; Comparative Analysis of Ulips
Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out
Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

Comparative Analysis of Ulips

VIEWS: 36 PAGES: 81

  • pg 1
									                      A REPORT ON

 “A Comparative Study and Analysis of Unit Linked
Insurance Plans (ULIPs)-An IDBI FORTIS Perspective”




                         BY
                   C. JOHN WILLIAMS
                    (08BSHYD0323)



           IDBI FORTIS LIFE INSURANCE COMPANY




            Submitted to: Prof.S.Subramanian

            Date of Submission: 16th May 2009
AUTHORISATION

This report “A Comparative Analysis of Unit Linked Insurance Plans (ULIPs) – An IDBI FORTIS
Perspective” done during my Summer Internship Program (SIP) is submitted as a partial
fulfillment of the requirement of MBA program of ICFAI Business School (IBS), Hyderabad.

                                                                               16th May 2009

                                                                           C.JOHN WILLIAMS




              ICFAI BUSINESS SCHOOL-HYDERABAD                                    Page 2
ACKNOWLEDGEMENTS

I would like to express my sincere gratitude to my company guide Ms.Shanthi Yagyanath,
Agency Manager -IDBI Fortis Life Insurance Company, Coimbatore for guiding me throughout
my summer internship and research project. Her encouragement, time and effort are greatly
appreciated.

 I would then like to thank my faculty guide, Prof. S Subramanian, for all his valuable inputs and
constant support towards me throughout my project and providing me an opportunity to learn
outside the class room. It was a truly wonderful learning experience.

I would like to thank the training heads Mr.Anand, Ms Sudha and Sales executive Ms Priya for
helping me with the training and other activities and constantly motivating me to give my best.

I would like to dedicate this project to my parents. Without their help and constant support this
project would not have been possible.

I would like to thank all my friends who did their SIP from IDBI FORTIS for their valuable
suggestions and support.

Last but not the least I would like to thank all the respondents who offered their opinions and
suggestions and sometimes critical views throughout the survey which made me constantly
update myself come out with a successful project.




               ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 3
                                                   TABLE OF CONTENTS
AUTHORISATION ..........................................................................................................................2
ACKNOWLEDGEMENTS ................................................................................................................3
ABSRACT .......................................................................................................................................6
LIST OF ILLUSTRATIONS ................................................................................................................8
INTRODUCTION ..........................................................................................................................10
PURPOSE ....................................................................................................................................12
SCOPE OF THE STUDY .................................................................................................................12
OBJECTIVES OF THE PROJECT .....................................................................................................12
LIMITATIONS OF THE STUDY ......................................................................................................12
METHODOLOGY .........................................................................................................................13
SOURCES OF DATA .....................................................................................................................14
LITERATURE STUDY ....................................................................................................................14
INSURANCE.................................................................................................................................15
CHARACTERISTICS OF INSURANCE .............................................................................................15
HISTORY OF INDIAN INSURANCE ...............................................................................................15
INSURANCE MARKET - PRESENT ................................................................................................16
CAPITAL REQUIREMENTS AND FOREIGN PARTICIPATION .........................................................17
LIFE INSURANCE .........................................................................................................................18
COMPANY PROFILE ....................................................................................................................21
ABOUT IDBI FORTIS ....................................................................................................................21
PRODUCT RANGE OF IDBI FORTIS ..............................................................................................23
UNIT LINKED INSURANCE PLANS................................................................................................24
STRUCTURE OF ULIPs .................................................................................................................24
TYPES OF FUNDS UNDER ULIPs ..................................................................................................27
ADVANTAGES OF ULIPS ..............................................................................................................28
FACTORS INFLUENCING THE BUYING OF UNIT LINKEDINSURANCE PLAN (ULIPs) .....................29
UNIT LINKED INSURANCE PLANS (ULIPs) OF DIFFERENT COMPANIES.......................................30
IDBI FORTIS LIFE INSURANCE COMPANY ...................................................................................30
COMPARITIVE SECONDARY DATA ANALYISIS.............................................................................31

                   ICFAI BUSINESS SCHOOL-HYDERABAD                                                                         Page 4
TATA AIG LIFE INSURANCE COMPANY .......................................................................................31
BAJAJ ALLIANZ LIFE INSURANCE COMPANY ...............................................................................33
LIFE INSURANCE CORPORTAION (LIC) OF INDIA ........................................................................35
HDFC STANDARD LIFE INSURANCE COMPANY ..........................................................................37
ICICI PRUDENTIAL LIFE INSURANCE COMPANY .........................................................................39
PERFORMANCE OF ULIPs OF THE SELECTED COMPANIES .........................................................44
PRIMARY DATA ANALYSIS ..........................................................................................................48
MERITS AND DE-MERITS OF IDBI FORTIS LIFE INSURANCE COMPANY ......................................57
MERITS .......................................................................................................................................57
DEMERITS ...................................................................................................................................57
POSITIONING ..............................................................................................................................59
POSITIONING STRATEGIES..........................................................................................................59
POSITIONING STRATEGIES OF IDBI FORTIS ................................................................................60
FINDINGS ....................................................................................................................................63
RECOMMENDATIONS .................................................................................................................64
MY EXPERINECES AND LEARNINGS ............................................................................................66
CONCLUSION ..............................................................................................................................66
ANNEXURE - I (QUESTIONNAIRE) ...............................................................................................69
ANNEXURE - II (FACTOR ANALYSIS OUTPUT [SPSS]) ..................................................................73
ANNEXURE - III (SCHEDULE OF THE PROJECT) ...........................................................................79
REFERENCES ...............................................................................................................................80




                   ICFAI BUSINESS SCHOOL-HYDERABAD                                                                         Page 5
 ABSRACT

The project aims to make a detailed study of Unit Linked Insurance Plans (ULIPs) in the Indian
context, a comparative analysis of ULIPs of some well known selected companies and in the
process identify the strengths and weaknesses of IDBI FORTIS.
The different selected companies apart from IDBI FORTIS on which the project is entirely
focused are namely:
   a. ICICI PRUDENTIAL
   b. BAJAJ ALLIANZ
   c. TATA AIG LIFE
   d. LIFE INSURANCE CORPORATION OF INDIA
   e. HDFC STANDARD LIFE

 The comparative study is primarily based in terms of the various benefits offered viz. Death
Benefits, Health benefits, Maturity Benefits, financial benefits & other benefits. The various
parameters taken into consideration were flexibility, transparency, liquidity and the number of
funds options available.

The project consists of a detailed analysis of the comparison of various ULIPs of IDBI FORTIS
with that of the selected major players in the market. The results of the project have been an
outcome of a detailed analysis of collected secondary data and well supported by analysis of
primary data collected through a survey in the Hyderabad city. The project required me to
design a questionnaire and conduct a primary survey. The survey was mainly conducted to
study the consumer perception, opinion and awareness of various insurance products. The
number of respondents targeted was 133.The sample of respondents included was carefully
selected targeting respondents from all age groups. Also the preferences of the respondents
towards these selected insurance companies have been noted and the reasons analyzed. The
data gathered from the primary survey was coded in a statistical tool called as Statistical
Package for Social Science (SPSS) for analysis and to find various factors that affect an investor
decisions while choosing an investment option in this vast market.

 Finally we interpreted the results of the project by combining both the primary and the
secondary data analyses then identified the areas where the company is really strong and the
areas where it needs to have a second look.

We have also found out the amount to which each of the selected companies was affected due
to the market slow down in the last one year

The project also involved a complete study of the positioning strategies adopted by IBDI FORTIS
in general. This includes a detailed study of the various advertising strategies as well.


               ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 6
The sole objective of this study was to understand the strategies being adopted by the company
to counter the highly efficient stronger players in the market and survive with success.

Finally after a detailed study we have found out the merits and demerits of the IDBI FORTIS and
based on those we have given some recommendations to the company in areas where the
company to has to really work on.

 The Project helped me enhance my knowledge on various technicalities of the Indian insurance
industry and gave me a broader prospective of various investment opportunities available in
the market. Marketing concepts learnt in the classroom were implemented in a real life
environment.




              ICFAI BUSINESS SCHOOL-HYDERABAD                                     Page 7
                                            LIST OF ILLUSTRATIONS

Figure 1: The trend of the Indian insurance industry ($Bn) 2000-2011                                          .................................17
Table 1 : The list of life insurance companies in India                            ............................................................18
Figure 2 : The market share of the Indian Life Insurance industry                                      ........................................19
Figure 3 : Premium break -up under ULIPs .............................................................................. 24
Table 2 : Types of funds under ULIPs                     ...................................................................................... 26
Figure 4 : Advantages of Unit Linked Insurance Plans ............................................................31
Table 3 : NAVs of HDFC Standard Life                       .................................................................................... 43
Figure 5 : NAVs of HDFC Standard Life ..................................................................................... 43
Table 4 : NAVs of Bajaj Allianz ................................................................................................ 44
Figure 6 : NAVs of Bajaj Allianz .................................................................................................. 44
Table 5 : NAVs of ICICI Prudential ........................................................................................... 44
Figure 7 : NAVs of ICICI Prudential                   ......................................................................................... 44
Table 6 : NAVs of LIC ............................................................................................................... 45
Figure 8 : NAVs of LIC ............................................................................................................... 45
Table 7 : NAVs of IDBI FORTIS ................................................................................................. 45
Figure 9 : NAVs of IDBI FORTIS ................................................................................................. 45
Table 8 : NAVs of Tata-AIG                 ..................................................................................................... 46
Figure 10 : NAVs of Tata-AIG .................................................................................................... 46
Table 9 : Percentage change in NAVs of various companies due to recession                                                ...................... 46
Figure 11 : Percentage change in NAVs of various companies due to recession ..................... 46
Figure 12 : Break-up of respondents between different age groups ....................................... 47
Figure 13 : Break-up of respondents by their occupations ........................................................ 48
Figure 14 : Break-up of respondents based on their preferences for various savings
instruments .............................................................................................................................. 48
Figure 15 : Break-up of respondents based on factors influencing their decision                                               ................. 49
Figure 16 : Break-up of respondents based on preferences for various forms of investment ... 49
Figure 17 : Break-down of respondents based on their frequencies of investment                                                     ............50
Figure 18 : Break-down of respondents who own/do not own an insurance policy ................ 50


                  ICFAI BUSINESS SCHOOL-HYDERABAD                                                                            Page 8
Figure 19 : Break-down of respondents who rated risk involved in ULIPs ............................... 50
Figure 20 : Break-down of respondents who own insurance policies in various life insurance
companies      ............................................................................................................................ 51
Figure 21 : Rating scale of selected insurance companies ...................................................... 52
 Figure 22 : Break-down of respondents with different perceptions about the term
“WEALTHSURANCE” .............................................................................................................. 52
 Figure 23 : Break-down respondents with various responses about the future of
IDBI Fortis ..............................................................................................................................53
Table 10 : Average frequency of investments among different age groups ............................ 353
Figure 24 : Average frequency of investments among different age groups                                             ........................54
Table 11 : Age and Frequency of investment (Chi-Square table)                                        ........................................54
Table 12 : KMO and Bartlett’s test of sphericity                            ..................................................................55
Table 13 : The prominent factors influencing the consumer’s investment decision                                                  ........... 55
Table 14 : List of the cities with IDBI Fortis presence ..............................................................59




                  ICFAI BUSINESS SCHOOL-HYDERABAD                                                                         Page 9
INTRODUCTION

In the commercial arena, the choice of an effective strategy is perhaps the most important and
the toughest decision to take. The decision to select among the grand strategies and deciding
upon which strategy will best meet the enterprise’s objectives is rendered complex by multiple
considerations. The same is also true with the insurance companies in India who are constantly
revamping their strategies and coming out with innovative options to stay in the competition.
There were days when Life Insurance Corporation of India (LIC) was the only insurance company
available to people in India and where people synonymised Insurance to LIC. Also since it was a
Public Sector Undertaking (PSU) it has a great support from people. But now times have
changed a lot of private players have entered into the fray. There have been a lot of Indian
companies collaborating with foreign insurance giants like ICICI Prudential, Bajaj Allianz etc
who have already made their presence felt in the Indian Insurance industry.

Even though LIC is still the market leader with more than over 60% of the market share, the
private players are giving it a tough time. Since the last decade the market share of LIC had
fallen down by about more than 20%.

The new private players have started offering a variety of unlimited schemes right from
insurance plans for a 30 day old baby to that of a 70 year old senior citizen. Also the private
companies have started creating the importance and need of insurance in today’s life. They
have started positioning their brands and are marketing their products in such a way the
people have started feeling the need of security in their lives.

Taking into account the huge population and growing per capita income besides several other
driving factors, a huge opportunity is in store for the insurance companies in India. According to
the latest research findings, nearly 80% of Indian population are without life insurance cover
while health insurance and non-life insurance continues to be below international standards.
And this part of the population is also subjected to weak social security and pension systems
with hardly any old age income security. As per our findings, insurance in India is primarily used
as a means to improve personal finances and for income tax planning; Indians have a tendency
to invest in properties and gold followed by bank deposits. They selectively invest in shares also
but the percentage is very small (4-5%). This in itself is an indicator that growth potential for
the insurance sector is immense. It's a business growing at the rate of 15-20% per annum and
presently is of the order of around more than $55 billion.

India is a vast market for life insurance that is directly proportional to the growth in premiums
and an increase in life density. With the entry of private sector players backed by foreign
expertise, Indian insurance market has become more vibrant.



               ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 10
 Competition in this market is increasing with companys’ continuous effort to lure the
customers with new product offerings. However, the market share of private insurance
companies remains low in the 25-35% range. Even to this day, Life Insurance Corporation (LIC)
of India dominates Indian insurance sector. The heavy hand of government still dominates the
market, with price controls, limits on ownership, and other restraints. They private players are
still in their initial days and would take some more time to capture a good market share. At
present they are coming up with new and innovative ideas.

Since the last decade the life insurance industry in India has been growing very fast and many
new companies have entered this business insurance. The Indian life insurance industry has
recorded a robust growth of more than 16 per cent for the nine-month period which ended on
December 31, 2008.It is expected to grow at an amazing rate of 20 per cent this year Also in
the present scenario the most sought after insurance plans are the Unit Linked insurance Plans
(ULIPs).

A ULIP is a life insurance policy which provides a combination of risk cover and investment.
ULIPs have gained high acceptance due to attractive features they offer like flexibility,
transparency, liquidity and a vast variety of fund option. Unit linked plans are suitable for all
customer profiles; however as a general belief the risk averse investors tend to choose
traditional plans and an informed customer prefers a ULIP. ULIPs offer the kind of flexibility
that no insurance product can. ULIPs essentially combine the benefits of an insurance policy
and a market-linked investment. Investors can select a ULIP with an equity-debt combination
that is in line with their risk profile. A risk-taking investor would typically select one with a high
equity component, while a risk-averse investor would opt for a debt-heavy one. Simply
put, ULIPs are structured in such a way that the protection element and the savings element
are distinguishable, and hence managed according to your specific needs. In this way,
the ULIP plan offers unprecedented flexibility and transparency.

So with many players around for a company to really be successful it has to really be very
efficient on all fronts. It has to constantly adapt to the changing consumer preferences with a
lot of new innovations and implementing new technology try to different from the lot.
Especially if it is a new player in the market the company has to really work very hard to get
into the completion and stay afloat.




               ICFAI BUSINESS SCHOOL-HYDERABAD                                          Page 11
PURPOSE

The project is being done as a part of summer internship program of ICFAI Business School-
Hyderabad. The completion of the project is a partial fulfillment requirement for being awarded
the Masters in Business Administration (MBA) degree from the university.

SCOPE OF THE STUDY

This study aims to make a comparative study of the Unit Linked Insurance Plans (ULIPs) of IDBI
FORTIS Life Insurance Company with that of some major selected players in the Indian
insurance market and study the consumer perception towards various insurance products. The
comparative analysis is based on the empirical data collected from the Hyderabad city. The
study also aims to discuss in detail the various positioning strategies adopted by IDBI FORTIS in
general.

OBJECTIVES OF THE PROJECT

      a. To compare the Unit Linked Insurance Plans (ULIPs) of IDBI FORTIS with that of some
         other selected companies.
      b. To identify the strengths and weaknesses of IDBI FORTIS and suggest areas where it
         could focus more and improve upon.
      c. To study the consumer perception towards various insurance products.
      d. To study in detail the positioning strategies of brand IDBI FORTIS in general.


LIMITATIONS OF THE STUDY

      a. The study is confined only to a small segment of the entire population due to
         monetary and time constraints and hence the results are applicable only to the city of
         Hyderabad.
      b. The scope of the project is limited to conceptual and marketing aspects of Life
         Insurance Companies and doesn’t include Claim Settlement and the underwriting
         part of the operations which are equally important aspect of learning.
      c. It is not always possible to evaluate companies under similar parameters since many
         companies deal with various businesses thus clubbing all the companies on the same
         parameters is not always possible.




               ICFAI BUSINESS SCHOOL-HYDERABAD                                     Page 12
METHODOLOGY

The techniques used for data collection are:

     A. Internet surveys and
     B. Questionnaire method

The following methodology has been followed to achieve the objectives of the project.

                                          Step: 1
              Developing a right research design and timeline for the project.

                                           Step: 2
                     Collecting Secondary data of the insurance Industry


                                          Step: 3
                               Designing of the Questionnaire


                                           Step: 4
                                 Analysis of secondary data


                                           Step: 5
                                         Pilot Study


                                           Step: 6
               Collection of primary data-Questionnaires and internet surveys


                                           Step: 7
                                  Analysis of primary data


                                           Step: 8
                        Study of positioning strategies of IDBI FORTIS


                                           Step: 9
                                 Interpretation of the results


                                         Step: 10
                               Preparation of the final report


              ICFAI BUSINESS SCHOOL-HYDERABAD                                    Page 13
SOURCES OF DATA

In the data collection method, we have collected both primary and secondary data to meet our
objectives

Primary Data

The primary data was collected by a survey based on the questionnaire. It was formulated on
the basis of information carefully gathered by me about the various mindsets of the people.
This questionnaire was mainly formulated to target the common man to see his perception and
awareness of various investment options available. The number of respondents targeted was
around 150 and the survey was confined to Hyderabad city.

Secondary Data

The secondary data was collected directly from the companies and their websites and internet
surveys. Also a lot of similar research studies and journals have been referred to.



LITERATURE STUDY

Till today a lot of research has been done on the Indian insurance industry especially the life
insurance sector. The material for this study was collected from various internet sites, journals
and books by various authors. Similar research has been carried out by Sathak Mohanty who
worked on the risk profile of ULIPs and analyzed insurance as an investment option. He says
that Life Insurance Corporation of India (LIC) is still the undisputed leader in the Indian context.

According to Anita Gupta-director, marketing and communication, ING Vysa Life insurance
ULIPs are suitable for all types of customers, right from the lower class to the premium class.
Also according to the Financial express (Dated 12th April, 2009) ULIPs are flexible to the core.

During the course of the project some official studies on the products of Tata-AIG and HDFC
standard Life have been referred to. Also the books on Marketing Management by Philip Kotler
and that of Marketing Research by Naresh Malhotra were referred to gain a deeper insight on
positioning strategies and marketing research techniques. A lot of groundwork has also been
done by studying the vast range insurance products before taking up this research.




               ICFAI BUSINESS SCHOOL-HYDERABAD                                        Page 14
INSURANCE

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

CHARACTERISTICS OF INSURANCE

   1.   Sharing of risks
   2.   Cooperative device
   3.    Evaluation of risk
   4.    Payment on happening of a special event
   5.    The amount of payment depends on the nature of losses incurred.


HISTORY OF INDIAN INSURANCE

Insurance has a long history in India. Life Insurance in its current form was introduced in 1818
when Oriental Life Insurance Company began its operations in India. General Insurance was
however a comparatively late entrant in 1850 when Triton Insurance company set up its base in
Kolkata.

History of Insurance in India can be broadly bifurcated into three eras:

        a. Pre Nationalization
        b. Nationalization and
        c. Post Nationalization

Life Insurance was the first to be nationalized in 1956. Consolidating the operations of various
insurance companies formed Life Insurance Corporation of India. General Insurance followed
suit and was nationalized in 1973. General Insurance Corporation of India was set up as the
controlling body with New India, United India, National and Oriental as its subsidiaries. The
process of opening up the insurance sector was initiated against the background of Economic
Reform process, which commenced from 1991. For this purpose Malhotra Committee was
formed during this year who submitted their report in 1994 and Insurance Regulatory
Development Act (IRDA) was passed in 1999. Resultantly Indian Insurance was opened for
private companies and Private Insurance Company effectively started operations from 2001.
(Source: www.irdaindia.org)

               ICFAI BUSINESS SCHOOL-HYDERABAD                                    Page 15
INSURANCE MARKET - PRESENT

The insurance sector was opened up for private participation a decade back. For years now, the
private players are active in the liberalized environment. The insurance market has witnessed
dynamic changes, which include presence of a fairly large number of insurers both life, and
non-life segment. Most of the private insurance companies have formed joint venture
partnering well-recognized foreign players across the globe.


The Indian life insurance market generated total revenues of $41.36 billion in 2007, thus
Representing a compound annual growth rate (CAGR) of 11.84% for the period spanning 2000-
2007. Life insurance market had a growth of $22.46 billion within a period of 7 years with a
growth rate of 118.24%. Estimated life premiums rose to INR 1,470,800 million ($36.77 billion)
in 2006 from INR 1,301,540 million ($32.54billion) in 2005. We envisage that life premiums in
2011 will be $65.96 billion, a growth larger than they were in 2007. The performance of the
market is forecast to accelerate, with an anticipated CAGR of 9.78% for the four-year period
2007-2011 expected to drive the market to a value of $65.96 billion by the end of 2011. There
would be a growth of $24.6 billion i.e. 59.48% in the next 4 years.

Non-life premiums in India were $6.53 billion in 2007. Gross written premium (GWP) in the
Indian non-life insurance market reached a value of $5.75 billion in 2006, this representing an
annual growth of 13.55% for the period spanning 2006-2007. Estimated non-life premiums rose
from INR230 billion ($5.75 billion) in 2006 to INR261 billion ($6.53 billion) in 2007.
We anticipate that non-life premiums will grow by a CAGR of 9.40% between 2007-2011. We
are looking for non-life premiums to rise by $405 million over the five years to the end of 2011
with a growth rate of 62.02%. (Source: http://www.scribd.com/doc/4996143/OVERVIEW-OF-
INSURANCE-SECTOR-INDIA,http://www.indiaprwire.com/pdf/pressrelease/200805079347.pdf)

With a huge population base and large untapped market, insurance industry is a big
opportunity area in India for national as well as foreign investors. India is the fifth largest life
insurance market in the emerging insurance economies globally and is growing at 32-34%
annually. This impressive growth in the market has been driven by liberalization, with new
players significantly enhancing product awareness and promoting consumer education and
information. The strong growth potential of the country has also made international players to
look at the Indian insurance market.

Moreover, saturation of insurance markets in many developed economies has made the Indian
market more attractive for international insurance players, according to "Booming Insurance
Market in India (2008-2011)”.


               ICFAI BUSINESS SCHOOL-HYDERABAD                                        Page 16
    Total life insurance premium in India is projected to grow Rs 1,230,000 crore by
     2010-11.

    Total non-life insurance premium is expected to increase at a CAGR of 25% for the
     period spanning from 2008-09 to 2010-11.



    With the entry of several low-cost airlines, along with fleet expansion by existing ones
     and increasing corporate aircraft ownership, the Indian aviation insurance market is all
     set to boom in a big way in coming years.

    Home insurance segment is set to achieve a 100% growth as financial institutions have
     made home insurance obligatory for housing loan approvals.



    Health insurance is poised to become the second largest business for non-life insurers
     after motor insurance in next three years.

    A booming life insurance market has propelled the Indian life insurance agents into the
     ‘top 10 country list’ in terms of membership to the Million Dollar Round Table (MDRT)
     — an exclusive club for the highest performing life insurance agents.

       (Source: http://www.marketsmonitor.com/Report/IM588_related.htm)


CAPITAL REQUIREMENTS AND FOREIGN PARTICIPATION

Minimum capital requirement for direct life and Non-life Insurance company is INR1000 million
and that for reinsurance company is INR2000 million. A maximum 26% foreign equity stake is
allowed in direct insurance and reinsurance companies. In the 2004-05 budget, the Government
proposed for increasing the foreign equity stake to 49%.

(Source: www.irdaindia.org)




              ICFAI BUSINESS SCHOOL-HYDERABAD                                   Page 17
LIFE INSURANCE

As is evident from its very name, it deals with insurance of human life. “Life insurance
corporation of India”- a public sector undertaking has the monopoly in this sector since its
nationalization.

In our wordily life, whenever there is uncertainty, there is an involvement of risk. The instinct
for security against such risk is one of the basic motivating forces determining human attitudes.
As a squeal to this quest for Security, the concept of insurance must have been born. The urge
to provide insurance or protection against the loss of life & property must have prompted
people to make some sort of sacrifice willingly in order to achieve security through
“COLLECTIVE CO-OPERATION”, in this sense; story of insurance is probably as old as the story of
mankind.
All life insurance companies in India have to comply with the strict regulations laid out by
Insurance Regulatory and Development Authority of India (IRDA). Therefore there is no risk in
going in for private insurance players. In terms of being rated for financial strength like
international players, only ICICI Prudential is rated by Fitch India at National Insurer Financial
Strength Rating of AAA (Ind) with stable outlook indicating the highest claims paying ability
rating.

     90.00
     80.00
     70.00
     60.00
     50.00
                                                                                           Life
     40.00
                                                                                           Non-life
     30.00
     20.00
     10.00
      0.00
             2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


                  Figure 1: The trend of the Indian insurance industry ($Bn) 2000-2011
                                 (Source: The knowledge Centre)

Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the largest
player in the market. Among the private sector players, ICICI Prudential Life Insurance(JV
between ICICI Bank and Prudential PLC)is the largest followed by Bajaj Allianz Life Insurance
Company Limited (JV between Bajaj Group and Allianz).


               ICFAI BUSINESS SCHOOL-HYDERABAD                                           Page 18
The private companies are coming out with better products which are more beneficial to the
customer. Among such products are the ULIPs or the Unit Linked Insurance Plans which offer
both life cover as well as scope for savings or investment options as the customer desires.
Further, these types of plans are subject to a minimum lock-in period of three years to prevent
misuse of the significant tax benefits offered to such plans under the Income Tax Act.
Unlike the mutual fund product that has a very simple cost structure, ULIPs carry a greater
number of costs (administration and mortality), in addition to the others. So comparing ULIPs
with mutual funds is erroneous.

(Source: http://www.scribd.com/doc/136703/Indian-Insurance-Changing-Trends-and-a-Fresh-
Perspective)

Right now there are a total twenty two life insurance companies operating in India, of which
one (Life Insurance Corporation) is a Public Sector Undertaking and the remaining twenty are
all private sector enterprises. (Source: www.irdaindia.org)


                          List of life insurance companies in India
         1. AEGON RELIGARE
         2. AVIVA
         3. BAJAJ ALLIAZ
         4. BHARATHI AXA
         5. BIRLA SUN LIFE
         6. FUTURE GENERALI
         7. HDFC STANDARD LIFE
         8. HSBC
         9. ICICI PRUDENTIAL
         10. IDBI FORTIS
         11. ING VYSYA
         12. KOTAK LIFE INSURANCE
         13. LIC
         14. MAX NEWYORK LIFE
         15. MET LIFE
         16. RELIANCE LIFE
         17. SAHARA INDIA
         18. SBI LIFE
         19. SHRIRAM LIFE
         20. TATA AIG LIFE
         21. DLF PRAMERICA
         22. CANARA HSBC OBC


                     Table 1: The list of life insurance companies in India


              ICFAI BUSINESS SCHOOL-HYDERABAD                                     Page 19
                                   MARKET SHARE
                   2%                                         LIC
                        1%
               3% 2%                                          ICICI Prudential
                             6%                               Bajaj Allianz
              3%
                                                              SBI Life
             3%
                                                              Reliance
                  7%                                          HDFC Standard Life
                                                              Birla Sun Life
                   9%                   64%                   Max Newyork
                                                              Kotak Mahindra
                                                              Others



Figure 2: The market share of the Indian Life Insurance industry (figures are approximate)
     (Source: As per a report published in 2008 by Ms Pinky Walia-Financial Advisor)




      ICFAI BUSINESS SCHOOL-HYDERABAD                                                 Page 20
COMPANY PROFILE

ABOUT IDBI FORTIS
IDBI Fortis Life Insurance Co Ltd is a joint venture
between three leading financial conglomerates – India’s premier development and commercial
bank, IDBI Bank, one of India’s leading private sector banks, Federal Bank and Europe’s banking
and insurance giant, Fortis, each of which enjoys a significant status in their respective business
segments. In this venture, IDBI Bank owns 48% equity while Federal Bank and Fortis own 26%
equity each.

IDBI Fortis launched its first set of products across India in March 2008, after receiving the
requisite approvals from the Insurance Regulatory Development Authority (IRDA). The company
offers its services through a vast nationwide network across the branches of IDBI Bank and
Federal Bank in addition to a sizeable network of advisors and partners.

At IDBI Fortis, people endeavor to deliver products that provide value and convenience to the
customer. Through a continuous process of innovation in product and service delivery the
company intends to deliver world-class wealth management, protection and retirement
solutions to Indian customers

IDBI Ltd. continues to be, since its inception, India’s premier industrial development bank.
Created in 1956 to support India’s industrial backbone, IDBI has since evolved into a
powerhouse of industrial and retail finance. Today, it is amongst India’s foremost commercial
banks, with a wide range of innovative products and services, serving retail and corporate
customers in all corners of the country from over 490 branches and more than 600 ATMs. The
Bank offers its customers an extensive range of diversified services including project financing,
term lending, working capital facilities, lease finance, venture capital, loan syndication,
corporate advisory services and legal and technical advisory services to its corporate clients as
well as mortgages and personal loans to its retail clients. As part of its development activities,
IDBI has been instrumental in sponsoring the development of key institutions involved in India’s
financial sector – such as the Securities and Exchange Board of India (SEBI), National Stock
Exchange of India Limited (NSE) and National Securities Depository Ltd.

Federal Bank is one of India’s leading private sector banks, with a national network and
dominant presence in the state of Kerala. It has a strong network of over 550 branches and 450
ATMs spread across India. The bank provides over four million retail customers with a wide
variety of financial products. Federal Bank is one of the first large Indian banks to have an
entirely automated and interconnected branch network. They operate on the core banking
platform and are RTGS/ NEFT enabled through which the Bank offers state-of-the-art
technology enabled products and services.

               ICFAI BUSINESS SCHOOL-HYDERABAD                                       Page 21
In addition to interconnected branches and ATMs, the Bank has a wide range of services like
Internet Banking, Mobile Banking, Tele Banking, Any Where Banking, debit cards, co-branded
credit cards, online bill payment and call centre facilities to offer round the clock banking
convenience to its customers. The Bank has been a pioneer in providing innovative
technological solutions to its customers and the Bank has won several awards and
recommendations.

Fortis, a European financial services provider engaged in banking and insurance with a
presence in over 50 countries, offers its personal, business and institutional customers a
comprehensive package of products and services through its own channels, in collaboration
with intermediaries and through other distribution partners. With a market capitalization of
over EUR 40 billion, Fortis ranks among the 20 largest financial institutions in Europe. Fortis’
sound solvency position and dedicated, professional workforce of over 80,000, enables it to
combine global strength with local flexibility to provide its clients with optimum support and
service.

VISION

To be the leading provider of wealth management, protection and retirement solutions that
meets the needs of our customers and adds value to their lives.


MISSION

To continually strive to enhance customer experience through innovative product offerings,
dedicated relationship management and superior service delivery while striving to interact with
our customers in the most convenient and cost effective manner.

To be transparent in the way we deal with our customers and to act with integrity.

To invest in and build quality human capital in order to achieve the mission.

VALUES
       Transparency: Crystal Clear communication to our partners and stakeholders
       Value to Customers: A product and service offering in which customers perceive value
       Rock Solid and Delivery on Promise: This translates into being financially strong,
       operationally robust and having clarity in claims.
       Customer-friendly: Advice and support in working with customers and partners.
       Profit to Stakeholders: Balance the interests of customers, partners, employees,
       shareholder sand the community at large



               ICFAI BUSINESS SCHOOL-HYDERABAD                                       Page 22
PRODUCT RANGE OF IDBI FORTIS

IDBI Fortis offers a variety of products targeting every customer right from a 3 month child to a
70 year senior citizen. All the products have been classified majorly under four plans namely

       Wealthsurance
       Homesurance
       Bondsurance
       Retiresurance

WEALTHSURANCE
The Wealthsurance Foundation Plan enables the customer to save and build wealth to meet
your financial goals. However, unlike other investment alternatives, it also enables him to
achieve his wealth goals even in the event of unexpected death, accidents, disablement or
serious illness. The Wealthsurance Foundation Plan can ensure that his plans for wealth
creation are achieved by protecting that plan with insurance benefits.

HOMESURANCE
The Homesurance Protection Plan is a reducing term plan, which provides insurance cover
equal to the outstanding balance of your home loan. In the unfortunate event of death of the
home loan borrower, the insurance cover enables repayment of the home loan liability.

BONDSURANCE
Bondsurance is a single premium plan which allows you to make a one-time investment and get
a guaranteed amount on maturity. You can choose a maturity period of 5 or 10 years for your
investment. At the end of the chosen period, you will receive a guaranteed maturity amount.
Besides the guaranteed maturity amount, Bondsurance also provides a life insurance cover. In
case of death before the maturity date, a Death Benefit which is also guaranteed will be paid.
Thus you can get life insurance cover, while earning an assured return on your investment.

RETIRESURANCE
Retiresurance is a pension plan without life cover that allows a longer policy term so that the
customer’s investments can get the benefit of compounding. The customer has to choose any
vesting age between 40-75 yrs. The vesting age chosen can also be postponed or preponed
within the above range by informing the company 30 days in advance. It is especially for people
who wish to lead a happy and prosperous life even after their retirement.

(Source:www.idbifortis.com)


              ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 23
UNIT LINKED INSURANCE PLANS

Unit linked insurance plan (ULIP) is a life insurance solution that provides the client with the
benefits of protection and flexibility in investment. It is a solution which provides for life
insurance where the policy value at any time varies according to the value of the underlying
assets at the time. The investment is denoted as unit and is represented by the value that it has
attained called as Net Asset Value (NAV).

ULIPs are a category of goal-based financial solutions that combine the safety of insurance
protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards
providing a life cover. The residual portion of the ULIP is invested in a fund which in turn invests
in stocks or bonds; the value of investments alters with the performance of the underlying fund
opted by the customer.

Simply put, ULIPs are structured in such that the protection element and the savings element
are distinguishable, and hence managed according to your specific needs. In this way,
the ULIP plan offers unprecedented flexibility and transparency.

ULIPs came into play in 1960s and became very popular in Western Europe and America. The
reason that is attributed to the wide spread popularity of ULIP is because of the transparency
and the flexibility which it offers to the clients.

As time progressed the plans were also successfully mapped along with life insurance needs to
retirement planning .In today’s times ULIP provides solution for all the needs of a client like
insurance planning, financial needs, financial planning for children’s future and retirement
planning.( Source:http://www.scribd.com/doc/7216240/Understand-ULIP-Insurance)

STRUCTURE OF ULIPs

ULIPs offered by different insurers have varying charge structures. Broadly the different types
of fees and charges are given below. However the insurers have the right to revise or cancel the
fees and charges over a period of time
( Source: http://www.scribd.com/doc/7044410/ULIPs)

Premium Allocation charges
This is a percentage of the premium appropriated towards charges before allocating the units
under the policy. This charge normally includes initial and renewal expenses apart from
commission expenses.




               ICFAI BUSINESS SCHOOL-HYDERABAD                                        Page 24
Mortality Charges
These are charges to provide for the cost of insurance coverage under the plan. Mortality
charges depend on number of factors such as age, amount of coverage, state of health etc.
Fund Management Charges
These are fees levied for management of the fund(s) and are deducted before arriving at the
Net Asset Value (NAV) .
Policy/ Administration Charges
These are the fees for administration of the plan and levied by cancellation of units. This could
be flat throughout the policy term or vary at a pre-determined rate



                                                 PREMIUM




                                                LESS CHARGES




                        INVESTMENT                                  LIFE COVER
                    REPRESENTED AS UNITS



                                                                           Fund
                                                ULIPs Structure         Management
                                    Mortality                             Charges
                Administration      Charges
                  Charges

                       Premium
                       Allocation
                        Charges
                                                         Invested
                                                         Amount




                                 Figure 3 : Premium break -up under ULIPs


              ICFAI BUSINESS SCHOOL-HYDERABAD                                        Page 25
Surrender Charges
A surrender charge may be deducted for premature partial or full encashment of units
wherever applicable, as mentioned in the policy conditions.
Fund Switching Charge
Generally a limited number of fund switches may be allowed each year without charge, with
subsequent switches, subject to a charge. But now a days many insurers offer fund switching
free of cost.
Service Tax Deductions
Before allotment of the units the applicable service tax is deducted from the risk portion of the
premium.




              ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 26
TYPES OF FUNDS UNDER ULIPs

Most insurers offer a wide range of funds to suit one’s investment objectives, risk profile and
time horizons. Different funds have different risk profiles. The potential for returns also varies
from fund to fund. The following are some of the common types of funds available along with
an indication of their risk characteristics.

(Source: www.irdaindia.org)



General description              Nature of investments                 Risk category
Equity Funds                     Primarily invested in company         Medium to High
                                 stocks with the general aim of
                                 capital appreciation.


Income, Fixed Interest and       Invested in corporate bonds,          Medium
Bond Funds                       government securities and other
                                 fixed income instruments.


Cash Funds                       Sometimes known as Money              Low
                                 Market Funds — invested in
                                 cash, bank deposits and money
                                 market instruments


Balanced Funds                    Combining equity investment          Medium
                                  with fixed interest instruments




                                 Table 2: Types of funds under ULIPs




               ICFAI BUSINESS SCHOOL-HYDERABAD                                         Page 27
ADVANTAGES OF ULIPS

ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The plan
is a one stop solution for everything the customers want. Unit Linked Insurance Plans (ULIPs)
are different from traditional plans purely because, they are much more transparent, various
charges are shared with the customer before the sale of the product, so as to enable the
customer to make an informed decision. (Source:www.scribd.com/doc/7044410/ULIPs)

Customers have the flexibility to choose their life cover. Also the customers have the choice of
multiple fund options based on their risk appetite, thereby enabling an investor to make the
desired returns from the investment.

The following are some of the advantages of Unit linked plans:

         a. Life protection
         b. Investment and Savings
                  Market linked fund based on risk profile
                  Switch option
                  Premium redirection
                  Automatic Transfer Plan(ATP)
         c. Tax Planning
         d. Flexibility of cover continuance
         e. Transparency
         f. Extra protection with riders
                  Death due to accident
                  Disability
                  Critical illness
         g. Liquidity
                  Partial withdrawals during the term
                  At maturity
         h. Variable investment options
         i.   Premium holiday
         j.   Allow Top-ups



               ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 28
                                            Insurance +
                                            Investment
                 Long Term                                           Allow Top Ups
               Wealth Creation



          Tax Benefits                                                           Riders
                                          ADVANTAGES OF
                                              ULIPS

              Guaranteed                                                 Transparency
             Capital Returns



                    Flexibility                                          Invest as per
                                                                       your risk appetite
                                                Premium
                                                 Holiday


                               Figure 4: Advantages of Unit Linked Insurance Plans



FACTORS INFLUENCING THE BUYING OF UNIT LINKEDINSURANCE PLAN (ULIPs)

The degree of buying of ULIPs insurance varies from person to person. It depends upon many
factors. The factors can be classified into personal, social, economic, psychological and
company related variables. Age and experience of policyholder are personal factors, while the
co- education is a social factor. Economic factors include occupation, income and wealth, and
the psychological factors consist of perception, satisfaction about the services rendered by
insurance companies, the impact of advertisement and personal selling made by insurance
companies on policyholders. The company related variables are the promotional efforts to sell
the policies to prospective buyers. These include advertisement and personal selling too.




              ICFAI BUSINESS SCHOOL-HYDERABAD                                               Page 29
UNIT LINKED INSURANCE PLANS (ULIPs) OF DIFFERENT COMPANIES


IDBI FORTIS LIFE INSURANCE COMPANY

IDBI FORTIS different variety of schemes and a good
range of ULIPs under the flagship banner Wealthsurance. There are a lot of other ULIPs under
Bondsurance, Homesurance and Retiresurance but as our study is only confined to the study
and comparative analysis of ULIPs under Wealthsurance we would just be discussing about the
various plans under Wealthsurance. As discussed earlier the Wealthsurance Foundation Plan
enables the customer to save and build wealth to meet your financial goals. However, unlike
other investment alternatives, it also enables him to achieve his wealth goals even in the event
of unexpected death, accidents, disablement or serious illness.

The Wealthsurance Foundation Plan can ensure that his plans for wealth creation are achieved
by protecting that plan with insurance benefits. Wealthsurance is one of its kind in India. The
company offer 11 investment options and 8 protection benefits under the plan apart from tax
benefits (Source: www.idbifortis.com)
Under Wealthsurance there are a lot of different funds available which are explained below:

                                WEALTHSURANCE
Min entry age                      30 dys
Max entry age                      65 yrs
Min premium                        10000
Max maturity age                   75 yrs
Riders                            ADBR,ADB,WOPR,MAJOR DISEASES BENIFIT,HOSPITAL CASH
                                 BENEFIT,TERMINAL ILLNESS BENEFIT
Min premium payment term            3 yrs
Types of funds                    EQUITY,NIFTY,Capital Guarantee, Asset Allocator,
                                GRF,MONTHLY INT A/C,INCOME,LIQUID


As discussed earlier we would be comparing the Unit Linked Insurance Plans (ULIPs) of the
companies selected initially with those of IDBI FORTIS and then make a detailed analysis. This
analysis would be well supported by the primary data analysis and then the final results would
be interpreted .So here first we would be listing out various ULIPs of the selected companies
and their details. After that we make a detailed comparison with that of the plans under
Wealthsurance of IDBI FORTIS and explain it.

So following are the details of ULIPs of various companies and the comparative analyses.



              ICFAI BUSINESS SCHOOL-HYDERABAD                                     Page 30
COMPARITIVE SECONDARY DATA ANALYISIS


TATA AIG LIFE INSURANCE COMPANY

TATA AIG OFFERS FOUR DIFFERENT TYES OF ULIPs

   a.   INVEST ASSURE CARE
   b.   INVEST ASSURE FLEXI
   c.   INVEST ASSURE II
   d.   INVEST ASSURE EXTRA



       INVEST ASSURE CARE                                  INVEST ASSURE FLEXI
Min entry age                  30 dys              Min entry age                  30 dys
Max entry age                  45 yrs              Max entry age                  70 yrs
Max Maturity age               65                  Max Maturity age               80
Min premium                    12000               Min premium                    15000
No of funds                    5                   No of funds                    7
Riders                         ADBR,CIBR           Riders                         ADBR,CIBR
Min premium payment term       NM                  Min premium payment term       NM


           INVEST ASSURE II                             INVEST ASSURE EXTRA
Min entry age                  15,20,30            Min entry age                  15,20,30
                               yrs                                                yrs
Max entry age                  45 yrs              Max entry age                  45 yrs
Max Maturity age               60                  Max Maturity age               60
Min premium                    12000               Min premium                    12000
No of funds                    5                   No of funds                    4
Riders                         ADBR,CIBR,          Riders                         ADBR,CIBR
                               WOP
Min premium payment term       NM                  Min premium payment term       NM


ADBR-Accidental Death Benefit Rider, CIBR-Critical Illness Benefit Rider, NM-Not Mentioned

                               (Source: www.tata-aig-life.com)




              ICFAI BUSINESS SCHOOL-HYDERABAD                                    Page 31
COMPARITIVE ANALYSIS

                           I.   Through Wealthsurance a customer can even invest
                                at the age of 65 where as in this product if the
                                customer is beyond 45 years he will not be allowed to
                                invest.
  INVEST ASSURE CARE     II.    Customer can keep his money invested till the age of
                                75 years and take benefit of the market performance
                                whereas here the plan matures at the age of 65.
                         III.    In Wealthsurance Free partial withdrawal starts after
                                completion of 3 years where as in this product the
                                customer needs to wait for 5 completed years before
                                he can do a withdrawal
                         IV.    Wealthsurance has a Premium allocation charge of
                                only 4% as against 50% allocation in this product
                         V.     Through Wealthsurance a customer can even invest
                                at the age of 65 where as in this product if the
    INVEST ASSURE II            customer is beyond 45 years he will not be allowed to
                                invest.
                         VI.     Customer can keep his money invested till the age of
                                75 years and take benefit of the market performance
                                whereas here the plan matures at the age of 60.

                           I.   Wealthsurance has a Premium allocation charge of
                                only 4% as against 40% allocation in this product
                         II.    Through Wealthsurance a customer can even invest
                                at the age of 65 where as in this product if the
  INVEST ASSURE EXTRA           customer is beyond 45 years he will not be allowed to
                                invest.
                         III.   Customer can keep his money invested till the age of
                                75 years and take benefit of the market performance
                                whereas here the plan matures at the age of 60.
                         IV.     Min Entry age in Wealthsurance as 0 Years as
                                against the Min Entry age of 15 Years
                           I.   In Wealthsurance the Min Premium amount is only
                                Ten Thousand Rupees in comparison to Fifteen
                                Thousand Rupees in this Product.
                         II.    Wealthsurance has a 4% allocation charge where as
   INVEST ASSURE FLEXI          in this product the allocation charge is 16%
                         III.   Wealthsurance has different riders/protection Basket
                                to choose from including Hospital cash benefit which
                                gives money on a daily basis if hospitalized.



           ICFAI BUSINESS SCHOOL-HYDERABAD                              Page 32
BAJAJ ALLIANZ LIFE INSURANCE COMPANY

BAJAJ ALLAINZ OFFERS FIVE TYES OF ULIPs

   a.   UNIT GAIN PLUS GOLD
   b.   UNIT GAIN PREMIER
   c.   CENTURY PLUS
   d.   NEW UNIT GAIN PLUS
   e.   PENSION GUARANTEE

       UNIT GAIN PLUS GOLD                              UNIT GAIN PREMIER
Min entry age                 0 yrs            Min entry age                  0 yrs
Max entry age                 60 yrs           Max entry age                  60 yrs
Max Maturity age              70 yrs           Max Maturity age               70 yrs
Min premium                   12000            Min premium                    50000
No of funds                   6                No of funds                    3
Riders                        6(after 18)      Riders                         NM
Min premium payment term      3 yrs            Min premium payment term       3 yrs


            CENTURY PLUS                            NEW UNIT GAIN PLUS
Min entry age                 8 yrs          Min entry age                   0 yrs
Max entry age                 60 yrs         Max entry age                   60 yrs
Max Maturity age              70 yrs         Max Maturity age                70 yrs
Min premium                   25000          Min premium                     10000
No of funds                   7              No of funds                     7
Riders                        ADBR           Riders                          ADBR,WOP
                                                                             CIBR,FIB,HCB
                                                                             PDB
Min premium payment term      3 yrs          Min premium payment term        3 yrs


      PENSION GUARANTEE                      ADBR-Accidental Death Benefit Rider,
Min entry age                 45 yrs        CIBR-Critical Illness Benefit Rider,
Max entry age                 80 yrs        NM-Not Mentioned,
Max Maturity age              NA            WOP-Waiver of Premium,
Min premium                   25000-        FIB-Family Income Benefit,
                              purchase      HCB-Hospital Cash Benefit,
                              price         PDB-Permanent Disability Benefit
No of funds                   NM
Riders                        NM            (Source: www.bajajallianz.com)
Min premium payment term      NM


              ICFAI BUSINESS SCHOOL-HYDERABAD                                Page 33
COMPARITIVE ANALYSIS

                           I.   Wealthsurance only has a allocation charge of only
                                4% in comparison to 15% in this product
   UNIT GAIN PLUS GOLD   II.    Max Entry age in Wealthsurance is 65 as against 60
                                of Unit Gain Gold Plus

                         III.   Wealthsurance has an Min Entry Age of 0 Years
                                against this product where the entry age is 8 Years.
                         IV.    Min Premium in Wealthsurance is only Ten Thousand
         CENTURY PLUS           Rupees in comparison to Twenty Five Thousand
                                Rupees of this product.
                         V.     In Wealthsurance there is a choice of 5 riders where
                                as in this product only one rider is available

                           I.   Wealthsurance only has a allocation charge of only
   NEW UNIT GAIN PLUS           4% in comparison to 55% in this product
                         II.    Max Entry age in Wealthsurance is 65 as against 60
                                of Unit Gain Gold Plus

                           I.   Min Premium in Wealthsurance is only Ten Thousand
                                Rupees in comparison to Fifty Thousand Rupees of
   UNIT GAIN PREMIUM            this product.
                         II.    Max Entry age in Wealthsurance is 65 as against this
                                product which has a cut of 60 years.

                           I.   Wealthsurance can be customized for retirement
                                planning.
                         II.    Customers can opt for a partial withdrawal without
   PENSION GUARANTEE            any charges post 3 years from his fund value and use
                                the money as pension. There is no Tax/Charges on the
                                money withdrawn/taken as pension




           ICFAI BUSINESS SCHOOL-HYDERABAD                             Page 34
LIFE INSURANCE CORPORTAION (LIC) OF INDIA

LIC OFFERS THREE DIFFERENT TYPES OF ULIPS

   a. MARKET PLUS
   b. PROFIT PLUS (RP & SP)
   c. FORTUNE PLUS

             MARKET PLUS                                  PROFIT PLUS(RP&SP)
Min entry age                 18 yrs               Min entry age                      0 yrs
Max entry age                 70 yrs               Max entry age                      65 yrs
Max Maturity age              75 yrs               Max Maturity age                   70,75 yrs
Min premium                   5000 RP              Min premium                        1000 RP
                              10000 SP                                                20000 SP
No of funds                   4                    No of funds                        4
Riders                        ADBR                 Riders                             ADBR,CIBR
Min premium payment term      5 yrs                Min premium payment term           3 yrs


                                     FORTUNE PLUS
                        Min entry age                    12 yrs
                        Max entry age                    60 yrs
                        Max Maturity age                 65 yrs
                        Min premium                      20000
                        No of funds                      4
                        Riders                           ADBR
                        Min premium payment term         5 yrs



           ADBR-Accidental Death Benefit Rider, CIBR-Critical Illness Benefit Rider

                                 (Source: www.licindia.com)




             ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 35
COMPARITIVE ANALYSIS

                          I.    Premium allocation charge is 16.5% in this product
                                where as Wealthsurance has a charge of Max 4%.
                         II.     In Wealthsurance there is unlimited switching
                                redirection and partial withdrawal allowed absolutely
        MARKET PLUS             free of charge.
                         III.   There are no riders available in this product as
                                against Wealthsurance has a host of riders to choose
                                from.
                         IV.     After 3 years we can go for unlimited partial
                                withdrawals as against in this product there are no
                                partial withdrawal available
                           I.   Premium allocation charge is 15% min in this product
                                where as Wealthsurance has a charge of Max 4%.
 PROFIT PLUS (RP & SP)   II.    In Wealthsurance there is unlimited switching
                                redirection and partial withdrawal allowed absolutely
                                free of charge.
                         III.   There are no riders available in this product as
                                against Wealthsurance has a host of riders to choose
                                from.

                           I.   Min Entry age in Wealthsurance is 0 years as against
                                in this product it is 12 years
      FORTUNE PLUS       II.    Max entry age in Wealthsurance is 65 years as
                                against in this product it is 60 years only.




            ICFAI BUSINESS SCHOOL-HYDERABAD                             Page 36
HDFC STANDARD LIFE INSURANCE COMPANY

HDFC STANDARD LIFE OFEERS FOUR DIFFERENT TYPES OF ULIPs

   a.   ENDOWMENT PLUS II
   b.   ENHANCED LIFE PROTECTION II
   c.   UNIT LINKED PENSION RP
   d.   UNIT LINKED PENSION SP

        ENDOWMENT PLUS II                                  ENHANCED LIFE
                                                           PROTECTION II
Min entry age                  18                   Min entry age                      18
Max entry age                  65                   Max entry age                      45
Max Maturity age               75                   Max Maturity age                   75
Min premium                    12000                Min premium                        12000
No of funds                    7                    No of funds                        7
Riders                         ADBR,CIBR            Riders                             NO
Min premium payment term       TERM                 Min premium payment term           TERM


   UNIT LINKED PENSION RP                              UNIT LINKED PENSION SP
Min entry age                  18                   Min entry age                      18
Max entry age                  65                   Max entry age                      70
Max Maturity age               75                   Max Maturity age                   75
Min premium                    12000                Min premium                        NM
No of funds                    7                    No of funds                        7
Riders                         NO                   Riders                             NO
Min premium payment term       TERM                 Min premium payment term           TERM


            ADBR-Accidental Death Benefit Rider, CIBR-Critical Illness Benefit Rider

                                 (www.hdfcstandardlife.com)




              ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 37
COMPARATIVE ANALYSIS

                             I.   Min Entry age in Wealthsurance is 0 years as
                                  against in this product it is 18 years
                            II.   Premium allocation charge is 40% in this product
    ENOWMENT PLUS II              where as Wealthsurance has a charge of Max 4%.
                           III.   Min Premium in Wealthsurance is 10000 as
                                  against this product.
                           IV.    Min Entry age in Wealthsurance is 0 years as
                                  against in this product it is 18 years
                            V.    Premium allocation charge is 40% in this product
                                  where as Wealthsurance has a charge of Max 4%.
ENHANCED LIFE PROTECTION   VI.     Min Premium in Wealthsurance is 10000 as
           II                     against this product.          Max entry age in this
                                  product is only 45 years where as in
                                  Wealthsurance it is 65 years
                           VII.   In Wealthsurance after 3 years unlimited partial
                                  withdrawals are allowed where as in this product
                                  the customer needs to wait till the 5th year.
                             I.   There are no rider available in this product as
                                  against Wealthsurance has a host of riders to
                                  choose from.
                            II.    Allocation charge of 25% on this product and
                                  Wealthsurance has a 4% charge.
 UNIT LINKED PENSION RP    III.    Annuity is taxable where as all the funds in
                                  Wealthsurance is tax free. Wealthsurance can be
                                  customized to be a tax free retirement plan.
                           IV.    Post 3 years customers can also do unlimited
                                  partial withdrawal whenever there is a need for
                                  money without being charged or taxed.
                            V.    Min Premium in Wealthsurance is 10000 as
                                  against this product.
                             I.   There is no rider available in this product as
                                  against Wealthsurance has a host of riders to
 UNIT LINKED PENSION SP           choose from.
                            II.    Allocation charge of 6% on this product and
                                  Wealthsurance has a 4% charge.
                           III.   Post 3 years customers can also do unlimited
                                  partial withdrawal whenever there is a need for
                                  money without being charged or taxed.
                           IV.    Min Premium in Wealthsurance is 10000 as
                                  against this product.



           ICFAI BUSINESS SCHOOL-HYDERABAD                              Page 38
ICICI PRUDENTIAL LIFE INSURANCE COMPANY

ICICI PRUDENTIAL OFFERS ELEVEN DIFFERENT TYPES OF ULIPs

   a.   LIFE TIME GOLD
   b.   LIFE LINK SUPER
   c.   PREMIER LIFE GOLD
   d.   LIFE TIME PLUS
   e.   LIFE STAGE
   f.   SMART KID CHILD PLAN
   g.   LIFE TIME SUPER PENSION
   h.   LIFE STAGE RP PRNSION
   i.   LIFE STAGE RP
   j.   LIFE STAGE ASSURE
   k.   INVEST SHEILD LIFE NEW


            LIFE TIME GOLD                                LIFE LINK SUPER
Min entry age                0                Min entry age                  0
Max entry age                65               Max entry age                  65
Max Maturity age             75               Max Maturity age               70
Min premium                  20000            Min premium                    50000
No of funds                  7                No of funds                    7
Riders                       ADBR,CIBR,       Riders                         NO
                             WOP
Min premium payment term     3 yrs            Min premium payment term       SP



         PREMIER LIFE GOLD                                LIFE TIME PLUS
Min entry age                0                Min entry age                  0
Max entry age                65,69            Max entry age                  65
Max Maturity age             75               Max Maturity age               75
Min premium                  10000            Min premium                    20000
No of funds                  7                No of funds                    7
Riders                       ADBR,CIBR        Riders                         ADBR,CIBR
                             WORP
Min premium payment term     3,5 yrs          Min premium payment term       3 yrs




              ICFAI BUSINESS SCHOOL-HYDERABAD                               Page 39
           LIFE STAGE                         SMART KID CHILD PLAN
Min entry age               0             Min entry age                 0
Max entry age               65            Max entry age                 15
Max Maturity age            75            Max Maturity age              25
Min premium                 15000         Min premium                   12000
No of funds                 7             No of funds                   7
Riders                      ADBR,CIBR     Riders                        ADBR,CIBR
                                                                        WOP
Min premium payment term    LIFE BASED    Min premium payment term      3 yrs


  LIFE TIME SUPER PENSION                     LIFE STAGE RP PENSION
Min entry age               18            Min entry age                 18
Max entry age               65            Max entry age                 70
Max Maturity age            45 yrs        Max Maturity age              50-80 yrs
                            vesting age                                 Vesting age
Min premium                 15000         Min premium                   15000
No of funds                 7             No of funds                   6
Riders                      ADBR,CIBR     Riders                        NO
Min premium payment term    3 yrs         Min premium payment term      3 yrs



           LIFE STAGE RP                          LIFE STAGE ASSURE
Min entry age               0             Min entry age                 0
Max entry age               MAX TERM      Max entry age                 65
                            75
Max Maturity age            75            Max Maturity age              75
Min premium                 15000         Min premium                   10000
No of funds                 6             No of funds                   7
Riders                      ADBR,CIBR     Riders                        ADBR,CIBR
Min premium payment term    3 yrs         Min premium payment term      3 yrs


   INVEST SHIELD LIFE NEW
                                            ADBR-Accidental Death Benefit Rider,
Min entry age               0               CIBR-Critical Illness Benefit Rider,
Max entry age               65              NM-Not Mentioned,
Max Maturity age            75              WOP-Waiver of Premium
Min premium                 12000           SP-Single Premium
No of funds                 6
Riders                      NM              (Source: www.iciciprulife.com)
Min premium payment term    3 yrs


                ICFAI BUSINESS SCHOOL-HYDERABAD                       Page 40
COMPARATIVE ANALYSIS


                          I.   Premium allocation charge is premium based in this
                               product where as Wealthsurance has a charge of Max
                               4% and with higher premium the allocation charge
     LIFE TIME GOLD            decreases.
                        II.     Min Premium in Wealthsurance is only Rs.10000 as
                               against in this product it is 20000
                        III.    In Wealthsurance there is unlimited switching
                               redirection and partial withdrawal allowed absolutely
                               free of charge.
                          I.    Premium allocation charge is 20% in this product
                               where as Wealthsurance has a charge of Max 4%.
                        II.     Min Premium in Wealthsurance is only Rs.10000 as
     LIFE LINK SUPER           against in this product it is 20000
                        III.    In Wealthsurance there is unlimited switching
                               redirection and partial withdrawal allowed absolutely
                               free of charge.
                          I.   Premium allocation charge is 12% in this product
                               where as Wealthsurance has a charge of Max 4%
                        II.    There are no riders available in this product as
    PREMIER LIFE GOLD          against Wealthsurance has a host of riders to choose
                               from.
                        III.   In Wealthsurance there is unlimited switching
                               redirection and partial withdrawal allowed absolutely
                               free of charge
                          I.   Premium allocation charge is 25% in this product
                               where as Wealthsurance has a charge of Max 4%.
                        II.     Min Premium in Wealthsurance is only Rs.10000 as
       LIFE TIME PLUS          against in this product it is 20000
                        III.   In Wealthsurance there is unlimited switching
                               redirection and partial withdrawal allowed absolutely
                               free of charge.
                          I.   Premium allocation charge is 25% in this product
                               where as Wealthsurance has a charge of Max 4%.
                        II.     Min Premium in Wealthsurance is only Rs.10000 as
                               against in this product it is 20000
                        III.   In Wealthsurance there is unlimited switching
        LIFE STAGE RP          redirection and partial withdrawal allowed absolutely
                               free of charge.
                        IV.    There are only 2 riders available in this product as
                               against Wealthsurance has a host of riders to choose
                               from.

           ICFAI BUSINESS SCHOOL-HYDERABAD                             Page 41
                          I.    Premium allocation charge is 25% in this product
                               where as Wealthsurance has a charge of Max 4%.
                         II.   Min Premium in Wealthsurance is only Rs.10000 as
                               against in this product it is 20000
       LIFE STAGE       III.   In Wealthsurance there is unlimited switching
                               redirection and partial withdrawal allowed absolutely
                               free of charge.
                        IV.    There are only 2 riders available in this product as
                               against Wealthsurance has a host of riders to choose
                               from.
                          I.   Premium allocation charge is 20% in this product
                               where as Wealthsurance has a charge of Max 4%.
                         II.   Min Premium in Wealthsurance is only Rs.10000 as
SMART KID CHILD PLAN
                               against in this product it is 12000
                        III.    Wealthsurance can be beautifully customized to be a
                               child plan by just adding wavier of premium.

                          I.    Premium payable in this product is Rs.75000 as
                               against in Wealthsurance it is only Rs.10000
                         II.    There are only two rider available in this product as
                               against Wealthsurance has a host of riders to choose
                               from.
                        III.   Allocation charge of 20% on this product and
  LIFE TIME SUPER              Wealthsurance has a 4% charge.
      PENSION           IV.     Annuity is taxable where as all the funds in
                               Wealthsurance is tax free. Wealthsurance can be
                               customized to be a tax free retirement plan. 4. Post 3
                               years customers can also do unlimited partial
                               withdrawal whenever there is a need for money
                               without being charged or taxed.

                          I.   Premium payable in this product is Rs.15000 as
                               against in Wealthsurance it is only Rs.10000
                         II.   There are only two rider available in this product as
                               against Wealthsurance has a host of riders to choose
                               from.
LIFE STAGE PR PENSION   III.    Annuity is taxable where as all the funds in
                               Wealthsurance is tax free. Wealthsurance can be
                               customized to be a tax free retirement plan.
                        IV.    Post 3 years customers can also do unlimited partial
                               withdrawal whenever there is a need for money with
                               being charged or taxed, absolutely free.


          ICFAI BUSINESS SCHOOL-HYDERABAD                              Page 42
                                     I.   In Wealthsurance partial withdrawals are allowed
                                          right after 3 years where as in this product the
                                          customer cannot touch his funds till 7th year.
                                    II.    First year premium is utilized towards Guaranteed
                                          additions and returned on maturity as a Guarantee.
      LIFE STAGE ASSURE            III.   If you surrender the policy the GA component is not
                                          given to the customer and only the FV which gets
                                          accumulated from 2nd premium is returned after
                                          deducting surrender charges, where as in
                                          Wealthsurance there will not be any other charges
                                          apart from surrender charges that too if applicable

                                   IV.    Premium allocation charge is 20% in this product
                                          where as Wealthsurance has a charge of Max 4%.
                                    V.    Min Premium in Wealthsurance is only Rs.10000 as
                                          against in this product it is 20000
                                   VI.    In Wealthsurance there is unlimited switching
   INVEST SHEILD LIFE                     redirection and partial withdrawal allowed absolutely
         NEW                              free of charge.
                                   VII.   There are only 2 riders available in this product as
                                          against Wealthsurance has a host of riders to choose
                                          from.
                                  VIII.   This product has no top up facility where as in
                                          Wealthsurance tops are allowed any time.




IDBI FORTIS is a new company with over just over one year of operations and so we have very
less information about its past performance. Therefore not many negatives can be found with
the company in regard to the Unit Linked Insurance Plans. Some general demerits with regard
to the distribution network and marketing strategies have been mentioned after the analysis of
the primary data.

As a part of this comparative analysis we have also compared the performance of ULIPs of a
selected fund since the last one year (as the data of IDBI FORTIS is limited only to the last one
year). The comparison has been carried out in the next page.




              ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 43
PERFORMANCE OF ULIPs OF THE SELECTED COMPANIES

Here in order to compare the performances of the ULIPs of the selected five companies with
that of IDBI FORTIS we have selected a particular type of fund called equity growth funds. The
reason for selecting equity growth fund is that we would be very clearly able to understand the
effect of market slowdown on these companies. Here we have considered the Net asset Values
(NAV) of the equity growth funds from April 1st 2008 to April 30th2009.We have then compared
the compared the maximum and minimum NAVs during the period and found out the
percentage change for the NAVs observed for the equity funds of the respective selected
companies selected companies.

We have calculated the average NAV for every month (from April 1st 2008 to April 30th2009) for
all the companies and then plotted them on graphs. We have then found out the extent to
which each company was affected due to the market slowdown. We have also taken into
consideration the latest NAVs of these companies to see the pattern of growth of these funds
post recession. The percentage change (negative) in the Net Asset value for all the companies
has been calculated below and we observe that LIC was the least affected among the selected
companies with only a percentage change of only -23.38% which is quite low compared to
-43.84% of that of Bajaj Allianz.

IDBI Fortis has shown a percentage change of -38.95%.But since IDBI Fortis is a new company
which was started just a year back we can say that it has managed quite well and right now it
is showing a quite good and positive growth as we can see from its present NAV.

      Month          NAV
       Apr-08         8.4099
       May-08         7.7124                                              HDFC STANDARD LIFE
        Jun-08        7.5374               9
                                           8
         Jul-08       8.1797               7
       Aug-08         7.9632               6
                                           5
                                     NAV




       Sep-08         5.9740
                                           4
       Oct-08         5.7968               3
       Nov-08         5.6706               2
                                           1
       Dec-08         5.5100               0
        Jan-09        5.4479
                                                        May-08
                                                                 Jun-08




                                                                                                     Oct-08




                                                                                                                                Jan-09


                                                                                                                                                  Mar-09
                                               Apr-08




                                                                                   Aug-08




                                                                                                                                                           Apr-09
                                                                          Jul-08


                                                                                            Sep-08


                                                                                                              Nov-08




                                                                                                                                         Feb-09
                                                                                                                       Dec-08




       Feb-09         5.1516
       Mar-09         6.1597
                                                                                              MONTH
       Apr-09         6.4646

                           Table 3 & Figure 5: NAVs of HDFC Standard Life
                               (Source: wwww.hdfcstandardlife.com)

                  ICFAI BUSINESS SCHOOL-HYDERABAD                                                                                                   Page 44
Month       NAV
Apr-08       8.4099
May-08       7.7124                                                               BAJAJ ALLIANZ
 Jun-08      7.5374                30
  Jul-08     8.1797                25
Aug-08       7.9632                20
Sep-08       5.9740




                            NAV
                                   15
Oct-08       5.7968
                                   10
Nov-08       5.6706
                                    5
Dec-08       5.5100
                                    0
 Jan-09      5.4479




                                                              Jun-08




                                                                                                                                                                 Mar-09
                                                                                                          Oct-08



                                                                                                                                           Jan-09
                                                   May-08
                                        Apr-08




                                                                                    Aug-08



                                                                                                                     Nov-08




                                                                                                                                                                            Apr-09
                                                                         Jul-08


                                                                                               Sep-08




                                                                                                                                                      Feb-09
                                                                                                                                Dec-08
Feb-09       5.1516
Mar-09       6.1597
Apr-09       6.4646                                                                              MONTH


                      Table 4 & Figure 6: NAVs of Bajaj Allianz
                       (Source: www.bajajallianz.com)




Month       NAV
Apr-08      56.3500
May-08      56.6050                                                       ICICI PRUDENTIAL
 Jun-08     48.9250                60
  Jul-08    48.8700                50
Aug-08      51.4450                40
Sep-08      49.1450
                             NAV




                                   30
Oct-08      39.4450                20
Nov-08      35.6850                10
Dec-08      36.4000
                                    0
 Jan-09     34.8450
                                                                                                                                                                               Apr-09
                                          Apr-08
                                                     May-08



                                                                                      Aug-08



                                                                                                                       Nov-08
                                                                Jun-08
                                                                           Jul-08


                                                                                                 Sep-08




                                                                                                                                                        Feb-09
                                                                                                                                                                   Mar-09
                                                                                                                                  Dec-08
                                                                                                            Oct-08



                                                                                                                                             Jan-09




Feb-09      34.2650
Mar-09      33.4050
Apr-09      39.9150                                                                                 MONTH


                      Table 5 & Figure 7: NAVs of Bajaj Allianz
                        (Source: www.iciciprulife.com)



        ICFAI BUSINESS SCHOOL-HYDERABAD                                                                                                                           Page 45
Month      NAV
Apr-08     12.2400
May-08     12.1735                                                                    LIC
                                  14
 Jun-08    11.0585
                                  12
  Jul-08   11.0290
                                  10
Aug-08     11.4950
                                   8




                            NAV
Sep-08     11.1155
                                   6
Oct-08      9.5505
                                   4
Nov-08      9.3775
                                   2
Dec-08      9.6165                 0
 Jan-09     9.6130

                                       Apr-08
                                                 May-08


                                                                    Jul-08
                                                                             Aug-08




                                                                                                                                                      Apr-09
                                                                                       Sep-08


                                                                                                         Nov-08



                                                                                                                                    Feb-09
                                                                                                Oct-08


                                                                                                                  Dec-08
                                                           Jun-08




                                                                                                                           Jan-09


                                                                                                                                             Mar-09
Feb-09      9.5395
Mar-09      9.4765
Apr-09     10.5715                                                                       MONTH


                         Table 6 & Figure 8: NAVs of LIC
                         (Source: www.licindia.com)




 Month     NAV
Apr-08     10.5838
May-08     10.4991                                                             IDBI FORTIS
 Jun-08     9.1765                12
  Jul-08    9.3448                10
Aug-08      9.8183                 8
                            NAV




Sep-08      9.0915                 6
Oct-08      7.0785                 4
Nov-08      6.9028                 2
Dec-08      6.9151                 0
 Jan-09     6.6861
                                        Apr-08
                                                  May-08




                                                                                                         Nov-08




                                                                                                                                                      Apr-09
                                                                             Aug-08
                                                                                       Sep-08
                                                                    Jul-08




                                                                                                                                    Feb-09
                                                           Jun-08




                                                                                                                  Dec-08
                                                                                                                           Jan-09


                                                                                                                                             Mar-09
                                                                                                Oct-08




Feb-09      6.5328
Mar-09      6.4605
                                                                                          MONTH
Apr-09      7.7746

                     Table 7 & Figure 9: NAVs of IDBI FORTIS
                         (Source: www.idbifortis.com)


      ICFAI BUSINESS SCHOOL-HYDERABAD                                                                                                        Page 46
Month            NAV
 Apr-08          13.4790
                                                                                            TATA-AIG
 May-08          13.3460                  16
  Jun-08         11.9805                  14
   Jul-08        11.9125                  12
 Aug-08          12.3240                  10




                                   NAV
                                           8
 Sep-08          11.7975
                                           6
 Oct-08          10.1290
                                           4
 Nov-08           9.8400                   2
 Dec-08           9.9140                   0
  Jan-09          9.8000




                                                                                                                                 Jan-09
                                                        May-08
                                                                 Jun-08




                                                                                                      Oct-08




                                                                                                                                                   Mar-09
                                                                                                                                                            Apr-09
                                               Apr-08




                                                                                   Aug-08
                                                                          Jul-08


                                                                                             Sep-08


                                                                                                               Nov-08



                                                                                                                                          Feb-09
                                                                                                                        Dec-08
 Feb-09           9.6675
 Mar-09           9.4175
                                                                                               MONTH
 Apr-09          10.7340

                           Table 8 & Figure 10: NAVs of TATA AIG
                           (Source: www.tata-aig-life.com )

                           COMPANY                               % CHANGE
                           BAJAJ ALLIANZ                                  -43.84%
                           HDFC STANDARD LIFE                             -38.74%
                           ICICI PRUDENTIAL                               -40.98%
                           IDBI FORTIS                                    -38.95%
                           LIC                                            -23.38%
                           TATA AIG                                       -30.13%



                               PERCENTAGE (% ) CHANGE


                   TATA AIG                 -30.13%

                         LIC             -23.38%

                 IDBI FORTIS                       -38.95%

            ICICI PRUDENTIAL                            -40.98%

     HDFC STANDARD LIFE                            -38.74%

              BAJAJ ALLIANZ                              -43.84%


  Table 9 & Figure 11: Percentage changes in NAVs of various companies due to recession


        ICFAI BUSINESS SCHOOL-HYDERABAD                                                                                                        Page 47
PRIMARY DATA ANALYSIS

We have done a detailed survey in Hyderabad city to understand and study the consumer’s
responses. The primary data was collected through questionnaires. This questionnaire was
mainly formulated to target the common man to see his perception and awareness of various
investment options available. The sample size of the survey was 133.Out of these 89 were male
and 45 were female. The sample of respondents was carefully selected covering people in all
age groups and with different backgrounds and occupations. The analysis of these
questionnaires gives us an insight about the mindset of people regarding various investments.
We have also used factor analysis in SPSS to extract the prominent factors influencing the
investments decisions of the customers .Customer preferences as to where they would like to
invest have been studied . Also we come to know about the preferences given by customers
towards various top life insurance companies and their reasons for it. Here we see that most of
the customers invest regularly from quite some time but since the last few months their
investments have come down due to recession and market slowdown. Following is the analysis
of the primary data collected through questionnaires. (Please refer to annexure I)

The sample included respondents from all the age groups out of which people in the age group
18-40 constituted around 70%.


                                   50
                                   45
               NO. OF REPONDENTS




                                   40
                                   35
                                   30
                                   25
                                   20
                                   15
                                   10
                                    5
                                    0
                                           18-30           31-40          41-50           >50

                                                               AGE GROUP


                                   Figure 12: Break-up of respondents between different age groups


The sample of respondents was heterogeneous with people of various occupations right from
government service to ones who were self employed. Out of these people who were working in
private companies constituted round 65%.



              ICFAI BUSINESS SCHOOL-HYDERABAD                                                        Page 48
                                          80%



              PERCENTAGE OF RESPONDENTS
                                          60%

                                          40%

                                          20%

                                           0%




                                                              OCCUPATION


                                          Figure 13: Break-up of respondents by their occupations


Also the customers’ preferences for different forms of savings have been carefully studied. The
main savings instruments generally preferred by customers are bank deposits, fixed deposits,
investments and post office schemes. Out of these Investments has been preferred by around
43% respondents and fixed deposits by around 27%.




                                                           PREFERENCE OF SAVINGS


                                                      6%     12%
                                                                                     Bank Deposits
                                              12%
                                                                                     Fixed Deposits

                                                                                     Investments
                                                                     27%
                                                                                     Post Office Schemes

                                                                                     Others
                                                43%




         Figure 14: Break-up of respondents based on their preferences for various savings instruments




               ICFAI BUSINESS SCHOOL-HYDERABAD                                                             Page 49
When we talk about making investment decisions around 45% respondents considered their
own decision and another 40% respondents considered their family’s opinion before making
any important investment decision.



                  PERCENTAGE OF RESPONDENTS
                                              50%

                                              40%

                                              30%

                                              20%

                                              10%

                                               0%
                                                       Family's Friend's Broker's Own  Any
                                                       Opinion Advice Advice Decision Others
                                                                     DECISION MAKING


             Figure 15: Break-up of respondents based on factors influencing their decision


The various forms of investments generally preferred by customers have been identified as
mutual funds, stocks and shares, insurance products and government bonds. Out of these
around 35% preferred stocks and shares and around 20% preferred insurance products.

                                                                 FORMS OF INVESTMENT
                                                               35%
                                                                             29%

                                                 20%

                                                                                         13%

                                                                                                    5%



                                              Mutual      Stocks and    Insurance   Govt Bonds   Others
                                              funds         Shares       Products


        Figure 16: Break-up of respondents based on preferences for various forms of investment



             ICFAI BUSINESS SCHOOL-HYDERABAD                                                              Page 50
The main reason for people to invest in the insurance products was that they had the
advantage of both life cover and tax benefits apart from other normal benefits.

Talking about the frequency of investment around 45 respondents preferred investing once a
year and another 25% preferred investing 2-3 times a year. It was also noticed that greater
majority of respondents owned an insurance policy. Only 11% of the respondents did not own
an insurance policy.

                                        FREQUENCY OF INVESTMNET


                                    1%                          Once a year
                              14%
                                                                2-3 Times a year
                    15%                           45%
                                                                More than 3 Times a year

                            25%                                 Not Investing (No Idea)

                                                                Not Interested




            Figure 17: Break-down of respondents based on their frequencies of investment




                                        OWN AN INSURANCE POLICY




                                    89%


                                                            11%

                                  Yes                      No


            Figure 18: Break-down of respondents who own/do not own an insurance policy



              ICFAI BUSINESS SCHOOL-HYDERABAD                                               Page 51
                                             Unit Linked Insurance Plans

                         39%


                                                                                  28%
                                         23%



                                                        6%
                                                                    4%



                     High risk        Moderate      Low risk    They are    No idea
                                        risk                      safe


                    Figure 19: Break-down of respondents who rated risk involved in ULIPs




                                                                            LIC
                                 1%     1%                                  ICICI Prudential
                    2%                   3%
                                 2%                                         IDBI Fortis
                 3% 5%                                                      Bajaj Allianz
               7%
                                                                            HDFC Standard Life

                      13%                             63%                   SBI Life
                                                                            Max New York
                                                                            Birla Sunlife
                                                                            Kotak Mahindra
                                                                            Others


    Figure 20: Break-down of respondents who own insurance policies in various life insurance companies


Around 63% respondents felt that there was an amount of moderate to high risk involved with
ULIPs. Around 63% of the respondents owned an insurance policy in LIC which clearly shows
that LIC still continues to be the market leader in as it has been since the last 50 years or so in
spite of the presence various powerful private players which are still finding hard to capture a
major market share. Around 13%b respondents chose ICICI Prudential.




               ICFAI BUSINESS SCHOOL-HYDERABAD                                                 Page 52
Following is the rating (from 1-5, 1-bad, 5-best) given by respondents to the five selected life
insurance companies. Here we can clearly see that LIC has the best rating. The reasons given by
the respondents were that LIC was a public sector company which is well established and has
got loads of experience

                                          1         2               3         4         5

      BAJAJ ALLIANZ

      HDFC STANDARD LIFE

      ICICI PRUDENTIAL

      IDBI FORTIS

      LIC

     TATA-AIG

                           Figure 21: Rating scale selected insurance companies




                                  w      WEALTHSURANCE


                                              No idea             29%

                                        All the above                   42%

                A finacial security and risk coverage         16%

                    A savings plan with good returns     10%

                                      Tax saving plan        3%


                                                        0%          20%           40%       60%



    Figure 22: Break-down of respondents with different perceptions about the term “WEALTHSURANCE”




               ICFAI BUSINESS SCHOOL-HYDERABAD                                                    Page 53
                                                                        71%




                                                  26%
                               3%


                  IDBI Fortis is one of It has a long way to      Don't know
                        the best                  go


         Figure 23: Break-down respondents with various responses about the future of IDBI Fortis


Many people responded that they have no idea about IDBI Fortis or its various products under
the umbrella “wealthsurance”.That is true as it is a new company it has a long way to go as
responded by around 26% of the respondents.

This could be due to the fact that IDBI FORTIS has a limited presence and it has just started its
operations just more than a year ago.

We also have found out the age played an important role in deciding the investing patterns of
the respondents .It was found out that people who were generally in between 18-30 had a
higher tendency to invest quite frequently in a year. The following table and the figure below
show us the results.

        Age             No of               %         Average Frequency of investments per
                    Respondents                                           year

      18-30               49             36.84%                      2.105263158
      30-50               70             52.63%                      1.537313433
      >50                 14             10.52%                      1.461538462
                         133              100%

                 Table 10: Average frequency of investments among different age groups




               ICFAI BUSINESS SCHOOL-HYDERABAD                                              Page 54
                            2.5
                                   2.10
                             2
                                                      1.53
               FREQUENCY    1.5
                                                                 1.46                Average
                             1                                                       Frequency of
                                                                                     investments per
                                                                                     year
                            0.5

                             0
                                  18-30(young) 30-50(middle)       >50(old)
                                                   AGE


                      Figure 24: Average frequency of investments among different age groups


In order to find the relationship between the age of the respondents and their investment
patterns, a chi-square test for independence of attributes was used and results of the test is
shown in the following table:

  Factor                   Calculated χ2           Tabulated χ2           DF        Significance
                               value                   value
  AGE                        2.801856                7.814728             3          Significant at 5% level
                                                                                         of significance

                              Table 11: Age and Frequency of investment (Chi-Square table)


It is noted from the above table that the calculated Chi-square value is less than the table value
and the result is significant at 5% level. Hence, the null hypothesis “the age of the respondents
and frequency of investment” holds good. From the above analysis it is concluded that there is
a close relationship between the age of the respondents and their investment patterns

We have also used factor analysis in SPSS (Statistical Package in Social Sciences) extract most
prominent factors that considered by a consumer before making an investment decision. We
had initially considered 28 factors which can influence a consumer’s investment decision and
we have asked the customers to rate them according to their importance in the questionnaire
(Refer to annexure I).




               ICFAI BUSINESS SCHOOL-HYDERABAD                                                   Page 55
So through the factor analysis the number of factors extracted was 9.KMO (Kaiser-Meyer-Olkin
Measure of Sampling Adequacy) and Bartlett’s test of sphericity were used and for extraction
principle component method had been used. About 75.68% of the information has been
extracted through this test which shows that the results are reliable. The output of the factor
analysis has been included in the annexure. (Refer to annexure II).

Also we can see from below that the KMO coefficient is 0.702. The coefficient always lies
between 0 and 1 and the requirement is that it should not be less than 0.50. So here we can say
this is a good test.

          Kaiser-Meyer-Olkin Measure of Sampling Adequacy.                        .702
          Bartlett’s test of Sphericity :

                                       Approx Chi-Square                          1363.096

                                       DF                                         378

                                       Sig                                        .000


                      Table 12: KMO and Bartlett’s test of sphericity



So following are the nine extracted prominent factors that influence the consumer while
making an investment decision:

      1. Rate of return
      2 .Death benefits and lock in period
      3. Present market scenario and tax benefits
      4. Past performance of the company
      5. Flexible investment options and the risk involved
      6. Amount payable and the after investment service
      7. Opinion of media, friends and acquaintances
      8. Level of knowledge about investment
      9 .Commercials associated with investments


             Table 13: The prominent factors influencing the consumer’s investment decision



              ICFAI BUSINESS SCHOOL-HYDERABAD                                                 Page 56
MERITS AND DE-MERITS OF IDBI FORTIS LIFE INSURANCE COMPANY

We have already discussed the advantages of Wealthsurance products compared to the
products of the other companies. There the advantages were specific to individual products. So
here after the complete analysis of primary and secondary data we have the following merits
and demerits of IDBI Fortis Life Insurance Company in general. Since IDBI Fortis is a new
company not many demerits can be pointed out right now at this stage but we have tried our
best here to point out some major ones.

MERITS

   1. When compared to the other selected insurance companies IDBI Fortis gives a min fixed
      Interest rate for monthly interest account and a min fixed NAV (Net Asset Value) for
      funds under Unit Linked Insurance Plans (ULIPs) at the time of maturity. So here in terms
      of market slowdown and recession the fund value will not come down below a specified
      limit which is not the case with the other companies.
   2. The Fund allocation charges and fund management charges are very low when
      compared to most of the other companies in the market.
   3. The growth of the company has been tremendous in terms of the premiums collected
      and the variety of funds introduced. All this has been done in a very short span of time
      which indicates that there is a great future for IDBI Fortis.
   4. IDBI Fortis offers funds almost to everyone right from a 3 month child to a 70 year old
      elderly person. The variety of funds offered is very vast.
   5. The tie-up of the well known IDBI bank with Fortis International and Federal bank both
      of which are well established and good rated gives the company a greater scope for
      good growth in the future.
   6. All the plans offered by the company especially under ULIPs are really flexible as there
      are no charges charged for switching and a customer can make use of the switching
      facility any number of times he wants to free of charge. Also the premiums payable can
      be decided by the customers themselves according to their feasibility and capacity.

DEMERITS

   1. IDBI Fortis has a limited presence right now so most of the people know nothing about
      the company.
   2. With already around more than 20 private companies in the market it is really a
      mammoth task for IDBI Fortis to establish itself and move forward successfully as it is
      always difficult for any new company to capture the market very early.



              ICFAI BUSINESS SCHOOL-HYDERABAD                                    Page 57
3. Also with LIC still at the helm as the market leader it is really difficult for the company to
   move anywhere closer to it because LIC is the only public sector life insurance company
   and generally people would prefer a public company rather than a private company.
4. The company has to improve its distribution network as its reach to a common man is
   very limited .Also the number of agents working for the company is very less right now
   when compared to the other companies.
5. It is very difficult to convince the customers first because this is a new unknown
   company and secondly there are no part records which normally the customers consider
   seriously to show the company’s performance.
6. Also the company has no funds like SBI Smart ULIPs of SBI, Tata-AIG life invest assure of
   Tata-AIG and Birla Sun life insurance platinum plans of Birla Sun life which offer the
   highest NAV observed during the entire policy term at the time of maturity of the fund
   which are really a great hit among the customers.
7. The variety of funds under IDBI FORTIS has to increase as competitors like ICICI
   Prudential have a larger and better variety of the same.




           ICFAI BUSINESS SCHOOL-HYDERABAD                                         Page 58
POSITIONING

Positioning is the process by which marketers try to create an image or identity in the minds of
their target market for its product, brand, or organization. A product's position is the way the
product is defined by consumers on important attributes - the place the product occupies in
consumers' minds relative to competing products. Positioning is the difference the company
creates for its products relative to the products of the other companies

Not all brand differences are meaningful or worthwhile. Not every difference makes a good
differentiator. Each difference has the potential to create company costs as well as customer
benefits. Therefore, the company must carefully select the ways in which it will distinguish itself
from competitors. A difference is worth establishing insofar as it satisfies the following criteria:
(source: http://www.determan.net/Michele/mposition.htm)

IMPORTANT           The difference delivers a highly valued benefit to target buyers
DISTINCTIVE         Competitors do not offer the difference, or the company can offer it in a more
                    distinctive way.
SUPERIOR     The difference is superior to other ways that customers might obtain the
             same benefit.
COMMUNICABLE The difference is communicable and visible to buyers
PRE-EMPTIVE  Competitors cannot easily copy the difference
AFFORDABLE   Buyers can afford to pay for the difference
PROFITABLE   The Company can introduce the difference profitably


POSITIONING STRATEGIES

There are seven positioning strategies that can be pursued:

             Product Attributes: What are the specific product attributes?
             Benefits: What are the benefits to the customers?
             Usage Occasions: When / how can the product be used?
             Users: Identify a class of users.
             Against a Competitor: Positioned directly against a competitor.
             Away from a Competitor: Positioned away from competitor.
             Product Classes: Compared to different classes of products.




               ICFAI BUSINESS SCHOOL-HYDERABAD                                         Page 59
POSITIONING STRATEGIES OF IDBI FORTIS

At present IDBI Fortis has its presence in 29 cities across India and it has 31 branches overall.
Mumbai has got three branches. Following is the list of all the cities where the company is
operating right now:

                      AHMEDABAD                       MANGALORE
                      BENGALURU                       MUMBAI
                      CALICUT                         NAGPUR
                      CHANDIGARH                      NASHIK
                      CHENNAI                         NEW DELHI
                      COIMBATORE                      NOIDA
                      DEHRADUN                        PUNE
                      GOA                             RAJKOT
                      GURGAON                         SURAT
                      HYDERABAD                       THIRUVUNATHAPURAM
                      INDORE                          UDAIPUR
                      JAIPUR                          VARNASI
                      KOCHI                           VIJAYAWADA
                      LUCKNOW                         VISAKHAPATNAM
                      LUDHIANA

                         Table 14: List of the cities with IDBI Fortis presence


IDBI Fortis has positioned itself quite nicely by offering all the products under one single
umbrella “WEALTHSURANCE”. The Wealthsurance Foundation Plan enables the customer to
save and build wealth to meet his financial goals. However, unlike other investment
alternatives, it also enables him to achieve his wealth goals even in the event of unexpected
death, accidents, disablement or serious illness. Here under WEALTHSURANCE the company
offers all various varieties of plans right from plans for a 3 month baby to plans for elderly
people. Also in all its advertisement campaigns the company has been using the term
“WEALTHSURANCE” extensively. The company has positioned itself in such way the customers
started feeling that Wealthsurance is the solution for all problems.

Some major strategies used by the company

    The name “Wealthsurance” is being marketed very effectively that too with the tag line
     “investment chalta jaye, chahe kuchh ho jaye” which means that the wealth creation
     continues no matter whatever happens. This concept is being well supported by a new
     commercial released by the company being aired on all major channels.



              ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 60
   The company has already created sensation by introducing the term Wealthsurance and
   now it wants to project Wealthsurance is the solution for any kind of problem in life
   insurance.

 The company has also been promoting itself well especially since the past few months.
  It created ripples across India when it became the first insurance company ever to
  sponsor a major cricket tournament singlehandedly when it sponsored the
  Wealthsurance cup between India and Srilanka in Jan-Feb 2009.It made a right decision
  to do so because India is a cricket crazy country and there is nothing better than
  reaching to the people through cricket.

 Also the logo and pictures IDBI Fortis has been using in its advertisement campaigns
  through commercials and printed media have been really good. For example let us talk
  about the most common picture used i.e. that of a peeled orange with its peel by its
  side. The orange wouldn’t grow if the peel hadn’t protected it fruits from all sorts of
  dangers like birds worms etc. The same is with all fruits, nuts and grains or for the
  matter a human embryo. With this the company wants to say the best growth happens
  under a protective cover that just as nature has provided a protective shield for every
  fruit which projects the actual fruit and helps it grow IDBI Fortis acts as a protective
  shield for the investments the customers make and helps the best growth to happen. So
  with new innovative advertising strategies the company has been able to position itself
  as a new company with innovative products. All the punch lines used by the company
  easily attract the customers. Some of the advertising pictures used by the company are
  illustrated below with their taglines:



                                                Protection Guaranteed




                                   Your dreams and aspirations need money to fulfill.
                                           Make a promise to build wealth.




          ICFAI BUSINESS SCHOOL-HYDERABAD                                    Page 61
                                        A wealth building plan protected by insurance.



   u



                                                 Unlimited flexibility and choice




 IDBI Fortis positions itself as one of the top insurance companies in India. It aspires to be
  in the top four in the next five years and in the top 3 in the next seven years from now.

 Although the company has other products like Bondsurance, Homesurance and
  Retiresurance right now it is just focusing on Wealthsurance as it feels that the
  company needs to first capitalize on one particular product initially and latter on can
  diversify.

 IDBI Fortis aims to position itself as an insurance company for all classes. As the
  premiums payable and the plans are flexible according to the customers choices every
  person right from a worker to a high class businessman can purchase a policy. The
  minimum premium payable per month is Rs.1000 which is very affordable by anyone.




           ICFAI BUSINESS SCHOOL-HYDERABAD                                       Page 62
FINDINGS

   There is a great future of the life insurance sector in India as 80% of the Indian
    population is still without life cover and people are just now coming in response to the
    awareness campaigns being carried out by almost all the insurance companies.

   We have found out that age plays a major role in deciding the investment patterns of
    people as generally the younger class of people tend to take more risk and invest in
    various instruments more frequently in a year( 2.10 times a year) when compared with
    the older class of people(1.46 times a year).

   Life insurance Corporation (LIC) of India is the company to be least affected during this
    market slowdown as NAV of its equity growth funds came down just by 23% during this
    major recession.

   Life Insurance Corporation (LIC) of India is still the undisputed market leader as 63% of
    the respondents surveyed owned a policy in it and it has also got a tremendous rating
    of 4.2 out of 5 in the survey conducted.

   A good positive growth is being shown by IDBI FORTIS and even though it is still over
    one year old and has a long way to go it has already started working hard and is trying
    to make competition much tougher.

   All the products of IDBI FORTIS under Wealthsurance are really very good and have an
    edge over most of the products of other major life insurance companies as the plans
    offered by the company are really very flexible.




            ICFAI BUSINESS SCHOOL-HYDERABAD                                     Page 63
RECOMMENDATIONS

   IDBI FORTIS has to improve its distribution network as its reach to a common man is
    very limited .Also the number of agents working for the company is very less right now
    when compared to the other companies

   The company should constantly come out with innovative products as the competition is
    very tough with around 22 companies fighting hard for the market share. Some new
    innovative ideas have been suggested below.
                   An insurance plan for the unborn babies. The premium payment term
                   could be for 6 months and it could start once the fetus is 3 months old
                   inside the mother’s womb. There could be various benefits under this
                   plan for the customers like in case of a premature or a complicated birth
                   the company would bear the expenses till the baby is healthy again
                   through the insurance policy. Also there could be death benefits in case
                   of the death of the baby inside the womb or at the time of delivery. This
                   plan could really be successful as in India there are lot of premature child
                   deaths and if the company comes out with a plan like this very tactfully
                   with some implied conditions it would be the first Indian company to
                   offer insurance to unborn babies.

                    An insurance plan for mentally retarded and physically handicapped
                    people. This might be hard to digest but if at all plans like these are
                    possible and really come out then a good amount of Indian population
                    would really be interested.

                    The company could also come out with a plan for both the husband and
                    wife where automatically the wife gets insured along with her husband
                    when her husband purchases the policy. This could also be the other way
                    round. This could be called the combo family plan. In simple words it
                    means buy one policy and get another free. No other company has done
                    something like this till now.

   As the company is a new company it has to really work hard to get itself promoted. The
    company could start sponsoring major events and conduct talk shows and seminars to
    get noticed. It could also take the help of NGOs. There are many people in India who
    still do not know about the concept of insurance.The company could take this as an
    opportunity by trying to create awareness.


             ICFAI BUSINESS SCHOOL-HYDERABAD                                     Page 64
 The company could start using star personalities for their endorsements especially
  cricket stars and film stars as India is a nation of crazy cricket and film followers and
  there is nothing better than reaching to the hearts of people through cricket.

 The company should come out with some really outstanding and out of the world
  advertisements like the ones Vodafone has released recently which people find it hard
  to forget soon.

 The company should first promote the brand IDBI FORTIS and create a positive
  impression in the minds of the people. In today’s world it is really tough for the
  customer to choose from among a vast list of insurance companies as almost all of
  them offer the same plans .So the company has to be a bit different from others in
  order to stand apart.




          ICFAI BUSINESS SCHOOL-HYDERABAD                                    Page 65
MY EXPERIENCES AND LEARNINGS

My SIP at IDBI FORTIS Life Insurance Company has been an extremely enriching one. My SIP
was divided into two main parts. One was the project work and the other was the promotion of
the company. Since the company is a new company we the students doing our SIP were given
the major job of promoting the company through sales. So apart from the project work I had to
generate sales for the company. Initially we found it very difficult to sell policies as the
company was a new company and no one was willing to buy moreover as we were basically
located at Hyderabad for our SIP it was even more difficult for us as we knew no-one out there.
We faced a lot of hurdles but at the end we took it as a challenge and moved forward. The first
twenty days were really terrifying as I could not sell even a single policy and it was really very
de-motivating but latter on I moved ahead with the experience gained in the first few days
tackling different customers in different ways. Finally when I sold my first policy in the second
week of March I gained confidence and after that I did not look back At the end of my SIP I
generated a sales of over 1.5 lakhs for the company and ended up being one among the
students with the highest sales generated. Though I did not have the opportunity of sitting in
the office and have much corporate exposure I don’t regret it as I got full hands-on on-the field
experience. I got to interact with a lot of customers and in the process learnt of their different
mindsets and the way to deal with each of them differently. Once I was also thrown out of the
house by an angry house-wife when I tried to sell insurance early in the morning to her. It was a
harrowing experience but after that incident I learnt that marketing is all about dealing with
right people at the right time. To summarize my experience in one line I would say that my
experience At IDBI FORTIS was a really great learning experience with a lot of new things learnt
and as I also wish to specialize in marketing this experience is really a big bonus for me.

The Learnings I gained during my SIP are mentioned below:

    I gained a broader perspective about various investment opportunities and the risk
     involved in them.

    I came to know about the various technicalities about the Indian insurance industry.

    Interactions with customers during surveys and sales helped me enhance my marketing
     skills.

    My on- hands on- the- field sales experience was an enriching one teaching me the
     different facets a marketing personnel should posses and the way to deal differently in
     different situations.



               ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 66
 Through this research I enriched my knowledge on various competitive marketing
  strategies adopted b different companies y to survive in a highly competitive market.

 I learnt in a more detailed way about the nature of work existing in the insurance
  industry, the kind of deadlines they have to meet, the kind of pressure and levels of
  stress which they work under and the kind of recognitions given to them after they meet
  or exceed their targets.

 Segmentation, Positioning, Diffrencaition, Communication Mix, Direct selling were all
  the concepts learnt by be in the classroom before but this summer internship really
  helped me practically experience all these.




          ICFAI BUSINESS SCHOOL-HYDERABAD                                   Page 67
CONCLUSION

Here I conclude that the summer internship program, done in IDBI FORTIS Life Insurance
company , for partial fulfillment of the MBA program in ICFAI Business School (IBS)-Hyderabad.
has been completed successfully.

Following are the achievements done during the summer internship from 23th February 2008
to 23th May 2008:

          a. Survey done with interest of IDBI FORTIS has been conducted successfully and
             results are discussed above.

          b. Sales done by me during the time have done great business to the company.

          c. I was one of the Sales toppers with a generated sales of more than 1.5 lakh.

          d. The experience gained during the internship has sharpened my marketing and
             negotiable skills and given me a great on the field experience.




              ICFAI BUSINESS SCHOOL-HYDERABAD                                    Page 68
                             ANNEXURE - I (QUESTIONNAIRE)

                                  QUESTIONNAIRE

(This questionnaire is only of the sake of some research work being done on insurance
companies. Confidentiality would be maintained.)

Name      : _________________________________________________________________

Gender    :      Male        Female      Contact no    : _______________________________

Age Group:

     18-30           31-40            41-50            >50

Qualification:

     Post Graduate            Graduate              12th        < 12th

Occupation:

       Government Service             Businessman            Private Company

       Self Employed                  Any Other (Please specify) ____________________

Your income range (per annum):

       Below 150000                    150000-250000         250000-350000

       350000-450000                  More than 450000

Your savings per year:

       Below 10000                    10000-25000            25000-50000

       50000-100000                   More than 100000

You would prefer savings in which form?

       Bank deposits                  Fixed deposits         Investments

       Post Office schemes            Any other (please specify) _________________________

What do you consider while making an investment decision?

       Family’s opinion               Friends advice         Broker’s advice

       Your own decision              Any other (please specify) _________________________


                 ICFAI BUSINESS SCHOOL-HYDERABAD                                  Page 69
Your opinion about investment:

      Tax Saving                     Good returns              Better future after retirement

      Wealth creation                Any other (please specify) _________________________

Preferably you would like to invest in:

      Mutual funds                   Stocks and shares         Insurance products

      Govt. Bonds & securities       Any other (please specify) _____________________

How frequently do you invest?

      Once a year                    2-3 times a year          More than 3 times a year

      Not investing (no idea)        Not interested

Do you agree that Insurance products are susceptible to very low risk when compared to the
other options for investment?

      Yes                             No                       Don’t know

What do you understand by the term “Wealthsurance”?

      A tax savings plan             A savings plan with good returns

      A financial security and risk coverage for your family               All the above

      I have no idea

Name three insurance companies that come to your mind:

   1. ___________________________________
   2. ___________________________________
   3. ___________________________________

Do you own an insurance policy?

      Yes                       No

If yes in which company? ______________________

According to you what is the amount of risk involved in (ULIPs) Unit Linked Investment Plans?

      High risk                      Moderate risk             Low risk

      They are Safe                  No Idea


               ICFAI BUSINESS SCHOOL-HYDERABAD                                       Page 70
Rate the following insurance companies (on a scale of 1-5):

                       Company                                 Rating
                       IDBI FORTIS
                       ICICI Prudential
                       Life Insurance Corporation of India
                       Bajaj Allianz
                       Max NewYork Life Insurance
                       Tata AIG Life


According to you which is the best insurance company and why?

_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

With the different variety of schemes and unbelievable plans offered by IDBI FORTIS Do you
think IDBI FORTIS is one of the best?
      Yes                 No

  Why?_______________________________________________



Please rate between 1-5 for all the following factors depending on thier effectiveness in
influencing you to make an investment decision.

   1- If the factor has no effect on your preference for the investment option

   2- If the factor has only a slight affect on your preference for investment option

   3- If the factor affects your preference for an investment option

   4- If the factor will strongly affect your preference for the investment option

   5- If the factor will be decisive in your preference for the investment option

                                        Particulars                                     Rating
  Rate of return( The amount which you get in return)
  Extra returns for extra investments
  Returns constant in all conditions (No opportunity for multiple returns)
  Can give huge returns but high risk ( no guarantee of even min returns)


               ICFAI BUSINESS SCHOOL-HYDERABAD                                       Page 71
Tax benefits
Lock in period (Money cannot be withdrawn before a specific period)
Death benefits( Benefits upon your inadvertent death)
Compulsory investment (Mandatory for you to save a specific amount every
year making you get greater amount at maturity date, e.g. Regular premium in
insurance )
Transmission ( The investment option gets transferred to your nominee in case
of any eventuality for example death)
Amount payable can be adjusted later
Amount payable ( Amount that you have to pay for investing)
Amount of charges( Amount deducted for maintenance of your investment etc)
Level of knowledge about an investment option in particular
General level of knowledge about investment options
Level of knowledge to be developed once you start investing
After investment service( Level of advice you get when needed)
Renewal procedure( in case of any discontinuity in payment)
Time to be spent in future
Regulatory authority
Past history& performance of that investment option
Market scenario
Opinion of friends & acquaintances
Opinion of Media
Commercials associated with an investment option
Your past experience in investments.
Political factors( Government policies)
Investment option caters to my group (Retired employees, etc)
Other factors( Known person working in that sector etc)


  --------------THANK YOU SO MUCH FOR YOUR VALUABLE TIME------------------




               ICFAI BUSINESS SCHOOL-HYDERABAD                                  Page 72
 ANNEXURE - II (FACTOR ANALYSIS OUTPUT [SPSS])

                  Factor Analysis
                  KMO and Bartlett's Test

    Kaiser-Meyer-Olkin Measure of Sampling
    Adequacy.                                                 .702

    Bartlett's Test of      Approx. Chi-Square          1363.096
    Sphericity              df                                378
                            Sig.                              .000


                          Communalities

                              Initial      Extraction
                  ROR            1.000           .768
                  ER               1.000        .530
                  RC               1.000        .735
                  HRHR             1.000        .554
                  TB               1.000        .715
                  LIP              1.000        .661
                  DB               1.000        .781
                  CI               1.000        .673
                  T                1.000        .665
                  APA              1.000        .750
                  AP               1.000        .789
                  AC               1.000        .744
                  LK               1.000        .707
                  GK               1.000        .701
                  LKS              1.000        .620
                  AIS              1.000        .727
                  RP               1.000        .689
                  TS               1.000        .755
                  RA               1.000        .689
                  PP               1.000        .623
                  MS               1.000        .612
                  OPNF             1.000        .561
                  OPNM             1.000        .707
                  COM              1.000        .704
                  PE               1.000        .738
                  PF               1.000        .747
                  IO               1.000        .669
                  OF               1.000        .616

           Extraction Method: Principal Component Analysis.




ICFAI BUSINESS SCHOOL-HYDERABAD                                      Page 73
                                         Total Variance Explained

                                               Extraction Sums of Squared        Rotation Sums of Squared
                  Initial Eigenvalues                    Loadings                        Loadings
                        % of     Cumulative              % of     Cumulative              % of    Cumulative
Component   Total    Variance         %       Total    Variance      %         Total    Variance      %
1           4.467     15.955        15.955    4.467     15.955       15.955    2.925     10.447        10.447
2           3.481     12.433        28.389    3.481     12.433       28.389    2.908     10.385        20.831
3           2.612       9.328       37.716    2.612      9.328       37.716    2.499      8.926        29.757
4           1.882       6.722       44.438    1.882      6.722       44.438    2.412      8.614        38.371
5           1.799       6.424       50.863    1.799      6.424       50.863    2.167      7.741        46.112
6           1.547       5.525       56.387    1.547      5.525       56.387    2.076      7.413        53.526
7           1.290       4.607       60.994    1.290      4.607       60.994    1.462      5.223        58.749
8           1.137       4.059       65.053    1.137      4.059       65.053    1.407      5.023        63.772
9           1.016       3.629       68.683    1.016      3.629       68.683    1.375      4.911        75.683
10           .868       3.100       71.783
11           .835       2.982       74.765
12           .713       2.545       77.310
13           .701       2.503       79.813
14           .681       2.433       82.246
15           .602       2.150       84.396
16           .543       1.939       86.334
17           .515       1.838       88.173
18           .476       1.699       89.872
19           .421       1.504       91.376
20           .395       1.410       92.786
21           .347       1.239       94.025
22           .310       1.106       95.131
23           .284       1.014       96.145
24           .266        .950       97.095
25           .246        .878       97.973
26           .211        .754       98.727
27           .191        .682       99.409
28           .165        .591      100.000

                            Extraction Method: Principal Component Analysis.




               ICFAI BUSINESS SCHOOL-HYDERABAD                                               Page 74
                                                       Scree Plot


             5




             4
Eigenvalue




             3




             2




             1




             0


                 1   2   3   4   5   6   7   8   9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

                                                      Component Number




                 ICFAI BUSINESS SCHOOL-HYDERABAD                                                    Page 75
                              Component Matrix(a)

                                                Component
       1       2           3           4           5           6          7       8          9
ROR     .058   -.043        .127       -.162        .123       -.100       .729   -.264       .307
ER      .052    .365        .002        -.014       -.182      -.261       .416    .094      -.332
RC     -.324   -.577        .077         .267       -.079       .217       .086   -.374      -.137
HRHR    .261   -.303        .193         .297       .291        .423      -.046    .041       .037
TB      .455   -.674        .088         .158       .105        .076      -.066   -.005      -.026
LIP     .618   -.086        .077        -.085       -.003      -.496      -.066    .083       .019
DB      .622   -.480        .161         .051       -.138      -.316      -.053   -.094      -.071
CI      .682    .044       -.404         .180       .048       -.004       .057   -.048      -.046
T      -.573   -.084       -.176         .234       -.382      -.046       .122   -.178       .221
APA    -.726   -.249        .010         .098       .143        .281       .170    .153      -.013
AP     -.429    .166        .567        -.314       .068       -.005      -.086    .081      -.371
AC      .297    .388        .432        -.027       .543       -.125      -.085    .021       .000
LK      .439   -.243       -.072        -.087       -.588       .233       .050   -.076       .183
GK      .675   -.187       -.330        -.066       .121        .242       .080    .122      -.040
LKS     .349   -.087       -.453        -.465       -.120      -.013       .092   -.197      -.083
AIS     .082    .216        .618        -.146       -.413      -.032      -.033    .038       .309
RP      .272    .435       -.262        -.169       -.179       .437      -.323    .021       .025
TS      .337    .489        .338         .462       -.049      -.150      -.037   -.096       .197
RA     -.162    .092       -.647        -.012       .467       -.060       .070   -.089      -.031
PP     -.186   -.277        .117        -.540       .366       -.010       .192   -.126       .139
MS      .273   -.190        .431        -.323       .127        .274       .137    .216       .235
OPNF    .131    .447        .174         .328       .022        .114       .161   -.359      -.194
OPNM   -.200    .194       -.288         .369       .276       -.079      -.018    .293       .491
COM     .353    .192       -.166        -.029       -.155       .103       .414    .544      -.114
PE     -.384   -.403       -.180         .251       -.135      -.494       .022    .263      -.044
PF     -.354    .677       -.200        -.152       -.242       .184       .072    .052       .009
IO      .400    .562        .035         .284       .161        .098       .179   -.201      -.055
OF      .067   -.268        .305         .407       -.097       .265       .287    .268      -.217

                       Extraction Method: Principal Component Analysis.

                                   a 9 components extracted.




          ICFAI BUSINESS SCHOOL-HYDERABAD                                          Page 76
                                          Rotated Component Matrix(a)

                                                 Component
       1       2            3           4           5            6           7       8          9
ROR     .047    .036         .132       -.056       -.008         .053        .119    .852       .025
ER     -.116   -.001         .263        -.061       -.220       -.020        .600    .082      -.165
RC     -.122    .001         -.080       -.523        .462       -.105       -.348    .124      -.281
HRHR    .118    .088         .074        .207         .658       -.019       -.212   -.014       .073
TB      .235    .561         -.166       .037         .527       -.026       -.179    .016      -.077
LIP     .143    .710         .042        .244        -.193        .109        .157   -.004       .039
DB      .213    .812         -.013       -.005        .143        .153       -.016    .011      -.177
CI      .583    .347         .288        .118         .035       -.268        .165   -.089       .091
T      -.113   -.273         -.063       -.723       -.096        .061       -.107    .071       .147
APA    -.388   -.483         -.344       -.278        .345       -.166       -.063    .126       .070
AP     -.650   -.265         -.104       .245        -.055        .216        .037   -.043      -.415
AC     -.283    .144         .378        .692        -.032        .033       -.046    .081       .103
LK      .651    .158         -.072       -.218        .097        .413        .032   -.002      -.155
GK      .649    .255         -.039       .293         .242       -.212        .150   -.003      -.013
LKS     .563    .127         -.164       .048        -.310       -.211        .069    .144      -.304
AIS    -.096   -.008         .111        .085        -.126        .823        .005    .071      -.012
RP      .527   -.358         .140        .275        -.179        .087       -.036   -.381      -.042
TS     -.062    .167         .707        .108        -.036        .331        .030   -.100       .300
RA      .089   -.161         -.037       .018        -.198       -.750       -.043    .094       .202
PP     -.137   -.045         -.393       .236        -.056       -.098       -.214    .555      -.160
MS      .105    .037         -.225       .453         .305        .392       -.003    .312      -.029
OPNF   -.047   -.123         .721        .005         .052       -.008        .035    .015      -.140
OPNM   -.060   -.165         .021        -.039       -.024       -.185       -.015   -.022       .799
COM     .311   -.042         -.017       .164         .115        .042        .743   -.005       .111
PE     -.351    .284         -.378       -.523       -.018       -.167        .162   -.107       .227
PF      .022   -.692         .159        -.053       -.412        .063        .232   -.108       .031
IO      .160   -.048         .741        .247        -.002       -.068        .144    .034       .072
OF     -.103    .053         .065        -.131        .685        .149        .294   -.031      -.050

                        Extraction Method: Principal Component Analysis.

                       Rotation Method: Varimax with Kaiser Normalization.

                              a Rotation converged in 13 iterations.




          ICFAI BUSINESS SCHOOL-HYDERABAD                                             Page 77
                            Component Transformation Matrix

Component   1       2            3          4          5          6           7       8         9
1           .607    .567          .293       .418       .104       .110       .152    -.034     -.045
2           -.055   -.456         .592       .296      -.486       .082       .252    -.150     .148
3           -.535   .120          .175       .272       .281       .666       -.099   .145      -.202
4           -.146   .142          .527      -.417       .474       -.116      .002    -.297     .425
5           -.291   .031          .044       .592       .183       -.593      -.242   .257      .229
6           .406    -.647         .011       .159       .568       .077       -.172   -.074     -.164
7           .038    -.099         .146      -.200       .184       -.076      .569    .750      -.034
8           -.112   -.046        -.471       .270       .204       .128       .603    -.313     .413
9           .240    -.058        -.102      -.030      -.133       .380       -.357   .367      .709

                         Extraction Method: Principal Component Analysis.

                        Rotation Method: Varimax with Kaiser Normalization.




            ICFAI BUSINESS SCHOOL-HYDERABAD                                           Page 78
   ANNEXURE - III (SCHEDULE OF THE PROJECT)




ICFAI BUSINESS SCHOOL-HYDERABAD               Page 79
REFERENCES

www.idbifortis.com

www.hdfcstandardlife.com

www.licindia.com

www.bajajallianz.com

www.iciciprulife.com

www.tata-aig-life.com

www.irdaindia.org

http://www.scribd.com/doc/11005006/Insurance-Industry-Growth-Chart-Under-Drive-of-
Demand-and-Value-Recommended20090121

http://www.scribd.com/doc/4996143/OVERVIEW-OF-INSURANCE-SECTOR-INDIA

http://www.scribd.com/doc/7044410/ULIPs

http://www.indiaprwire.com/pdf/pressrelease/200805079347.pdf

http://www.scribd.com/doc/136703/Indian-Insurance-Changing-Trends-and-a-Fresh-
Perspective

http://www.scribd.com/doc/7216240/Understand-ULIP-Insurance

The knowledge times

http://www.financialexpress.com/search/news/ulips+flexible+to+the+core/

http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan002873.pdf

http://wealth.moneycontrol.com/yourstartupkit/ulip/why-invest-in-ulips-/9051/0

http://economictimes.indiatimes.com/Personal-Finance/Insurance/Life-insurance-industry-
targeting-20-pc-growth-in-FY-09/rssarticleshow/4095144.cms

http://www.marketsmonitor.com/Report/IM588_related.htm

http://www.marketsmonitor.com/Report/IM126.htm

http://www.marketsmonitor.com/Report/IM126.htm


               ICFAI BUSINESS SCHOOL-HYDERABAD                                   Page 80
Principles of Marketing-Philip Kotler

Marketing Research-Naresh Malhotra

http://www.determan.net/Michele/mposition.htm

http://www.quickmba.com/marketing/ries-trout/positioning

http://tutor2u.net/business/marketing/brands_positioning.asp

www.ducttapemarketing.com/strategies_for_positioning.htm

http://www.quickmba.com/marketing/research/

http://www.ats.ucla.edu/stat/Spss/output/factor1.htm

http://www.moneycontrol.com/planning_desk/fininvoption.php




              ICFAI BUSINESS SCHOOL-HYDERABAD                  Page 81

								
To top