MINOR PROJECT REPORT SUBMITTED TOWARDS THE PARTIAL FULFILMENT

OF

BACHELOR OF BUSINESS ADMINISTRATION

MINOR PROJECT REPORT

ON

Marketing strategies of private life

insurance companies
Batch: 2021-2024

Submitted By: PROJECT GUIDE

Name of student: Rahul sharma Name: Dr. Yoginder Kataria

Enrollment No: 3524001721 Designation: Assistant professor

Trinity Institute of Professional Studies

Affiliated To Guru Gobind Singh Indraprastha University, New Delhi
 CERTIFICATE
TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project work “Marketing strategies of private life insurance
companies” made by: Rahul Sharma, BBA, SEC.A, Enrollment no. 3524001721 is an
authentic work carried out by him under the guidance and supervision of Dr. Yoginder
Kataria.

The project report submitted has been found satisfactory for the partial fulfilment of the
degree of Bachelor of Business Administration.

Project Supervisor

Signature

Name
 ACKNOWLEDGEMENT

It is in particular that I am acknowledging my sincere feeling towards my mentors

who graciously gave me their time and expertise.

They have provided me with the valuable guidance, sustained efforts and friendly
approach. It would have been difficult to achieve the results in such a short span of time
without their help.

I deem it my duty to record my gratitude towards the Project supervisor Dr. Yoginder
Kataria who devoted his/her precious time to interact, guide and gave me the right
approach to accomplish the task and also helped me to enhance my knowledge and
understanding of the project.

Signature:

Name of Student: Rahul Sharma

Enroll. No: 3524001721

Course: BBA

Shift/Sem/Sec: 2nd shift, 2nd semester, sec- A

 DECLARATION
I hereby declare that the following documented Project report titled “Minor Project” is
an original and authentic work done by me for the partial fulfilment of Bachelors of
Business Administration degree program.

I hereby certify that all the Endeavour put in the fulfilment of the task are genuine and
original to the best of my knowledge & I have not submitted it earlier elsewhere.

Signature:
Name of Student: Rahul Sharma
Course: BBA
Class & Shift: Sec A, shift 2
Enrolment No.: 3524001721
 Table of Content

S. Particulars Page No.

NO

1. Chapter-1 (Introduction & Literature Review)

6-7
➢ Introduction (Topic)

➢ History (Topic) 8-9

(Theoretical concept about the topic such as Importance, Functions,

Types Roles) etc.

2. Chapter-2 (Research Objectives & Methodology)

Research Objective of the study
➢ 9
Research Methodology
➢ Research Design
Types of research design 10
➢
Data Collection
Sources of data collection (Primary & Secondary)
➢

3. Chapter-3 (Data Processing, Analysis & Interpretation)

Data processing
➢ 24-30
Analysis of the problem under study
➢ Interpretation of the result

4. Findings 31-32

5. Limitations 33-35

6. Suggestions & Recommendations 36-37

7. Conclusion 38

8. Bibliography 39

9. Annexure
 INTRODUCTION
Life insurance (or life assurance, especially in the Commonwealth of Nations)
is a contract between an insurance policy holder and an insurer or assurer,
where the insurer promises to pay a designated beneficiary a sum of money
upon the death of an insured person (often the policy holder). Depending on the
contract, other events such as terminal illness or critical illness can also trigger
payment. The policy holder typically pays a premium, either regularly or as one
lump sum. The benefits may include other expenses, such as funeral expenses.
Life policies are legal contracts and the terms of each contract describe the
limitations of the insured events. Often, specific exclusions written into the
contract limit the liability of the insurer; common examples include claims
relating to suicide, fraud, war, riot, and civil commotion. Difficulties may arise
where an event is not clearly defined, for example: the insured knowingly
incurred a risk by consenting to an experimental medical procedure or by taking
medication resulting in injury or death.
Modern life insurance bears some similarity to the asset-management industry,
and life insurers have diversified their product offerings into retirement
products such as annuities.
Life-based contracts tend to fall into two major categories:
● Protection policies: designed to provide a benefit, typically a
lump-sum payment, in the event of a specified occurrence. A common
form—more common in years past of a protection-policy design is
term insurance.
● Investment policies: the main objective of these policies is to facilitate
the growth of capital by regular or single premiums. Common forms
(in the United States) are whole life, universal life, and variable life
policies.
 A life insurance policy is essentially a contract between an individual and an
insurance provider, where the company promises to pay a specified amount of
money to the family or beneficiary of the individual, in return for regular
payments over a period of time. These payments are known as premium and are
usually paid on an annual basis. The individual who buys the insurance is
known as the policy holder.
Life insurance assures lump sum amount to be paid to the family if the
policyholder passes away unexpectedly. Though money cannot make up the
loss, it ensures no financial hiccups to the family even after the demise of the
breadwinner.
The life insurance policy provides with the much-needed cover against risk and
offers you opportunities to grow your savings It is also an effective tool that
enables you to save for future expenses that may occur, such as the higher
education or marriage of children.
Life insurance has meaning especially for those with minor children, children
with special needs, those who wish to secure the financial future of their family
or wish to build savings over the long term.
It is best to buy a policy early, since the premium amount rises with age and if
the individual is a smoker or has pre-existing medical conditions
 HISTORY
Insurance in this current form has its history dating back to 1818 , when
Oriental Life Insurance Company was started by Anita Bhavsar in Kolkata to
cater to the needs of European community. The pre-independence era in India
saw discrimination between the lives of foreigners (English) and Indians with
higher premiums being charged for the latter. In 1870, Bombay Mutual Life
Assurance Society became the first Indian insurer.
At the dawn of the twentieth century, many insurance companies were founded.
In the year 1912, the Life Insurance Companies Act and the Provident Fund Act
were passed to regulate the insurance business. 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. However, the
disparity still existed as discrimination between Indian and foreign companies.
The oldest existing insurance company in India is the National Insurance
Company, which was founded in 1906, and is still in business.
The Government of India issued an Ordinance on 19 January 1956 nationalising
the Life Insurance sector and Life Insurance Corporation came into existence in
the same year. The Life Insurance Corporation (LIC) absorbed 154 Indian, 16
non-Indian insurers and also 75 provident societies—245 Indian and foreign
insurers in all. In 1972 with the General Insurance Business (Nationalisation)
Act was passed by the Indian Parliament, and consequently, General Insurance
business was nationalised with effect from 1 January 1973. 107 insurers were
amalgamated and grouped into four companies, namely National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance
Company Ltd and the United India Insurance Company Ltd. The General
Insurance Corporation of India was incorporated as a company in 22 November
1972 as a private company under Companies Act, 1956 in Bombay and
received its Certificate for Commencement of Business on 1 January 1973.
The LIC had monopoly till the late 90s when the Insurance sector was reopened
to the private sector. But, now there are 23 private life insurance companies in
India. Before that, the industry consisted of only two state insurers: Life
Insurers (Life Insurance Corporation of India, LIC) and General Insurers
(General Insurance Corporation of India, GIC). GIC had four subsidiary
companies. With effect from December 2000, these subsidiaries have been
de-linked from the parent company and were set up as independent insurance
companies: Oriental Insurance Company Limited, New India Assurance
Company Limited, National Insurance Company Limited and United India
Insurance Company.
 REVIEW OF LITERATURE

The potential for the expansion of the Indian Insurance market is massive
and there is a huge untapped market to be conquered. There exist 24 Life
Insurance companies in India. Among them, the Life Insurance Corporation
(LIC) is the sole Public sector and the rest of the 23 are Private sector life
insurance companies. The penetration reached 3.42 per cent in FY 2016 and
will cross 4 in FY 2017 as compared to 6.2 per cent of global average.The
Government has increased the coverage from 30 to 40 per cent under
PradhanMantriFasalBima Yojna .

The perceived service quality of the insurance companies has positive

correlation on International Journal of Pure and Applied Mathematics
Volume 119 No. 7 2018, 1217-1224 ISSN: 1311-8080 (printed version);
ISSN: 1314-3395 (on-line version) url: http://www.ijpam.eu Special Issue
ijpam.eu 1217 attitude towards obtaining insurance.

The company and agent’s service quality have significant impact on

purchasing life insurance products.

The individual death claims settled by the private sector insurance

companies are 91.48% in FY 2015-2016 as compared to 94.65% in group
death claims. The number of offices in private sector is 6179 as on 2016
which is higher compared to LIC which stands at 4892.

The exploratory qualitative study revealed the emergence of technology. The

overall customer satisfaction consists of three perceptions – satisfaction with
functional services, satisfaction with agents and satisfaction with company.
 Assurance in terms of trained agents, competence factor, tangibles, corporate
image and technology are the key parameters in deciding the private sector
companies.
IMPORTANCE OF LIFE INSURANCE:

1. Secure your family's financial future

Life insurance is all about securing you and your family financially. All parents
want their children to be taken care of even when they are not around. Life
insurance makes sure your loved ones won't suffer financially in your absence.
There is no way to replace a loved one, But planning with life insurance does
help in taking care of the financial needs of the family's.

2. Accomplish your financial goals

We all have some goals in life, for which money needs to be saved. Life
insurance plans help you achieve those goals by helping you build a financial
corpus with the protection of a life cover. Life insurance plans inculcate a habit
of disciplined saving. Paying a little amount as an insurance premium each
month will help you accumulate funds. What's even better is that this small
monthly amount only keeps growing. So years from now, you'll have enough
wealth accumulated to accomplish your more substantial and long-term
financial goals.

3. Brings peace of mind

Having life insurance will give you peace of mind. Life is uncertain, and life
insurance can offer financial assistance to your family when you are no longer
around. You can also plan your retirement by taking a retirement plan where
you will receive a monthly income.
4. Save tax
Generally, you can claim an income tax deduction on your life insurance
premiums under Section 80C of the Income Tax Act, 1961**.Pay-outs for death
claims are tax-free under Section 10(10D) of the Income Tax Act, 1961**.
SOME PRIVATE LIFE INSURANCE COMPANIES:

# Company Sector Headquarter Founded

s

1 Life Insurance Corporation of India Govt. Mumbai 1956

2 HDFC Standard Life Insurance Co. Ltd. Private Mumbai 2000

3 Max Life Insurance Co. Ltd. Private Delhi 2000

4 ICICI Prudential Life Insurance Co. Ltd. Private Mumbai 2000

5 Kotak Mahindra Life Insurance Co. Ltd. Private Mumbai 2001

6 Aditya Birla Sun Life Insurance Co. Ltd. Private Mumbai 2000

7 TATA AIG Life Insurance Co. Ltd. Private Mumbai 2001

8 SBI Life Insurance Co. Ltd. Private Mumbai 2001

9 Exide Life Insurance Co. Ltd. Private Bangalore 2001

10 Bajaj Allianz Life Insurance Co. Ltd. Private Pune 2001

11 PNB MetLife India Insurance Co. Ltd. Private Mumbai 2001

12 Reliance Nippon Life Insurance Private Mumbai 2001

Company
13 Aviva Life Insurance Company India Ltd. Private Gurugram 2002

14 Sahara India Life Insurance Co. Ltd. Private Lucknow 2004

15 Shriram Life Insurance Co. Ltd. Private Hyderabad 2005

16 Bharti AXA Life Insurance Co. Ltd. Private Mumbai 2008

17 Future Generali India Life Insurance Co. Private Mumbai 2007

Ltd.

18 IDBI Federal Life Insurance Co. Ltd. Private Mumbai 2008

19 Canara HSBC Oriental Bank of Private Gurugram 2008

Commerce Life Insurance Co. Ltd.

20 Aegon Life Insurance Co. Ltd. Private Mumbai 2008

21 Pramerica Life Insurance Co. Ltd. Private Mumbai 2008

22 Star Union Dai-Ichi Life Insurance Co. Private Mumbai 2008

Ltd.

23 IndiaFirst Life Insurance Co. Ltd. Private Mumbai 2009

24 Edelweiss Tokio Life Insurance Co. Ltd. Private Mumbai 2011

MARKETING STRATEGIES OF PRIVATE LIFE
INSURANCE COMPANIES:

1. Go Grassroots in the Community

Most agencies seek to capture the market close to the office. It's easier to build
relationships with customers when you can meet with them. There are a lot of
ways to become known and visible within the community that surrounds your
insurance agency.
Look at broad marketing strategies such as billboards, bus benches and grocery
store advertising as a way to get your agency name and your image out in the
world. This develops general credibility but really, it's a shotgun approach.
More active approaches to marketing will build community goodwill and have
a more targeted approach to drive the leads in. Visit local high schools to speak
to students about the dangers of drunk or distracted driving. Hold workshops
that discuss the benefits of life insurance at a local church. Get a booth at the
local chamber of commerce event.

2. Piggyback Off the Brand

Big brands such as Allstate, Farmers and State Farm spend a tremendous
amount of their annual budgets on marketing. If you have an agency with one
of these companies, you know the limitations of being a captive agent. But
there are advantages to the marketing funnels these big brands pump money
into, and you can piggyback off these funnels.
Allstate agents can host local community cleanups that partner with the city
council, using the Allstate tagline, "You're in good hands." Farmers' agents can
hold regular insurance and financial workshops, bringing Farmers University
directly to consumers. State Farm agents can have fun with, "Jake from State
Farm," an agent who's wearing khakis and the signature red shirt in the office
and to all community events.
3. Build a Referral Network
A referral network is one of the best ways insurance agencies grow the
business. Strategic partners for insurance agencies include real estate agents,
mortgage lenders, estate planning attorneys and even other insurance agents. If
your agency specializes in a specific type of insurance – for example, worker's
compensation – many other agencies are instead focused on auto and home
insurance, and they can refer business clients to you.
When it comes to building strategic partners, plan it out and be consistent. Take
a box of donuts to a mortgage lender's office once a week with a stack of your
cards and a note thanking them for thinking of you. Offer to sit in open houses
with real estate agents. Add value and partners will emerge to provide you with
solid referrals.

4. Spend Ad Money In Local Social Media

Social media ads allow the insurance agency owner to target specific clients. It
also gets them in front of Millennials in ways other traditional advertising
might not. Use the tools social media provides to set demographics for certain
products. For example, target young families with small children for life
insurance prospects.
RESEARCH OBJECTIVES
&
METHODOLOGY
OBJECTIVES OF THE STUDY:

1. To identify the underlying dimensions of Perception of Marketing Strategies

followed by Private Life Insurance Companies.

2. To know the different marketing styles and management used by the private
life insurance companies these days.

3. To analyse the financial reports and companies performance in the past few
years.

4. To find out no. of policies being sold to the general public and what kinds of
policies are being sold the most.

5. To examine the market share in premium of the selected companies.

RESEARCH METHODOLOGY:

The intention of this study is to examine the perception of marketing strategies

followed by private sector life insurance companies. Secondary data was
collected.through different websites online and reliable books. Four private life
insurance companies (ICICI prudential, HDFC life , SBI life, BAJAJ Allianz)
were selected for the study. Few scales like financial reports, Market share in
premium, value of new business (VNB), claim settlement ratio, growth or loss
of company in the past few years etc. were taken under consideration while
preparing the report.
The four selected private life insurance
companies:

HDFC: HDFC Life Insurance Company Ltd. is a long-term life insurance

provider with its headquarters in Mumbai, offering individual and group
insurance services and incorporated on 14 August 2000.
ICICI: ICICI Prudential Life Insurance Company Limited is a life insurance
company in India. Established as a joint venture between ICICI Bank Limited
and Prudential Corporation Holdings Limited, ICICI Prudential Life is engaged
in life insurance and asset management business.

SBI: SBI Life is an Indian life insurance company which was started as a
joint venture between State Bank of India and French financial institution BNP
Paribas Cardif. SBI has a 55.50% stake in the company and BNP Paribas Cardif
owns a 0.22% stake.
BAJAJ ALLIANZ: Bajaj Allianz Life is one of the leading private
life insurance companies in India. The company is a partnership between two
powerful and successful entities in their own right Bajaj Finserv Limited, one of
India’s most diversified non-banking financial institution and Allianz SE,one of
world’s leading asset manager and insurer.
DATA PROCESSING, ANALYSIS
&
INTERPRETATION
PRIVATE COMPANIES MARKET SHARE
HDFC Life and SBI Life hold the
highest market share in premium after
LIC
CLAIM SETTLEMENT RATIO OF HDFC LIFE
INSURANCE
CLAIM SETTLEMENT RATIO OF ICICI
PRUDENTIAL
CLAIM SETTLEMENT RATIO OF SBI LIFE
CLAIM SETTLEMENT RATIO OF BAJAJ ALLIANZ
 RESEARCH FINDINGS

In the graph of “private companies market share” it is shown that private

players' market share has been rising in an efficient manner. The data shown in
the figure is of the past 14 years of the values of market share of private life
insurance companies while comparing it to LIC.

The market share of private players in FY 2008-2009 was 57%, FY 2009-2010

was 52%, FY 2010-2011 was 46%, FY 2011-12 was 37%, FY 2012-13 was
38%, FY 2013-14 was 38%, FY 49%, FY 2016-17 was 54%, FY 2017-18 was
56%, FY 2018-19 was 58%, FY 2019-2020 was 57%,
FY 2020-2021 was 60%, FY 2021-2022 is 63%.

HDFC Life and SBI hold the highest market share in premium after LIC as
shown in the figure on page no. 20, the data collected was of the financial year
2021. Private life insurance companies such as HDFC Standard, ICICI
prudential, SBI life, Bajaj Allianz, Max Life also the LIC which isn’t private
but has been used to compare the market share in premium.

The market share in premium of LIC in FY 2021 was 65.95%, HDFC Standard
had 7.58%, ICICI Prudential had 4.94%, SBI Life had 7.31%, Bajaj Allianz and
MAX life were holding market share of 2.4%.

The data collected in claim settlement ratio is secondary. Claim settlement ratio
of HDFC Life insurance was 97.27 %in FY 2017-18, 99.31% in FY 2018-19,
99.07% in FY 2019-20, 98.01% in FY 2020-21.

ICICI prudential’s claim settlement ratio in the FY 2017-18 was 97.88, FY

2018-19 was 98.58%, FY 2019-20 was 97.84% and FY 2020-21 was 97.9%.
Claim settlement ratio of SBI Life in FY 2018-19 was 99.29%, FY 2019-20
was 94.52%, FY 2020-21 was 93.05%.

Whereas Bajaj Allianz had 95.01% in the FY 2018-19, 98.02% in FY 2019-20,

98.48% in FY 2020-21.
Disadvantages of Life Insurance
The following are the main life insurance disadvantages:

High premium for aged people: This is the major disadvantage of life
insurance policy. The higher the age the higher would the premium to be
paid in the life insurance. This is due to the simple fact that the risk
increases with the age so is the premium. So, it is advisable to take life
insurance at a very early age to prevent yourself from paying high
premiums. There is a chance where the insurance companies have
rejected or denied providing policy to old age people having ailments.

● Difficult to calculate the returns: The returns on the life insurance

policies are quite complicated and it is highly difficult to predict the
returns. The returns from life insurance are purely based on market
conditions and performance. So a particular figure is difficult to arrive at
in the case of life insurance unlike PPF and other fixed deposit schemes.

● Complex Policies: In India, many insurance companies offer different

types of life insurance plans. You can choose the best life insurance plan
as per your requirement. But it can also create confusion in the minds of
the customer because different insurance policies have different features.
Some policies are simple, and some are not so simple. It can be daunting
to choose the right life insurance policy.
● Insurance Companies May Not Pay the Benefits: The insurance
companies use various tricks to avoid paying the benefits even after the
maturity of the policy and also they have denied paying the sum assured
or the death benefit to the policyholder or the nominee. They would
mention many hidden charges or clauses to reduce the pay-out. So, it is
important to carefully understand the details of the policy and choose a
company that has a positive pay-out rate. Things to know about the merits
and demerits of life insurance and the importance of having life insurance
it is advisable to talk to our agents before entering a contract.

● Awareness of Exclusions, Hidden clauses: Any financial product

available in the market certainly has some exclusions and hidden clauses
incorporated into it. It is your responsibility to find out those clauses and
choose the right life insurance policy. For example, most of the policies
don’t pay for suicide in the first year and almost all the policies exclude
loss of life due to drugs overdose or involvement in criminal activities.

● The cash value component is a weak investment vehicle: The cash

value component of whole life insurance is a great way to force yourself
to save money for retirement while providing life insurance coverage in
the event that you pass away. But the rate of return is lower on average
than simply investing the money in a Roth IRA, and the fees involved in
redeeming the cash make it less than ideal.

Unless you’ve already maxed out your other investments, you’ll probably
come out ahead financially if you just stick to term life insurance and
invest your extra cash in a traditional retirement account or increase your
401(k) contributions.
● It’s easy to be misled if you’re not well-informed: There are a lot
of questions when it comes to life insurance: When can you redeem
the cash value? What happens if you die but the life insurance
company contests the circumstances around your death? Will you
pay more if you smoked a single joint at your cousin’s barbecue last
summer? Are there companies that charge less than others for the
same risk factor?

There are a few things about life insurance that aren’t

straightforward, and you could easily be sold a policy by a
less-than-scrupulous life insurance agent for more coverage than
you need. Do your research beforehand and work with an insurance
broker like Policygenius before signing on the dotted line.
Policygenius agents don’t earn commission on policies they sell to
ensure you get the amount of coverage you need with an insurer
that will offer you the lowest prices.
 SUGGESTIONS

1. The private insurance company should cater more to the middle class people
since they are in large numbers. The insurance company should create
awareness for the above people.

2. The policy holders give high priority to augmented product than the actual
and core product. Therefore, the private insurance companies should focus
more on augmented products like value added services, customer redressal,
support from staffs and agents etc.,

3. The unmarried policy holders have higher expectations on the perception of

marketing strategies than the married policy holders. Therefore, the
expectations of the former should be met with.

4. Vigilant technology up gradation should be available to the policyholders at

all times. This will considerably reduce the hurdles of the policyholder in all
aspects including flexible payment, mode of payment and settlement of claims.
 Recommendation

(a) Pricing in Insurance Policy The results of the study concluded lack of
clarity about the pricing scheme of insurance policies. Based on that it is
recommended that insurance companies should designed and communicate the
pricing policies in its simplest form. Any complexity in the pricing should be
communicated to the concerned subscriber.

(b) Distribution Channel As it is observed from the results of the study that
subscribers are less informed about the Distribution Channel. It is
recommended that channel information should be communicated to the
subscriber in a proper way. This will help the companies in retaining the
existing customer and attracting the newer one.

(C) Promotional Strategies Insurance companies should come up with more

effective and result oriented promotional strategies. As it is observed from the
study that subscribers are not properly informed and they lack the
understanding of the benefits emerging from promotional strategies.

(d) Customer Satisfaction As we know that customer satisfaction is a key

driver of organizational success, Bajaj Allianz should properly frame their
marketing strategy to insure customer satisfaction.
 CONCLUSION

The insurance sector is growing rapidly in India and has created robust growth
in mitigating risk. The Private sector insurance companies after LIC have
facilitated the individuals and the companies tremendously. The awareness
about insurance is geometrically progressing in the middle class group.
Therefore, the insurance companies both public and private should seize the
opportunities and should aid the commerce in the near future.

The Finding of the study helps in identifying the most effective promotional
strategies of life insurance companies, which at the end leads to customer
satisfaction. For this purpose a comparison is drawn between a public sector
insurance company (LIC) and private life insurance companies. This can be
concluded from the study that product awareness is almost same in the
subscribers of LIC and other private players. However, price awareness varies
between subscribers of LIC and private companies. When the awareness about
the distribution channel of the company is explored, their exist no difference
between LIC and other private subscribers. The same is true for promotional
strategies and customer satisfaction. However, there are various factors
influencing purchase decision which are different for LIC and private
subscribers. The same is true for motive behind purchase, where subscribes
show a substantial difference in their purchase decision.

The finding of the study will help of the insurance companies to focus on areas
which will help them improving delivery and gaining customer satisfaction.
 BIBLIOGRAPHY

LIC. (2011). Professional Life Insurance Marketing, Life Insurance Today, Vol.
VII.

Agarwala, A. N. (1961). Life Insurance in India: A Historical and Analytical

Study.

Marketing of Life Insurance Services, Print Well Publishers, Jaipur.

Official websites of the private life insurance companies taken for study i.e.,
HDFC life, SBI life, ICICI prudential, Bajaj Allianz.

Other different websites to collect the secondary data required for the report.