34 billion). It was founded in 1956 with the
merger of 243 insurance companies and provident societies.

Headquartered in Mumbai, 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 of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral
Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for soliciting life insurance business from
the public.

The slogan of LIC is "Yogakshemam Vahamyaham" - Your welfare is our responsibility. In

1955, parliamentarian Amol Barate raised the matter of insurance fraud by owners of private
insurance companies. In the ensuing investigations, one of India's wealthiest businessmen, Ram
Kishan Dalmia, owner of the Times of India newspaper, was sent to prison for two years.
Eventually, the Parliament of India passed the Life Insurance of India Act on 1956-06-19, and
the Life Insurance Corporation of India was created on 1956-09-01, by consolidating the life
insurance business of 245 private life insurers and other entities offering life insurance services.
Nationalization of the life insurance business in India was a result of the Industrial Policy
Resolution of 1956, which had created a policy framework for extending state control over at
least seventeen sectors of the economy, including the life insurance.

Over its existence of around 50 years, Life Insurance Corporation of India, which commanded
a monopoly of soliciting and selling life insurance in India, created huge surpluses, and
contributed around 7 % of India's GDP in 2006. The Corporation, which started its business
with around 300 offices, 5.7 million policies and a corpus of INR 459 million (US$ 92 million
as per the 1959 exchange rate of roughly Rs. 5 for a US $ , has grown to 25000 servicing around
350 million policies and a corpus of over 8 trillion (US$159.6 billion).

39
HISTORY
The Oriental Life Insurance Company, the first corporate entity in India offering life insurance
coverage, was established in Calcutta in 1818 by Bipin Behari Dasgupta and others. Europeans
in India were its primary target market, and it charged Indians heftier premiums. The Bombay
Mutual Life Assurance Society, formed in 1870, was the first native insurance provider.

Other insurance companies established in the pre-independence era included

▪ Bharat Insurance Company (1896)
▪ United India (1906)
▪ National Indian (1906)
▪ National Insurance (1906)
▪ Co-operative Assurance (1906)
▪ Hindustan Co-operatives (1907)
▪ Indian Mercantile
▪ General Assurance
▪ Swadeshi Life (later Bombay Life)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed, India's
First War of Independence, adverse effects of the World War I and World War II on the
economy of India, and in between them the period of worldwide economic crises triggered by
the Great depression. The first half of the 20th century also saw a heightened struggle for India's
independence. The aggregate effect of these events led to a high rate of bankruptcies and
liquidation of life insurance companies in India. This had adversely affected the faith of the
general public in the utility of obtaining life cover.

40
 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.

Promote amongst all agents and employees of the Corporation a sense of participation, pride
and job satisfaction through discharge of their duties with dedication towards achievement of
Corporate Objective.

41
 MISSION/VISION

Mission
"Ensure 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."

OPERATIONS

42
NATIONALISATION IN 1956
In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by owners of
private insurance agencies. In the ensuing investigations, one of India's wealthiest
businessmen, Ramkrishna Dalmia, owner of the Times of India newspaper, was sent to prison
for two years.

The Parliament of India passed the Life Insurance of India Act on 19 June 1956 creating the
Life Insurance Corporation of India, which started operating in September of that year. It
consolidated The business of 245 private life insurers and other entities offering life insurance
services; this consisted of 154 life insurance companies, 16 foreign companies and 75
provident companies. The nationalization of the life insurance business in India was a result
of the Industrial Policy Resolution of 1956, which had created a policy framework for
extending state control over at least 17 sectors of the economy, including life insurance.

43
 PRESENT SCENARIO

Life Insurance Industry Today

Currently, 24 life insurance companies and
29 non-life insurance companies in the
Indian market compete with each other on
price and service to attract customers. Out
of 24 life insurance companies,
Life Insurance
Corporation of India (LIC) is the sole
public sector company fully owned by
Government of
India. All the policies issued by LIC of India enjoys sovereign guarantee of Indian
Parliament. Life insurance industry in the country is expected grow 12-15 per cent annually
for the next three to five years. The country’s insurance market is expected to quadruple in
size over the next 10 years from its current size of US Dollar 60 billion. During this period
the life insurance market is slated to cross US Dollar 160 billion.
44
The general insurance business in India is currently at Rs. 78000 crore (US Dollar 11.7
billion) premiums per annum and is growing at a healthy rate of 17 percent.

India’s insurance market legs behind other economies in the baseline measure of insurance
penetration. At only 3.9 percent, India is well behind the 11.9 percent for Korea, 11.5 percent
for the UK 11.1 percent for Japan, 7.5 percent for the US. Indian insurance industry is expected
to grow to the US$ 280 billion by financial year 2020.

Government has approved the ordinance to increase Foreign Direct Investment (FDI) limit in
Insurance sector from 26 per cent to 49 per cent which would further help attract investments
in the sector. As per Union Budget 2019-20, 100 per cent foreign direct investment (FDI) will
be permitted for insurance intermediaries.

In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth US$ 903
million. Enrolments under the Pradhan Mantri Suraksha Bimas Yojana (PMSBY) reached
130.41 million in 2017-18. National Health Protection Scheme was announced under Budget
2018-19 as a part of Ayushman Bharat. The scheme will provide insurance cover of up to Rs
500,000 (US$ 7,723) to more than 100 million vulnerable families in India. Crop insurance
segment contributed
8.6 per cent to gross direct premiums of non-life insurance companies in FY20 (up to June 2019).

Overall insurance penetration in India reached 3.69 percent in 2017 from 2.71 percent in 2001.
In FY19 (up to Jan 2019), gross direct premiums of non-life insurers reached Rs. 1.39 trillion
(US$
19.28 billion), showing a year-on-year growth rate of 12.65 percent.

Market Size
Government's policy of insuring the uninsured has gradually pushed insurance penetration in
the country and proliferation of insurance schemes. Gross premiums written in India reached
Rs 5.53 trillion (US$ 94.48 billion) in FY18, with Rs 4.58 trillion (US$ 71.1 billion) from life
insurance and Rs 1.51 trillion (US$ 23.38 billion) from non-life insurance. Overall insurance
penetration (premiums as % of GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent
in 2001.

In FY19 (up to October 2018), premium from new life insurance business increased 3.66 per
cent year-on-year to Rs 1.09 trillion (US$ 15.46 billion). In FY19 (up to October 2018).

45
Investments and Recent developments in the sector:

The last few years have seen a lot of activity in the sector. This is a testament to the vibrancy
of the industry in India. Here are a few examples from different categories of deals/
developments:

Strategic deals: As of November 2018, HDFC Ergo is in advanced talks to acquire

Apollo Munich Health Insurance at a valuation of around Rs 2,600 crore (US$ 370.05
million).

Initiatives by non-sector players: In October 2018, Indian e-commerce major Flipkart

entered the insurance space in partnership with Bajaj Allianz to offer mobile insurance.

Financial investors: In August 2018, a consortium of West Bridge Capital, billionaire

investor Mr. Rakesh Jhunjunwala announced that it would acquire India’s largest health
insurer Star Health and Allied Insurance in a deal estimated at around US$ 1 billion.

New product offerings: In September 2018 HDFC ERGO launched a new product
called E@Secure: a cyber-insurance policy to protect individuals and families from
cyber-attacks.

The following are some of the major investments and developments in the Indian
insurance sector.

Insurance sector companies in India raised around Rs 434.3 billion (US$ 6.7 billion)
through public issues in 2017.
In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth
US$ 903 million.
India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture with
Ebix Inc. to build a robust insurance distribution network in the country through a new
distribution exchange platform.

LIC of India Acquires IDBI

LIC of India acquired 51% stake in IDBI Bank by investing Rs. 14500 crores. This deal was
the part of a bailout package for the sinking bank is expected to provide a win-win situation to
both the partners.
46
 Government initiatives / policies
The Government of India has taken a number of initiatives to boost the insurance industry.
Some of them are as follows:

1. Foreign Direct Investment (FDI) limit for the insurance sector increased from 26% to 49%.
2. Life insurance companies operational for 10+ years are now allowed to go public by IRDA
3. Government plans to divest a significant stake in PSU general insurance companies in order
to execute the steep disinvestment target
4. Several flagship schemes have been launched by the government to boost the insurance sector.
5. In September 2018, National Health Protection Scheme was launched under Ayushman
Bharat to provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million
vulnerable families. The scheme is expected to increase penetration of health insurance in India
from 34 per cent to 50 per cent.
6. IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds that
are issued by banks to augment their tier 1 capital, in order to expand the pool of eligible
investors for the banks.
7. The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue
redesigned initial public offering (IPO) guidelines for insurance companies in India, which are
to looking to divest equity through the IPO route.

Flagship schemes:
⮚ Pradhan Mantri Jan Suraksha Bima Yojana: This scheme focuses on providing
affordable insurance to people below the poverty line, in rural areas
⮚ Pradhan Mantri Jeevan Jyoti Bima Yojana: This initiative provides life insurance for
people employed in the unorganized sector
⮚ Atal Pension Yojana: This guarantees pension Coverage to all citizens in the
unorganized sector who join the National Pension System (NPS)

47
 ⮚ Ayushman Bharat Yojana: Each beneficiary family will receive medical insurance
cover of INR 5 lakh, which they can use to get treatment at public or private hospitals.

⮚ Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima Yojana
(PMFBY) in 2017-18.

Road Ahead
The future looks promising for the life insurance industry with several changes in regulatory
framework which will lead to further change in the way the industry conducts its business and
engages with its customers.

The overall insurance industry is expected to reach US$ 280 billion by 2020.

Life insurance industry in the country is expected grow by 12-15 per cent annually for the next
three to five years.

Demographic factors such as growing middle class, young insurable population and growing
awareness of the need for protection and retirement planning will support the growth of Indian
life insurance.

Exchange Rate Used: INR 1 = US$ 0.0159 as on March 31, 2019

References: Media Reports, Press Releases, Press Information Bureau, Union Budget 2017-
18, Insurance Regulatory and Development Authority of India (IRDA), Crisil

Disclaimer: This information has been collected through secondary research and IBEF is not
responsible for any errors in the same

48
PRODUCTS OFFERED BY LIC
LIC's Insurance Plans are policies that talk to you individually and give you the most suitable
options that can fit your requirement.

Endowment Plan
» LIC's Jeevan Pragati
» LIC's Jeevan Labh
» LIC's Single Premium Endowment Plan
» LIC's New Endowment Plan
» LIC's New Jeevan Anand
» LIC's Jeevan Rakshak
» LIC's Limited Premium Endowment Plan
» LIC's Jeevan Lakshya
» LIC's Aadhaar Shila
» LIC's Aadhaar Stambh

Whole Life Plans

» LICs Jeevan Umang

Money Back Plans

» LIC's Bima Shree Policy Document
» LIC's Jeevan Shiromani Policy Document
» LIC's NEW MONEY BACK PLAN - 20 YEARS
» LIC's NEW MONEY BACK PLAN - 25 YEARS
» LIC's NEW BIMA BACHAT
» LIC's NEW CHILDREN'S MONEY BACK PLAN
» LIC's Jeevan Tarun

Term Assurance Plans

» LIC's TECH TERM
» LIC's Jeevan Amar
» LIC's Anmol Jeevan II

49
RIDER
» LIC's Linked Accidental Death Benefit Rider
» LIC's Accidental Death and Disability Benefit Rider
» LIC's Accident Benefit Rider
» LIC’s New Critical Illness Benefit Rider
» LIC's NEW TERM ASSURANCE RIDER - (UIN: 512B210V01)

50
 LIC v/s Private Life Insurance Companies

In the first five months of the current financial year, first-year premiums of life insurance
companies grew by 39.84% (year-on-year) at Rs 1.05 lakh crore as compared to Rs 75,588.35
crore in April-August of 2018-19.

Life Insurance Corporation of India (LIC) continued to grow at a faster pace compared to
private insurance players, shows the data from the Insurance Regulatory and Development
Authority of India (IRDAI). Market participants say that, growth in insurance was largely due
to the surge in group non-single business and individual single premium business in the April-
August period.

The data from IRDAI shows that, private players saw first year premiums at Rs 28,480.43
crore in April-August, 2019 as against Rs 22,886.48 crore in the previous financial year, a
growth of 24.44%. First year premiums for LIC stood at Rs 77,220.97 crore in the first five
months of current financial year compared to Rs 52,701.86 crore in the previous financial year,
a surge of 46.52%. Even for the month of August, new business premiums for the life insurance
industry grew by 26.37% at Rs 23,554.94 crore compared to Rs 18,639.29 crore seen in August
last year.

Tarun Chugh, MD and CEO, Bajaj Allianz Life Insurance said, “Despite the market volatility,
we have had a positive swing in our growth numbers, and this not only reiterates our customers
trust in the brand, but is also reflective of how life insurance is now being viewed by them.
“It’s interesting to see that the industry has been able to make stable growth in these times, yet
again indicating that for long term life goals, life insurance is one of the strongest investments
to make, no matter how the markets are doing.”

First year premiums for Bajaj Allianz for the period of April-August stood at Rs 1,728.41 crore
as against Rs 1,433.23 crore in the previous financial year, indicating a growth of 20.60%.
Insurers like HDFC Life, ICICI Prudential Life Insurance, Kotak Mahindra Life Insurance,
Max Life, PNB Metlife, SBI Life and Tata AIA Life saw growth in their first year premiums.

In terms of segments, group single policies saw new business premiums for April-August
period at Rs 45,007.60 crore as against Rs 43,220.97 crore in the previous financial year, a
growth of 4.13%. While group non-single first year premiums stood at Rs 19,370.60 crore as
compared to Rs 432.94 crore in the last fiscal. Individual single premium and individual non-
single premium grew by 71.98% and 12.22% respectively in April-August period.

51
52
 Indian Life Insurance Industry Analysis – 2018-19

Growth of Life Insurance Industry 2018 V/s 2019

2018 2019 Growth %
Premium (Crores) 193866.24 214672.86 10.73%
Number of Policies 28198778 28687812 1.73%
Sum Assured (Crores) 3882171.65 4333541.41 11.63%

Life Insurance industry in India showed a growth of 10.73% in Total First Year Premium
collection compared to previous year. In the meantime, 1.73% was the growth shown in
Number of Policies (NOP) and 11.63% on Sum Assured underwritten in the corresponding
period.

The premium growth percent registered this year was marginally lower compared to the
previous year. Notably, the premium growth was 10.99% in 2018-19 against the current year
growth of 10.73%.

53
 Top 15 Life Insurance Companies in India-List & IRDA Ranking 2019

Here I am going to list out top ever life insurance companies in India. It’s very difficult to
choose the top rank company on these life insurance companies because every insurance
brand is good and their policies are beneficial for the policyholder. Here I am just suggesting
you top 20 best lists of Insurance companies. It’s always depending on you to choose the best
life insurance companies after doing proper market research to understand your budget and
goal.

1. LIC (Life Insurance Corporation of India)

Who doesn’t know LIC? Yes, everyone! This is one of the top class life insurance companies
ever in India. LIC has founded in 1st September 1956 with headquarters Mumbai. This is the
oldest insurance company in India. Shri V.K Sharma is the chairman of this firm and this

54
insurance company deals with several products like Life insurance, Investment management,
Mutual fund, Health Insurance and much more. LIC comes at the top position in terms of highly
growing insurance brand in India and most trusted one too.

Popular Plans
● LIC Jeevan Akshaya
● LIC E-term Plan
● LIC New Children’s plan
● LIC Jeevan Saral

2. ICICI Prudential Life Insurance

ICICI Prudential Life Insurance Company is one of the most preferred life insurance
companies in India. This company was founded on 12th December 2000 with headquarters in
Mumbai. This is a public type insurance company which offers amazing insurance plans. MR
N.S Kannan is the Chief executive officer and Managing Direct of this company. If you need
a good life insurance plan then you can definitely go with this company’s policy.

55
ICICI Prudential life Insurance Official website link

Popular Plans
● ICICI Pru Heart Cancer Protect
● ICICI Prudential Smart Health Cover
● ICICI Pru iProtect Smart
● ICICI Pru Life Raksha

3. Reliance Life Insurance

If you are looking for some outstanding life insurance plans then Reliance Life Insurance
Company is always the best choice for you. This is one of the best life insurance companies
which offer insurance products on retirement, investment, individuals as well as groups. Ashish
Vohra is the CEO of this life insurance company and the total asset of this company is almost
150 billion rupees.

Reliance life insurance official website

Popular Plans
● Reliance Protection plan
● Reliance term plan
● Unit-linked plan
● Reliance Retirement plan
● Reliance smart pension Plan

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4.Bajaj Allianz Life Insurance

Bajaj Allianz Life Insurance is one of the renowned life insurance companies in India which
deals with several classy insurance and investment products. This company was founded in the
year 2001 with headquarter Pune. Tarun Chugh is the current MD and CEO of this insurance
company. This is a joint venture between Allianz SE and Bajaj Finserv Limited. Now this
company has almost 759 branches all over India. You can get several beneficial products from
this insurance firm.

Bajaj Allianz Life Insurance official website

Popular Plans
● Young Assure Plan
● Save Assure Plan
● Life Long ASSURE Plan
● iSecure Loan plan
● Retire Rich

4. Birla Sun Life Insurance

57
Birla Sun Life Insurance is another popular and trusted life insurance company where you can
purchase your life insurance. This is a joint venture of Aditya Birla group and popular Sun Life

Financial INC. This is an insurance brand which has a high aim of providing world class
financial security to its customers and that’s the reason people love this insurance company.
Nowadays this company is dealing with several beneficial products like Group plans, rural
plans, Child plans, saving plans, protection plans and much more.

Birla Sun Life insurance official website

Popular Plans
● BSLI Protector plus plan
● BSLI Protector Ease
● BSLI Secure Plus Plan
● BSLI Vision Endowment Plan

58
5. SBI Life Insurance

SBI Life Insurance is a popular and trustworthy brand for people in India. This is a joint venture
of BNP Paribas and State bank of India. SBI holds almost 70.1% ownership and rest is in the
name of BNP Paribas which is a French multinational bank. This insurance company was
started in 2001 and at the initial stage this company was dealing from banc assurance but now
it has its own agency and it deals with several life insurance products.

SBI life insurance Official website

Popular Plans
● SBI LIFE-eShield
● SBI LIFE-smart money planner
● SBI LIFE-Smart Humsafar
● SBI LIFE-CSC Saral Sanchay

59
6. Max Life Insurance

Max Life Insurance which formerly known as Max New York Life Insurance Company
Limited is a reputed insurance company in India. In the year 2000, this company was entered
into the insurance business and started service in 2001. Analjit Singh is the chairman of Max
Life insurance who is also the founder of Max Health. This is a joint venture of Max Finance
service and Mitsui Sumitomo Insurance Company. Till now Max Life has more than 3000 life
insurance customer in India and it also provides several plans like child plans, Strategy plans,
Growth plans, Term Plans and much more.

Max life insurance official site

Popular Plans
● Max Life Online Term plan
● Max Life Premium Return Protection plan
● Max Life Super Term Plan
● Guaranteed Lifetime income plan
● Shiksha Plus Super

60
7.HDFC Standard Life Insurance

HDFC Standard Life Insurance is a highly reputed long-term life insurance provider of India.
Mumbai is the head quarter of this life insurance company. This is a life insurance firm with
the joint venture between HDFC and Standard life Aberdeen PLC. HDFC insurance company
deals with several products in which you will get Pension plans, protection, health plans,
investment plans, and savings plan.

HDFC standard life insurance official website

Popular Plans
● HDFC Standard Life Insurance Term Plan
● HDFC Endowment Plan
● HDFC Retirement Plan
● HDFC Life child Plan

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8.Tata AIA Life Insurance

Tata AIA life insurance is a joint venture of AIA group and Tata son’s ltd. According to a
recent record, this insurance company has almost INR 1397 crore premium business collections
for the year 2017-2018. The settlement ratio of this company is quite high than its competitor
which is almost 98%. This company always aims to provide hassle-free and smooth insurance
solutions with a better plan.

Tata AIA life insurance official website

Popular Plans
● Tata AIA Life Insurance iRaksha Supreme
● Tata AIA Life Insurance Maha Raksha Supreme
● Tata AIA Life Insurance iRaksha TROP

62
 8.ING Vysya Life Insurance (Renamed “Exide Life Insurance”)

Exide Life Insurance Company which formerly known as ING Vysya Life Insurance Company
is an Indian owned company. Exide Industries is the owner of this insurance company. It deals
its product via several channels like corporate agency, Bancassurance and direct channels. Till
the date, this insurance company has more than 15 lakh customers and almost INR 11,015
crores assets.

Exide life insurance company official website

Popular Plans
● Exide Life term insurance plan
● Exide life term smart term plan
● Exide life term rider
● Exide life secured income insurance regular pay

63
 9.PNB Metlife India Insurance Company

If you are looking for a leading life insurance company then you can go with PNB Metlife.
This is a life insurance company which was started its service since 2001. This insurance
company has three shareholders like Metlife international Holdings LLC, Punjab National
Bank and Jammu & Kashmir Bank limited. Ashish Kumar Srivastava is the CEO and Principal
Officer of PNB Met life India Insurance Company.

PNB met life insurance official website

Popular Plans
● PNB MetLife Mera heart and cancer care
● PNB Metlife Serious Illness rider
● PNB Metlife Mera Term Plan
● PNB Metlife Accidental Death benefit rider plus

64
10.Aviva India Life Insurance

Aviva India Life Insurance was started in the year 2002 July as a joint venture of two famous
groups one is Dabber and Aviva Plc. As per the record, Aviva India life insurance Company
consist of Dabur group has 51% of the stake and Aviva plc has 49% of stack partnership. This
is the first Insurance Company which introduced modern unitized with profit policies and Unit-
linked policies. It offers several attractive insurance plans to its customers and some of these
are given below.

Aviva India life insurance official website

Popular Plans
● Aviva i-term smart
● Aviva i-life Total
● Aviva Heart Care
● Aviva Extra Cover
● Aviva Health Secure
● Aviva i-shield

65
11.Bharti Axa Life Insurance Company Limited

Bharti Axa life Insurance company limited is a joint venture between two popular brands like
Bharati Enterprises and AXA group. These both groups are listed on top business groups in
India. This Insurance Company started its service in 2006 with its headquarter in Mumbai. Mr.
Sandeep Ghosh is the chief executive officer of Bharti AXA life insurance. You can get several
amazing and lucrative insurance offers from this company. Let’s know some of the best plans
for this insurance group.

Bharati AXA life insurance official website

Popular Plans
● Bharati AXA Samriddhi Plan
● Bharati AXA Life Elite Advantages Plan
● Bharati AXA Life Aajeevan Sampatti+Plan
● Bharati AXA Life secure Income plan

66
12.IDBI Federal Life Insurance

IDBI Federal life insurance was started in the year on 2006 and now it’s offering several
amazing insurance plans for its customers. This is an insurance company with the three-way
joint venture banks like IDBI Bank, Federal Bank, and Ageas. In December 2007, this
insurance company received the license from IRDAI and started its insurance service officially.
The head quarter of this insurance company is in Mumbai. Vighnesh Shahane is the all-time
director and CEO of this life insurance company.

IDBI federal life insurance official website

Popular Plans
● IDBI Federal Wealthsurance Growth Insurance Plan
● IDBI Federal Wealthsurance Growth Insurance Plan Single Premium
● IDBI Federal Life Insurance Wealth Gain Plan
● IDBI Federal Group Microsurance Plan
● IDBI Lifesurance Savings Plan

67
13.Canara HSBC OBC

Canara HSBC OBC is one of the reliable and famous life insurance companies ever. It was
launched in June 2008. This is an insurance company which is a joint venture of some reputed
and leading public sector banks like Oriental bank of commerce (23%), Canara Bank (51%)
and HSBC insurance holdings limited (26%). This insurance firm always focuses on fulfilling
the customers need and provides plans accordingly.

Canara HSBC OBC life insurance official website

Popular Plans
● iSelect Term Plan
● iInvestshied Plan
● Smart Junior Plan
● Smart Suraksha Plan
● Jeevan Nivesh Plan
● Samridh Bhavishya

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14.DHLF Pramerica

When it comes to top 20 life insurance companies in India you can’t neglect DHLF Pramerica.
This is one of the fastest growing life insurance companies in India and it’s headquarter is in
Gurgaon. This company was founded in 1984 by Shri Rajesh Kumar Wadhawan. DHLF is a
joint venture of Dewan Housing Finance Corporation Ltd and Prudential International
Insurance Holdings, Ltd.

DHLF Pramerica life insurance official website

Popular Plans
● DHFL Pramerica family fast
● DHFL Pramerica family income
● DHFL Pramerica True Shield
● DHFL Pramerica U Protect
● DHFL Pramerica life cancer + heart shield

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14.AEGON Life

If you need the best insurance plan for you then AEGON Life Insurance Company is always a
better option for you. In 2008, AEGON Life has founded with headquarters in busy city
Mumbai. AEGON Life insurance company was known as AEGON Religare Life Insurance

Company. This insurance company is a joint venture of The Times Group and Dutch AEGON
N.V firm. It offers Term life insurance, health insurance, savings, and other investment plans.

AEGON Life insurance official website

Popular Plans
● iTerm insurances Plans
● iReturn Insurance Plan
● Future Protection Insurance Plan
● Rising Star Insurance Plan
● Jeevan Shanti Insurance Plan

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15.India First

“India First” is a popular joint venture life insurance company in India. This is a joint venture
between two Indian public sector banks like Andhra Bank, Bank of Baroda and one UK’S firm
which is legal & general. The share percentages between these three are like 30%, 44%, and
26% respectively. In November 2009, India First bank was incorporated and Mumbai
headquarters of this life insurance company. Ms. R.M, Vishakha is the MD& CEO of this
famous insurance brand. India first Life Insurance sells various products like insurance plans,
life insurance, group policies, and investment funds.

India First life insurance official website

Popular plans
● Insurance Khata
● India first guaranteed retirement plan
● Indian First Any time plan
● India First Happy India Plan
● India First Life Little

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 IRDA ranking of Insurance companies in India
Many people have the wrong conception that IRDA (Insurance Regulatory and Development
Authority of India) provides Rank to the insurance companies but the reality is, IRDA never
ranks any insurance companies in India. It always gives equal value to every insurance
company.

Final words
Above given 20 best insurance companies in India lists are the best if you are looking for the
best life insurance plan for your better future. If you are going to choose the right policy, you
need to understand your aim and budget. Study all the policies of different firms and go for the
best according to your judgment. Hope you guys get good knowledge on top 20 life insurance
companies in India.

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SWOT ANALYSIS OF LIC OF INDIA

Life Insurance Corporation of India or LIC as it is popularly known as a government-owned

insurance and Investment Company. With headquarters in Mumbai, LIC is credited with being
the largest insurance provider in India with the value of an approximate asset to the tune of 240
billion USD. The total life fund of LIC is estimated at143 billion USD and the company still
continue to sell policies worth millions yearly.

Following the acceptance of the Life Insurance of India Act in 1965 the government of India
decided to float their own company for Life Insurance which resulted in the formation of LIC
of India. This move also resulted in the nationalization of the insurance sector in India, prior to
when it was a bunch of private companies. More than 240 private insurance companies and
provident societies merged to form the Life Insurance Corporation.

Strength:
Strengths are defined as what each business does best in its gamut of operations which can
give it an upper hand over its competitors. The following are the strengths of LIC are:

India’s largest Insurance service provider: LIC currently has pan India operations
with 2048 fully computerized branch offices, 8 zonal offices, around 113 divisional
offices, 2,048 branches and 1381 satellite offices and corporate offices. The entire
country is classified under 54 customer zones and 25 metro-area service hubs based
across various cities and towns of India. Currently, LIC has 1,337,064individual agents,
242 Corporate Agents, 89 Referral Agents, 98 Brokers and 42 Banks for selling life
insurance to the general public.
73
Brand Image: LIC has a strong branding in India. Its tagline Yogakshemam
Mahamyaham which means welfare for all is well recognized. The Economic Time
Brand Equity Survey of the year 2015 voted LIC as the most trusted Insurance provider
in India.
Fund Base: LIC has a huge found base of around 150 billion USD and is also India’s
biggest investor making it immensely powerful in the domain of finance in India.

A network of Agents: LIC has around 1,337,064 individual agents, 242 Corporate
Agents, 89 Referral Agents, 98 Brokers and 42 Banks across India who cover each nook
and corner of the country.

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 Weakness

Weaknesses are used to refer to areas where the business or the brand needs improvement.
Some of the key weaknesses of LIC are:

Culture: LIC has been strongly associated with the government and thus follows a very
slack and slow paced work culture. This works as a weakness when compared to modern-
day private insurance players who are adept at strategy.
Poor advertisement strategy: In comparison to its private counterparts LIC does not
spend too much on advertisement and this shows in the quality of ads that they release.
Too many restrictions: The Company has a lot of restriction imposed on it being a
government entity and there are always red tape challenges. This makes decision making
slow at LIC.
Labour overheads: LIC has a huge employee’s strength and most of them work from
their own setups. Paying their salaries and managing theme is often a huge challenge for
the company.

Opportunities

Opportunities refer to those avenues in the environment that surrounds the business on which
it can capitalize to increase its returns. Some of the opportunities include:

Cyber security: There are many cases of information threats and breaches in security
systems. Thus at an age where cyber security is a threat Insurance policies against this
can prove to be a huge opportunity.
Online Services: As online services grown people have started looking more into
options like insurance and the awareness levels are also higher than the earlier days. This
presents an opportunity for providers like LIC which are labor intensive to cut down
costs by replacing people with technology.
Shift from protection to prevention: There is a general shift of trend from protection
to prevention which is a pointer for insurance companies who should now be focusing
on risk prevention than risk mitigation policies.
More disposable income: Insurance today is seen not as a protection but also as a form
of investment. By capitalizing on this new approach insurance companies can design
new products.

75
Threats

Threats are those factors in the environment which can be detrimental to the growth of the
business. Some of the threats include:

Competition: With privatization of insurance LIC has lost its older glory and today faces
stiff competition from private insurance players who have brought in more glamour into
the industry.
Change of governments: With every new government the fiscal and monetary policies
change with the result that policies need to be reworked accordingly. This creates a lot
of hassles.
Technology: Today most financial services make technology an integral; part of their
business through online banking and financial broking services online. However, LIC
still has a lot to achieve in terms of staying abreast with technology.

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 HYPOTHESIS

NULL HYPOTHESIS
Customers of LIC of India of Mumbai district have negative perception towards the products
offered by the L.I.C.

ALTERNATE HYPOTHESIS
Customers of LIC of India of Mumbai district have positive perception towards the products
offered by the L.I.C.

OBJECTIVES OF THE STUDIES

To study the perception of customer towards products offered by LIC of India.
To find out the important criteria that people think about before investing in a life
insurance policy.
To find out whether gender bias involved in investing life insurance or not.
To find out the awareness of Life insurance Corporation among the people

SCOPE OF THE STUDY

The result of this research would help the company to have a better understanding about
the consumer’s perception towards life insurance products offered by LIC of India.
The study helps the LIC of India to focus the consumer’s preferences and expectations on
the product which they offer.

77
 LIMITATIONS OF THE STUDY

The following limitations can be pointed out from the research

The sample size chosen for the questionnaire was only 200 and that may not represent
the true picture of the consumer perception about the Life Insurance sector.
The research got confined to the city of Mumbai district only. The respondent belonged
only to Mumbai city and not others who were out of Mumbai city.
The selection of people for the questionnaire will be done on the basis of convenient
random sampling, so, there were certain cases in which the people selected did not have
any life insurance policy, so they could not give any positive feedback regarding the
important criteria to be considered before taking a life insurance policy.
The product offered by different companies had different options and names in them,
so at the time of comparison it will become very difficult. The parameters for
comparison will also different in the selected companies.
Resource Constraint

Time Constraint

78
CHAPTER - 3 REVIEW OF LITERATURE

The state sponsored Life Insurance Corporation (hereinafter referred to as LIC) of India was
the Sole player in the Indian life insurance market before 2000. With the entry of private
players, LIC has lost considerable market share to private players although both market size
and Insurance premia, are on the rise. In India life insurance products were/are bought more as
Investments for tax savings rather than risk protection. The brand preference in this category
has never been explored in depth. It has been largely assumed that life insurance is an unsought
product and customer satisfaction a ‘paradox’. The proposition that has been examined is that
Customer satisfaction can provide business opportunities in this under penetrated market. It
can be a vehicle for identifying new avenues for cross selling, up selling and referrals. It also
attempts to identify the dimensions of service quality which are important to a customer.
SERVQUAL scale was used to discern the different dimensions of service quality and mean
Scores were used to find out if there is any gap between customer expectations and perceptions.

Retaining a customer is four times cheaper than acquiring a new one. The retention of the
customers is of utmost importance in the insurance industry in specification. Insurance business
is of the relationship building process. Were one customer leads to the building of other one.
A satisfied customer is like a word of mouth advertisement for the company. The needs of the
existing customers should be identified and satisfied well rather than only concentrating at the
new accounts. All possible measures needs to take to retain the customers as it is lesser costlier
as well as provides stability to the business. It wasn’t too long back when the good old
endowment plan was the preferred way to insure oneself against an eventuality and to set aside
some savings to meet one’s financial objectives. The traditional endowment policies were
investing funds mainly in fixed interest.

Government securities and other safe investments to ensure the safety of capital. Thus the
traditional emphasis was always on security of capital rather than yield. However, with the
inflationary trend witnessed all over the world, it was observed that savings through life
insurance were becoming unattractive and not meeting the aspirations of the policyholders. The
policyholder found that the sum assured guaranteed on maturity had really depreciated in real
value because of the depreciation in the value of money. The investor was no longer content
with the so called security of capital provided under a policy of life insurance and started
showing a preference for higher rate of return on his investments as also for capital
appreciation. It was, therefore found necessary for the insurance companies to think of a
79
method whereby the expectation of the policyholders could be satisfied. The object was to
provide a hedge against the inflation through a contract of insurance. Decline of assured return
endowment plans and opening of the insurance sector saw the advent of ULIPs on the domestic
insurance horizon. Today, the Indian life insurance market is riding high on the unit linked
insurance plans.

At national as at individual level the excess of income after consumption level savings as funds
for investment. Surplus funds can be invested in either real asset or in financial assets. Purpose
of investment is to protect one’s wealth against erosion of value due to inflation and to earn
risk adjusted return. There are three motives which drive people to purchase insurance products
in India. _ Desire to cover risk _ Tax benefit _ Saving motives It is argued that in this paper
that in the changing scenario for the insurance sector there is going to be a good opportunities
for insurance sector to expand its market base. For this purpose there is need to improve the
features of the insurance products to make them more liquid or short term schemes could be
increased. It is shown that although rewards implied by the insurance products particularly by
the tax benefits are quite close to those observed in banks and small saving scheme of the
governments. The performance of mutual funds which come in many different types is found
to be reasonable compared to the risk involved. The survey indicates that it may not be very
difficult to win over the confidence of small investors towards insurance policies if good
marketing techniques are adopted to educate the targeted population about the uses of insurance
policies from investment point of view.

Insurance is one product which is not demanded by a customer, but supplied to him by massive
education and drive marketing. Insurance ought to be bought not sold. The new concept of
demand side innovation focuses more on customer’s social and economic reality striving to
deliver maximum value to the customer at an affordable price. Therefore, when the customer
becomes the primary focus including him in the invention process becomes mandatory. But,
there are certain areas of insurance innovations where the customers cannot be involved. A
case in point is the recent insurance product invention called Telemetric Auto Insurance. It’s a
product by the Progressive Auto Insurance, which monitors the driving behavior of its auto
insurance policyholder. The new machine grabs information and automatically transmits it to
the insurer. This information received is regularly analyzed to judicially conclude the intensity
of risk the person is exposed and the corresponding premium he is eligible to pay. This is an
example of supply side innovation, where it is strictly not possible to include the customer in
the innovation process. Though, there are instances where the customer is involved in the
testing phase, his inclusion in the conception phase makes an innovation demand-driven.

80
 REVIEW OF LITERATURE:
This chapter presents the review of literature to identify and understand the implications of
different issues related to consumer perception and satisfaction towards public and private life
insurances companies in India. The literature on life insurance industry in India includes books,
compendia, theses, dissertations, study reports and articles published by academicians and
researchers in different periodicals. The review of this literature gives an idea to concentrate
on the unexplored area and to make the present study more distinct from other studies. The
literature available is presented below:

1. Baal N. and Sandhog H. S. (August 2011), a study on Life Insurance Corporation of India
(LIC) the capital demanding business, supplies the most important financial instruments to
customers directed at safety as well as long term savings. The present study by examines the
parts affecting agent’s perception towards Life Insurance Corporation of India. Moreover,
analysis of one way arrangement has also been performed to test the important results to show
that no important differences exist among various groups of respondent regarding to their
apprehension towards Life Insurance Corporation of India.

2. Baal N. and Sandhog H. S. et al (August 2011), with the access of so many players in the
field and the consistent competitive activism, the choate area of the service sector is observing
a multi- dimensional, purposeful, consumer-friendly approach, shedding off the apathy that had
come to be affiliated with the sector. The findings of the study imply that the gap scores do not
amalgamate into five dimensions of service quality rather, than the perception scores merge
into three dimensions.

3. Meera C. and Eswari M. (November 2011), in modern aggressive environment services

are ameliorate accumulating more denotation. Nowadays, greater absorption is paid to all the
bank customer touch points, address to optimize the reciprocal and user friendly services. The
aim of the study by is to crumb the customers bliss towards cross selling of insurance products
and other services accomplished by private sector banks.

4. Singh H. and Loll M (December 2011), states that life insurance is one of the fastest
growing and emerging markets in India. Insurance diffusion in rural area – the insurance
industry has an acceptation grant in socio-economic development. Objective of the present
study is to appraise the opportunities for insurers in the rural market and what would be new
action to tap the highly underinsured rural area.

81
5. Friar F. and Khanbashi M. et al (December 2011), this study is one of the most conscious
actions taken in alluring and gratifying needs of customers is chattering a charismatic
information mechanism and feedback process between organization and customers. The aim
of this study by, is finding of the variation between anticipation of the employees and customers
towards service quality in insurance industry of Iran. The study revealed that there is cogent
difference between the anticipation of staff and customers towards the tangibles dimension
while the anticipation of both the groups towards the other dimensions is homogenous.

6. Sharma M. and Vijay T. S. et al (January 2012), the animus of this study is to assay the
brunt of demographic factors on the level of satiety of investor’s contra insurance policies. The
study entraps the impact of demographics factors on the satisfaction of investors towards
insurance policies. This paper also evaluates cogent relationship between demographic factors
and overall satisfaction of the customers towards the insurance policies.

7. Gautam V and Kumar M (March 2012), the present research is an effort, to allegorize the
attitudes of Indian consumers towards the insurance services. The study has been made by
accumulating the antiphon of consumers through structured questionnaire on five point Liker
scale. The decree of the present study may act as an important aspect for the insurance
companies in Indian market to flounce marketing strategies established on socio demographic
and economic factors.

8. Ansari Z. A. (March 2012) in the present study examines the attitude of individuals towards
different kinds of risks and scope they prefer in Saudi Arabia. The study by further examine
how the use of insurance particularly the binding insurance has altered the perception towards
risks and their future behavior towards buying other insurance policies and also what features
the users of insurance suggest in their insurance policy contract. The study is based on primary
data collected aimlessly from current users of binding insurance policies that is motor insurance
and health insurance and life insurance.

9. Srivastava A. and Tripathi S. et al (April 2012) is a study on insurance industry bequeaths

to the financial sector of an economy and also renders the paramount social covenant in
developing countries. Hence, the study on Indian life insurance industry and their changing
trends concluded that though the sector is rapidly growing, the industry has not yet insured
even 50% of insurable population of India. To achieve this objective, this sector requires more
improvement in the insurance density and insurance penetration.

82
10.Bodla B. S. and Chaudhary K. (May 2012), present study by, looks for to determine the
expected and anticipated service quality level along with gaps on the origin of service quality
model by Suresh Chandar et al (2001) in one of the superior private sector company, ICICIPLI
– ICICI Prudential Life Insurance Company. Though altogether private sector has importantly
apprehended the market share at first but now days and most of the private sector companies
are assaying for customary expansion in business and market share and the picked company is
one of them.

11.Gaikwad A. S. and Vibhute S.G. (August 2013), a study about Indian insurance industry
is in an unsettled situation. This study by, will ease the insurance companies to know the
opinions of customers concerning insurance industry and particularly opinions towards
traditional and ULIP plan. Along with this, the company and advisors would empathy the
accurate demand of samples, the limit of customer satisfaction. Factors customer acknowledge
while choosing the policy and opinions on advisors advocacy by which company and advisors
can draft their sales program, sales speech, local strategies and the like.

12.Kathirvel N. and Radhamani S. (September 2013), study on the insurance industry forms
an essential part of the Indian financial market, with insurance companies being cogent with
institutional investors. The study by, conclude the study as an attempt to calculate the various
parameters as perspective by the policy holders and to provide assistance to the insurance
company in serving its policy holders in a much better and smooth way.

13.Mahajan K. (November 2013), study about India after liberalization, has been advancing
the culture of investment in financial works; which has uncloaked up huge change for insurance
firms to capture these opportunities the insurance firms have come up with cautious marketing
plans, so that, it helps them to accomplish their objectives at one end and assist the Indian
customer to travel from unknown to known product zone.

14.Damtew K. and Pagidimarri V. (December 2013), different policy holders by are basic
for insurers for their life and wealth in today’s opposing business environment .Customers can
purchase various and more policies from the same provider and restore their agreements before
end date if they have belief on their relevant providers. This reverie aims to analyze the role of
trust in building customer faithfulness in the insurance sector. In order to earn this aim, non-
experimental reverie was made for this reverie and to evoke policy holder’s perception,
systematic questionnaires were designed and then research is made and outcomes .

83
15.Ali L. and Chatley P. (2013), Bancassurance as an aqueduct of selling insurance has fast
ameliorated impulse in the Indian insurance scene. Hence conveying that future of
bancassurance can be bright in India too if the aggravating ascend companies can channelize
their achievements cogently is for corporate image taking the place by size of operations and
customer satisfaction and adeptness in sales process.

16.Prakash N. and Sugumaran G. (January 2014), in their research work stated that India
which has a behemoth population abominable and are not tapped by life insurance market,
which in turn concocted an favorable circumstances for the Indian and foreign nationals to
entrust in this market. For the customers of the private sector, the apical mean value to egress
the customer’s needs and wants.

17.Choudhari P. S. (January 2014), study indicates that the age of information technology,
customers are not only fully alert of their needs and requirements, expectations and information

technology enabled services but also conserve day to day communication with the different
kinds of service provider in their life for their own interest and getting their services in various
ways. In this paper the researcher tried to find out whether there exist any cogent service quality
gap in between insurer’s perception of customers service expectation and customers’
expectations of quality of services provided by the LIC of India in Burdwan district.

18.Thirupathi T. (January 2014), Life Insurance Corporation of India (LIC) is the largest
insurance group and investment company in India. They prefer private insurance sectors
because they provide them the banking facility and a lot of value added services so it will be
beneficial both to common public and the LIC if it offers banking facility to the policy holders
and the common public. The study revealed that the policy holders have bought out the
expectations of the policyholders and their preferences. It has also offered suggestions that can
be implemented for the benefit of the common public and the government.

19.Mehta D. and Tripathi A. (February 2014), in his study has stated that insurance sector
in India is sprouting at a very swift stride. With the entrant of new and more and more private
sector the feuding within the industry is becoming very fierce. Thus, today to survive in the
market the very vital element for any company is to take notice of the customer’s satisfaction
to maintain, cherish and attract their potential clients.

84
20.Ahmed A. and Kwatra N. (March 2014), this papers aims at judging the quality of
insurance services in India through customer’s determination and how this can be used to
increase the demand for insurance which is at present low in India. The study by revealed
among other things that the total number of death claim settled by an insurance company is the
most important factor considered by the customers of insurance companies in India in their
judgment and calculation of quality of the policies they are holding. The study therefore advises
that the culture of deferment in premium payment or non-payment should be gridlocked and
organizations should look in going to see the acumen why the payment of premium is a
difficulty.

21.Janjua P. Z. and Akmal M. (March 2014), Islamic finance and insurance are in
international market particularly after world economic since 2008. This study by is a study to
ascertain customer’s satisfaction for the services of common and Islamic insurance companies
in Pakistan. The findings advices a cogent betterment in the service quality of common and
Islamic insurance industry specifically, the common insurance companies require to pay extra
heed on young people, private employees and lower income groups, whereas the Islamic
insurance companies have to put more efforts to better Shariah compliance and to allure self –
employed and higher income groups.

22.Bapat H. B. and Soni V. et al (April 2014), reverie states the requirement for insurance
is as old as commerce and trading that exists in the world. Uncertainty is built in to life,
commerce, trading etc. where insurance will provide protection to it. The reverie finds out
their present levels of the products offering on the basis of Servqual scope. This reverie
provides sagacity to the practicing administrator to recognize the gap in take influence by
aims the expected quality product.
23.Bhowal A. and Pankaj B. (April 2014), Life insurance industry is in growing juncture and
daily new developments are going on in regards to products and services. Given the empirical
research methods and specially contriving scaling technique, the study resulted that the
difference between the degree of customer cost conventional from the insurance and the degree
of the customer cost experienced is statistically not cogent.

85
24.Choudhari P. S. (April 2014), due to the aftermath of the various elements of the
globalization, customers socio-economic culture has heretofore been changed and human
interactions are now cogently being recouped by the interactions of human – technology where
in service sector, the information technology is playing the role in supplying quality of services
to the customers in order to amuse the customers in the present competitive market. In this
study, devout observation was taken place about the propitiating impact of the information
technology on the anticipated service quality and customer satisfaction link in life insurance
services.

25.Ch. S. (May 2014), study reflects that presently more than 40% of the businesses of the
insurance companies are done through the bancassurance medium. The finding of the study
reveals that the insurance company can actualize almost all the benefits of bancassurance
through selling their product by using the database of banks and their branch aperture. In India
70 percent of the population are not under the inclusion of insurance distinctively in rural areas.

26.Barik B. and Patra R. (June 2014), in his study stated that the Indian life insurance sector
is amplifying at an accelerate rate. The study revealed that life insurance business in India needs
a special care as compared to other business, both theory and practice to be integrated to provide
the best services to the policy holders. Hence, this study by the researchers has been done with
an intention to help with suggestion and recommendation that will help both academician and
industry personnel to re-engineer their thought in insurance sector.

27.Chand M. (June 2014) studies the main change of life insurance industry in India is the
gapping up to private and global players. The study will reveal the aspect of private insurance
players in the areas and like number of policies glided, amount of premium money collected,
agent or broker commission expenses, and operating expenses from 2001 -2012.

28.Prasad K. and Sravanthi V. (October 2014), insurance industry is an expand-acclimatized

industry. In India, the industry has commenced to disclose the promising after liberalization
and privatization of the sector. The insurance industry study by has achieved cogently in India’s
growth story in past few years. These two are often used to determine the level of growth of
the insurance sector in a country.

86
29.Dash B. and Mohanty B et al (November 2014), this research reverie by is focused on
effect of customer relationship management fashion on insurance sector in Odisha market. In
this reverie customer’s belief have been gathered through a structured questionnaire to
comprehend the effectiveness of CRM implementation in association with the companies like
Aviva, LIC of India, ICICI Prudential, Birla Sun Life and Reliance.

30.Satya K. K.V. R. and Radha B. et al (December 2014), the study done by has an objective
to study osmosis and enlargement of insurance industry. The sector was widened homogenous
enlargement after liberalization but during last four years, contraction in business sales or
earnings is recorded. In 2005, private sector has opened many offices and LIC opened many in
numbers during 2009.

87
 CHAPTER - 4
RESEARCH DESIGN AND METHODOLOGY

Methodology is a systematic way of solving a problem. It includes the research methods for
solving the problem.

Type of research
Descriptive cum Exploratory research

Data source
Primary and Secondary data

Data collection tools

Questionnaires

DATA SOURCE
The task of data collection begins after a research problem has been defined. In this study
data will be collected through both primary and secondary data source.

● PRIMARY DATA
A primary data is a data, which is collected for gathering information first time and to
analyze the problem. In this study the primary data was collected among the consumers using
questionnaire.

● SECONDARY DATA
Secondary data consist of information that already exists somewhere, having been
collected for some other purpose. In this study secondary data was collected from company
websites, magazines and brochures.

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 CHAPTER - 5
DATA ANALYSIS AND INTERPRETATION

The collected data was analyzed by using pie-charts and the analysis of the collected data is
given bellow. Data analysis helps us to determine whether our hypothesis is accepted or not.
And it is also useful to determine whether all our objectives are fulfilling or not. Data analysis
helps us to draw a conclusion or a result to our research problem. Overall Analysis of Online
payment application on the basis of survey Total Respondents: 100 respondents.

Statement No of No. Of
Countt Percentage
%
Male 46 46
Female 54 54
INTERPRETATION

The above diagram is a Pie-chart. A pie-chart is a statistical graphic which is divided into pieces that
demonstrate the proportion of our data.
A pie-chart is used to demonstrate the data collected by the respondents. The above question is the
gender of the respondents and the two options are Male and Female.
Total Male respondents are 46 Total Female respondents are 54 in count.
Total male respondents are 46% of the whole number of respondents and total female respondents are
54 % out of 100%.
This shows that that are more female respondents as compared to male respondents in our study.

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 Statement No. of percentage %
YES 68%
NO 32%

INTERPRETATION

From the above information 68or 68% of respondents are satisfied, 32 or 32% of respondents are not satisfied.

Statement No of Count No. of Percentage %

less than 5 year 50 50
2-5 year 26 26
10-15 year 24 24

INTERPRETATION

From the above information 50 or 50% of respondents are less than 5 years .
26 or 26% of respondents are 2-5 year.
24 or 24% of respondents are 10-15 year.

90
 Statement No. of percentage %
YES 73%
NO 27%

INTERPRETATION

From the above information 73 or 73% of respondents are satisfied, 27 or 27% of respondents are not satisfied.

Statement No of Response No Of percentage

Excellent 23 23
Good 60 60
Poor 1 1
Average 16 16

INTERPRETATION

From the above information 23 or 23% of respondents are in Excellent.

60 or 60 % of respondents are in Good
1 or 1% of respondents are in poor
16 or 16%of respondents are in Average.
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 Statement No of Count No. of Percentage %
less than a month 40 40
1-2 month 37 37
2-3 month 23 23

INTERPRETATION

From the above information 40 or 40% of respondents are less than a month .
37 or 37% of respondents are 1-2 month
23 or 23% of respondents are 2-3 month.

Statement No. of percentage %

YES 66%
NO 34%

INTERPRETATION
From the above information 66 or 66% of respondents are satisfied, 34or 34% of respondents are not satisfied.
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 Statement No of Response No Of percentage
Excellent 27 27
Good 45 45
Poor 7 7
Average 21 21

INTERPRETATION

From the above information 27or 27% of respondents are in Excellent.

45 or 45 % of respondents are in Good
7 or 7% of respondents are in poor
21 or 21 %of respondents are in Average.

Statement No. of percentage %

YES 75%
NO 25%

INTERPRETATION

From the above information 75 or 75% of respondents are satisfied, 25 or 25% of respondents are not satisfied.

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 Statement No of Response No Of percentage
Very Satisfied 31 31
Neutral 54 54
Somewhat satisfied 13 13
Very dissatisfied 2 2

INTERPRETATION

From the above information 31 or 31% of respondents are in Very Satisfied.

54 or 54 % of respondents are in Neutral.
13 or 13% of respondents are in Somewhat Satisfied.
2 or 2 %of respondents are in Very Dissatisfied.

Statement No. of percentage %

YES 74%
NO 26%

INTERPRETATION

From the above information 74 or 74% of respondents are satisfied, 26or 26% of respondents are not satisfied.

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 CHAPTER - 6
FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS
The findings that can be drawn from the survey conducted by us can be summarized in the way
Bank Deposits are the most preferred investment alternative which is available to people
followed by alternatives such as Insurance, Real Estate, Gold and Silver, Mutual etc. The
scheme mostly preferred by insurance holders was life protection schemes like death benefits
followed by money growth plans like wealth creation and high return plans. It was found that
nearly 50% of the respondents usually save less than 15% and the kind of investment mostly
preferred by the respondents were both long and short term. According to the survey safety is
the most important criterion which is accepted among all the respondents towards their
investment alternatives followed by Return, Brand Name, Tax Benefits, Liquidity and Capital
Growth. According to the study company image is to be the highly important criteria, which
we consider before taking up a life insurance this is mainly because people expect safety and
security for their money which they invest, followed by the factor Premium which we pay to
the insurer and then Bonus and Interest paid by the company, services etc.

It is clear that the majority i.e. more than half of investor’s investing in insurance are the young
people in the age group of 20-40. It can be said that males dominate in having life insurance
policies. The majority of people having life insurance are employed. The most preferred plan
among the investor’s is unit linked plans because of its high returns. Almost 80% of the policies
sold has the periodicity of 5-25 years. It is very much clear that the awareness level of the
customers of LIC is much higher. A greater number of customers of LIC are either fully or
partially satisfied but there is not much significant difference across sectors in terms of service
quality satisfaction level. Employees or agents of LIC are easily accessible and customers were
happy with the ethics, knowledge provided by them and helpful gestures they offer them as
when required. Most of the respondents of LIC feel that formalities for opening a policy are
not complex and do not take much time to start with and Two fifth of the customers of LIC are
fully satisfied with its grievance redress mechanism. It is an opportunity for LIC that more than
four fifth of the customers of LIC feel that there is no delay in claim settlement also a large
number of customers of LIC feel that their agent provides them with the correct and relevant
information and it is evident that individual risk coverage is the most preferred criteria among
the investors sectors, Hence the rationale behind investment is more or less same. Last it was
95
clearly a mandate given to LIC that 88% of the respondents have got positive perception
towards LIC and if they again go for the new policy, they will stuck to LIC of India only as
after investing with them they feel that their money is safe, secure and they don’t have to run
here and there for the claim settlements.

We see that due to excellent service quality and attractive offers private insurance companies
have started getting a number of customers. They are growing rapidly. Though, LIC is also
increasing its customer base but private insurance companies are moving at a fast pace. Though
the income

of private insurance companies is negligible when compared with LIC but then also the pace
with which they are increasing their income is tremendous. LIC is certainly having a large
customer base. Market share for LIC in the last financial year has increased 6% from financial
year 2010- 2011, at that time it was 72% and now it is 78%.
LIC is much ahead of private insurance companies in this field. They are undoubted champions
in insurance when it comes to profit earning. New business is increasingly going towards
private insurance companies but still the customer base of LIC is very strong. In issuing new
policies per branch also, they are ahead of private insurance companies though not by very
large margin. Customer base of LIC is very strong and still business per branch, profit per
branch or premium per branch, they are leading much ahead of private insurance companies.

The findings that can be drawn from the survey conducted by me can be summarized in the
way Bank Deposits are the most preferred investment alternative which is available to people
followed by alternatives such as Insurance, Real Estate, Gold and Silver, Mutual etc. The
scheme mostly preferred by insurance holders was life protection schemes like death benefits
followed by money growth plans like wealth creation and high return plans. It was found that
nearly 50% of the respondents usually save less than 15% and the kind of investment mostly
preferred by the respondents were both long and short term. According to the survey safety is
the most important criterion which is accepted among all the respondents towards their
investment alternatives followed by Return, Brand Name, Tax Benefits, Liquidity and Capital
Growth. According to the study company image is to be the highly important criteria, which
we consider before taking up a life insurance this is mainly because people expect safety and
security for their money which they invest, followed by the factor Premium which we pay to
the insurer and then Bonus and Interest paid by the company, services etc.

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 SUGGESTIONS
1. To increase the level of insurance penetration LIC may focus on bringing products that
suit to the rural customers.
2. The company if possible should invest in advertising, conduct road shows, and spend
money on hoardings, so that it can better propagate awareness about its various lesser
known products.
3. LIC should also tie up with several other banks apart from the existing ones to sell its
products i.e. through banc assurance
4. The company has the option of tying up with local NGO’s for selling its rural insurance
products.
5. Customer friendly documentationi.e.it should be made easier and faster.
6. LIC should keep a check that its agents equally promote all its products.
7. LIC may provide additional funds to its development officers and agents.
8. All the hidden charges should clearly be stated in the form and explained by the agent
and LIC should provide better training to its agents.
9. Claim settlement process should be made fast and must not involve lengthy decision
making process.
10. Some special focus should be laid on individual risk coverage while designing the products.
11. People becoming more aware and demanding so there is scope for a whole lot of
innovative products.
12. To sell insurance products through electronic Medias.
13. The lack of comprehensive social security system combined with a willingness to save
means that Indian people demand for pension products will be large. Thus, it has
become an opportunity for the life insurance industry.
14. Easy accesses to development in the more advance market provide further opportunity
to upgrade their working. Technological, financial or specific area based avenues of
absorbing improved system are also now more easily available. So, that insurance
companies working efficiently and fast service.

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 CONCLUSIONS

Insurance is a tool by which fatalities of a small number are compensated out of funds collected
from plenteous. Insurance is a safeguard against uncertain events that may occur in the future.
Company image is the highly important criteria that consumers consider before taking up a life
insurance. This is mainly because people expect safety and secure for their money which they
invest, followed by the factor Premium which we pay to the insurer and then Bonus and Interest
paid by the company, services etc.

LIC dominates the Indian insurance industry. In today’s competitive world, customer
satisfaction has become an important aspect to retain the customers, not only to grow but also
to serve. Increased competition, wide range of product offerings and multiple distribution
channels cause companies to value satisfied and highly profitable customers. Customer service
is the critical success factor in a company and providing top notch customer service
differentiates great customer service from indifferent customer service.

The entry of private sector insurance companies into the Indian insurance sector triggered off
a series of changes in the industry. Even with the stiff competition in the market place, it is
evident from the study that products offered by the LIC are creative, innovative and of the
liking of the customers, moreover they are satisfied by the true knowledge provided by the
company or agents and they are easily accessible, Flexible payment schemes with no hidden
cost, there is no undue delay in claims settlement, customers are highly satisfied by the
grievance redressal mechanism, and in the near future if they will go for the policy they will
stuck to LIC of India, which shows the great faith and positive perception of the customers
towards LIC of India.

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 QUESTIONNAIRE

A Study on Perception of Investors Investing in Life Insurance (With Special Reference to

Mumbai city)

Dear respondent,

This questionnaire is aimed at understanding your perception about Life Insurance Corporation
of

India .Your response will be dealt with strict confidentiality and it will be used only for
academic

purpose. Thank you for spending your valuable time to fill this questionnaire.

Name:

Gender Male Female

Occupation
• Employed
• Student
• House wife
• Self employed
• Retried

1.Have you ever purchased a LIC policy?

• Yes
• No

2. How much years have you been holding the policy ?

Less than 5 year

• 2 - 5 year
• 10 - 15 year

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3. Have you or any of your family member filled a claim with LIC in the past ?
• Yes
• No

4. If you answered yes to question 3 please rate your experience with the claim settlement process
• Excellent
• Good
• Poor
• Average

5. How long did it take for you or family member to receive the claim settlement amount after the claim with
LIC ?
• Less than a month
• 1-2 month
• 2 -3 month

6. Do you think LIC claim settlement process is transparent

• Yes
• No

7. How much you rate LIC over all claim settlement process?
• Excellent
• Poor
• Good
• Average
8. Have you recommended LIC to anyone based on their claim settlement process
• Yes
• No

9. How satisfied are you with the claim settlement ratio of lic .
• Very satisfied
• Neutral
• Somewhat satisfied
• Very dissatisfied

100
10. Have you ever checked the claim settlement ratio of LIC before purchasing policy
• Yes
• No

101