A COMPREHENSIVE PROJECT REPORT ON COMPARATIVE STUDY OF UNIT LINKED INSURANCE PLAN

PREPARED BY
MITESH V. RAJPUT NADEEMKHAN F.

PATHAN ENROLLMENT NO. 097190592057 ENROLLMENT NO. 097190592049 MBA (FINANCE) MBA (FINANCE)

SUBMITTED TO
INDU MANAGEMENT INSTITUTE SEVASI KOYALI ROAD ANKODIA VADODARA 391330
[AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY]

GUIDED BY FACULTIES OF FINANCE

MS. HARSHITA SAMRANI MR. DIVYESH PATEL

DECLARATION
We Mr. Mitesh V. Rajput & Mr. NadeemKhan F. Pathan MBA 4th sem students from Indu Management Instittute, Vadodara we here by assure that our grand project work on comparative study of unit linked insurance plan is being done in the fulfilment of MBA programme of Gujarat Technological University as a part of completion of our practical study. So far as concern subject matter of honesty there is no duplication in our project as we here by declaring that work is done by gathered sincere efforts.

PROJECT PARTNERS

MITESH V. RAJPUT ENROLLMENT NO. 097190592057 MBA (FINANCE)

NADEEMKHAN F. PATHAN ENROLLMENT NO. 097190592049 MBA (FINANCE)

Place: Vadodara Date:

ACKNOWLEDGEMENT
We would like to thank my faculty guide, Ms. Harshita Samrani & Mr. Divyesh Patel, for all their valuable inputs and constant support towards our throughout my project and providing us an opportunity to learn outside the class room. It was a truly wonderful learning experience. We would like to dedicate this project to our parents. Without their help and constant support this project would not have been possible. We would like to thank all our friends who did their Grand Project on insurance sector for giving their valuable suggestions and support. Last but not the least we would like to thank all the respondents who offered their opinions and suggestions and sometimes critical views throughout the survey which made us constantly update ourselves come out with a successful project.

TABLE OF CONTENTS
SR. NO.
1 2 3 INTRODUCTION ABSTRACTS OF STUDY ABOUT INSURANCE A) CHARACTERISTICS OF INSURANCE B) HISTORY C) INSURANCE MARKET AT PRESENT D) ABOUT LIFE INSURANCE E) LIST OF INSURANCE COMPANIES IN INDIA F) THE MARKET SHARE OF INDIAN LIFE INSURANCE INDUSTRY ABOUT UNIT LINKED INSURANCE PLAN A) STRUCTURE OF ULIP B) TYPE OF FUND UNDER ULIP C) ADVANTAGES OF ULIP D) FACTOR INFLUENCING THE BUYING OF ULIP LITERATURE REVIEW A) TYPES B) SOURCES OF DATA I) PRIMARY DATA II) SECONDARY DATA NEED, OBJECTIVES & LIMITATION OF STUDY RESEARCH METHODOLOGY THE STUDY INCLUDING SECONDARY DATA ANALYSIS A) ULIP OF IDBI FORTIS B) ULIP OF TATA AIG C) ULIP OF BAJAJ ALLIANZ D) ULIP OF LIC OF INDIA E) ULIP OF HDFC STANDARD LIFE F) ULIP OF ICICI PRUDENTIAL LIFE G) PERFORMANCE OF ULIP UNDER SELECTED COMPANIES (NAVs) THE STUDY INCLUDING PRIMARY DATA ANALYSIS A) RESPONDENTS BETWEEN DIFFERENT AGE GROUP B) RESPONDENTS BY THEIR OCCUPATION C) RESPONDENTS BASED ON THEIR PREFERENCE FOR VARIOUS SAVING D) RESPONDENTS BASED ON FACTORS INFLUENCING THEIR DECISION E) RESPONDENTS BASED ON PREFERENCE FOR VARIOUS FORMS OF INVESTMENTS F) RESPONDENTS BASED ON THEIR FREQUENCY OF INVESTMENTS G) RESPONDENTS WHO OWN/DO NOT OWN AN PARTICULARS PAGE NO.

6 7 8

INSURANCE POLICY H) RESPONDENTS WHO RATED RISK INVOLVED IN ULIP I) PREFERENTIAL BIFURCATION OF INVESTMENT J) RATING SCALE OF SELECTED INSURANCE COMPANIES K) PERCEPTION ABOUT THE TERM WEALTH ASSURANCE OF RESPONDENTS 10 FACTS & PERFORMANCE OF IDBI FORTIS A) MERITS B) DEMERITS C) POSITIONING STRATEGIES FINDINGS RECOMMENDATION OUR EXPERIENCE LEARNING CONCLUSION REFERENCES APPENDIX (QUESTIONNAIRE)

11 12 13 14 15 16

EXECUTIVE SUMMARY
True learning is born out of experience and observations. Practical experience is one of the best types of learning as this report is practical efforts which flashes throw on comparative study of unit linked insurance plan of major leading players of an insurance sector.

This grand project report contains analysis of comparative study of above presented topic it makes us to know about investors perception about insurance products rather than other scopes of investments as well as scope or scenario of insurance sector within an economy.

Practical analysis in supplement of theoretical study is there to interpret the result there of that which directs or focuses on matters where efficient corrective steps are needed.

INTRODUCTION

WHAT IS PRACTICAL STUDY? True learning is born out of experience and observations when applied is called practical study. Practical experience is one of the best type of learning that one can remember aspects of administration and management.

WHY IT IS NECESSARY? The main objective of practical training is to develop practical knowledge and awareness about industrial environment and business practices in the students as a supplement to theoretical studies of administration and management in specific area like finance, marketing, human renounce management etc.

WHAT IS THE IMPORTANCE BEHIND IT? Practical training bridges the gap between theoretical and practical knowledge. Such studies are very informative and it also enlightens the industrial background for management studies.

ABSTRACT OF STUDY
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. The different selected companies on which the project is entirely focused are namely: 1. 2. 3. 4. 5. ICICI PRUDENTIAL BAJAJ ALLIANZ TATA AIG LIFE LIFE INSURANCE CORPORATION OF INDIA 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 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 Vadodara 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 200.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.

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

ABOUT 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. 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 wellrecognized 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%. 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). 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 nonlife 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. 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. 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). 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. 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.

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 23. STAR UNION DAI ICHI LIFE

The list of life insurance companies in India

The market share of the Indian Life Insurance industry

SOME OTHER CRITICAL FACTS 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 enterprises 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 50% 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 10%.

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 todays 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 capital 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.

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 riskaverse 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.

ABOUT 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 todays times ULIP provides solution for all the needs of a client like insurance planning, financial needs, financial planning for childrens future and retirement planning

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. PREMIUM LESS CHARGE

INVESTMENT REPRESENTED AS UNIT

LIFE COVER

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 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 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.

TYPES OF FUNDS UNDER ULIPs

Most insurers offer a wide range of funds to suit ones 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. General description Equity Funds Nature of investments Primarily invested in company stocks with the general aim of capital appreciation. Invested in corporate bonds, government securities and other fixed income instruments Sometimes known as Money Market Funds Risk category Medium to High

Income, Fixed Interest and Bond Funds

Medium

Cash Funds

Low

Balanced Funds

invested in cash, bank deposits and money market instruments Combining equity investment with fixed interest instruments Types of funds under ULIPs

Medium

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. 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: Life protection Investment and Savings Market linked fund based on risk profile Switch option Premium redirection Automatic Transfer Plan(ATP) Tax Planning Flexibility of cover continuance Transparency

 Extra protection with riders Death due to accident Disability Critical illness Liquidity Partial withdrawals during the term
At maturity

Variable investment options Premium holiday Allow Top-ups

FACTORS INFLUENCING THE BUYING OF UNIT LINKED INSURANCE 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 coeducation 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.

LITERATURE REVIEW
INTRODUCTION:
A literature review discusses published information in particular subject area, and sometimes information in particular subject area within certain time period. It is just simple summary of important information source for the purpose of analysis. It is a guide to a particular topic. If researchers have limited time then literature reviews can give overview or act as a stepping stone.

TYPES:
The researcher must examine all available literature to get him/her self acquainted with the selected problems. Generally there are two types of literature reviews. [1] [2] Conceptual literature concerning the concepts and theories & Empirical literature consisting of study made earlier.

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.

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 we 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 200 and the survey was confined to Vadodara city.

Secondary Data
The secondary data was collected directly from the different companys websites and secondary data available in different business standard news.

SCOPE OF THE STUDY

This study aims to make a comparative study of the Unit Linked Insurance Plans (ULIPs) of 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 Vadodara city.

OBJECTIVES OF THE PROJECT

1. To compare the Unit Linked Insurance Plans (ULIPs) of some selected

companies. 2. To identify the strengths and weaknesses areas where focus more and improve upon. 3. To study the consumer perception towards various insurance products.

LIMITATIONS OF THE STUDY

1. 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 Vadodara. 2. The scope of the project is limited to conceptual and marketing aspects of Life Insurance Companies and doesnt include Claim Settlement and the underwriting part of the operations which are equally important aspect of learning. 3. 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.

RESEARCH METHODOLOGY
The techniques used for data collection are: A. Secondary data analysis 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 Collection of primary data-Questionnaires and internet surveys Step: 6 Analysis of primary data Step: 7 Interpretation of the results Step: 8 Study of positioning strategies Step: 9 Preparation of the final report

THE STUDY INCLUDING SECONDARY DATA ANALYSIS

UNIT LINKED INSURANCE PLANS (ULIPs) OF IDBI FORTIS

IDBI Fortis Life Insurance Co Ltd is a joint venture between three leading financial conglomerates Indias premier development and commercial bank, IDBI Bank, one of Indias leading private sector banks, Federal Bank and Europes 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. IDBI FORTIS different variety of schemes and a good range of ULIPs under the flagship banner Wealth assurance. There are a lot of other ULIPs under Bond assurance, Home assurance and Retiresurance but as our study is only confined to the study and comparative analysis of ULIPs under Wealth assurance we would just be discussing about the various plans under Wealth assurance. As discussed earlier the Wealth assurance 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 Wealth assurance Foundation Plan can ensure that his plans for wealth creation are achieved by protecting that plan with insurance benefits. Wealth assurance is one of its kind in India. The company offer 11 investment options and 8 protection benefits under the plan apart from tax benefits

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

Min premium payment term Types of funds

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 Wealth assurance of IDBI FORTIS and explain it. 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.

UNIT LINKED INSURANCE PLANS (ULIPs) OF TATA AIG LIFE

TATA AIG OFFERS FOUR DIFFERENT TYES OF ULIPs o INVEST ASSURE CARE o INVEST ASSURE FLEXI o INVEST ASSURE II o INVEST ASSURE EXTRA
INVEST ASSURE CARE
Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term 30 dys 45 yrs 65 12000 5 ADBR,CIBR NM

INVEST ASSURE FLEXI

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term 30 dys 70 yrs 80 15000 7 ADBR,CIBR NM

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

INVEST ASSURE EXTRA

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

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

INVEST ASSURE CARE

I. Through Wealth assurance 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. 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 Wealth assurance 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

INVEST ASSURE II

IV. Wealth assurance has a Premium allocation charge of only 4% as against 50% allocation in this product V. Through Wealth assurance 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. 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. Wealth assurance has a Premium allocation charge of only 4% as against 40% allocation in this product II. Through Wealth assurance 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. 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 Wealth assurance as 0 Years as against the Min Entry age of 15 Years

INVEST ASSURE EXTRA

INVEST ASSURE FLEXI

I. In Wealth assurance the Min Premium amount is only Ten Thousand Rupees in comparison to Fifteen Thousand Rupees in this Product. II. Wealth assurance has a 4% allocation charge where as in this product the allocation charge is 16% III. Wealth assurance has different riders/protection Basket to choose from including Hospital cash benefit which gives money on a daily basis if hospitalized.

UNIT LINKED INSURANCE PLANS (ULIPs) OF BAJAJ ALLIANZ

BAJAJ ALLAINZ OFFERS FIVE TYES OF ULIPs UNIT GAIN PLUS GOLD UNIT GAIN PREMIER CENTURY PLUS NEW UNIT GAIN PLUS PENSION GUARANTEE

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term

UNIT GAIN PREMIER 0 yrs 60 yrs 70 yrs 50000 3 NM 3 yrs

UNIT GAIN PLUS GOLD Min entry age 0 yrs Max entry age 60 yrs Max Maturity age 70 yrs Min premium 12000 No of funds 6 Riders 6(after 18) Min premium payment term 3 yrs CENTURY PLUS 8 yrs 60 yrs 70 yrs

Min entry age Max entry age Max Maturity age

Min premium No of funds Riders Min premium payment term

25000 7 ADBR 3 yrs

NEW UNIT GAIN PLUS Min entry age 0 yrs Max entry age 60 yrs Max Maturity age 70 yrs Min premium 10000 No of funds 7 Riders ADBR,WOP CIBR,FIB,HCB PDB Min premium payment term 3 yrs PENSION GUARANTEE 45 yrs 80 yrs NA 25000-purchase price NM NM NM

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term

ADBR-Accidental Death Benefit Rider, CIBR-Critical Illness Benefit Rider, NM-Not Mentioned, WOP-Waiver of Premium, FIB-Family Income Benefit, HCB-Hospital Cash Benefit, PDB-Permanent Disability Benefit

COMPARITIVE ANALYSIS

UNIT GAIN PLUS GOLD

I. Wealth assurance only has a allocation charge of only 4% in comparison to 15% in this product II. Max Entry age in Wealthsurance is 65 as against 60 of Unit Gain Gold Plus III. Wealth assurance 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 Rupees in comparison to Twenty Five Thousand Rupees of this product. V. In Wealth assurance there is a choice of 5 riders where as in this product only one rider is available I. Wealth assurance only has a allocation charge of only 4% in comparison to 55% in this product II. Max Entry age in Wealth assurance is 65 as against 60 of Unit Gain Gold Plus

CENTURY PLUS

NEW UNIT GAIN PLUS

UNIT GAIN PREMIUM

I. Min Premium in Wealth assurance is only Ten Thousand Rupees in comparison to Fifty Thousand Rupees of this product. II. Max Entry age in Wealth assurance is 65 as against this product which has a cut of 60 years. I. Wealth assurance can be customized for retirement planning. II. Customers can opt for a partial withdrawal without any charges post 3 years from his fund value and use

PENSION GUARANTEE

the money as pension. There is no Tax/Charges on the money withdrawn/taken as pension

UNIT LINKED INSURANCE PLANS (ULIPs) OF LIC OF INDIA

LIC OFFERS THREE DIFFERENT TYPES OF ULIPS MARKET PLUS PROFIT PLUS (RP & SP) FORTUNE PLUS
MARKET PLUS 18 yrs 70 yrs 75 yrs 5000 RP 10000 SP 4 ADBR 5 yrs

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term

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

FORTUNE PLUS 12 yrs 60 yrs 65 yrs 20000

No of funds Riders Min premium payment term

4 ADBR 5 yrs

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

COMPARITIVE ANALYSIS

MARKET PLUS

I. Premium allocation charge is 16.5% in this product where as Wealth assurance has a charge of Max 4%. II. In Wealth assurance there is unlimited switching redirection and partial withdrawal allowed absolutely free of charge. III. There are no riders available in this product as against Wealth assurance 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 Wealth assurance has a charge of Max 4%. II. In Wealth assurance there is unlimited switching redirection and partial withdrawal allowed absolutely free of charge. III. There are no riders available in this product as against Wealth assurance has a host of riders to choose from. I. Min Entry age in Wealth assurance is 0 years as against in this product it is 12 years II. Max entry age in Wealth assurance is 65 years as against in this product it is 60 years only.

PROFIT PLUS (RP & SP)

FORTUNE PLUS

UNIT LINKED INSURANCE PLANS (ULIPs) OF HDFC STD. LIFE

HDFC STANDARD LIFE OFEERS FOUR DIFFERENT TYPES OF ULIPs ENDOWMENT PLUS II ENHANCED LIFE PROTECTION II UNIT LINKED PENSION RP UNIT LINKED PENSION SP ENDOWMENT PLUS II
Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term 18 65 75 12000 7 ADBR,CIBR TERM

ENHANCED LIFE PROTECTION II

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term 18 45 75 12000 7 NO TERM

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

UNIT LINKED PENSION SP Min entry age 18 Max entry age 70 Max Maturity age 75 Min premium NM No of funds 7 Riders NO Min premium payment term TERM
ADBR-Accidental Death Benefit Rider CIBR-Critical Illness Benefit Rider

COMPARATIVE ANALYSIS ENOWMENT PLUS II

I. Min Entry age in Wealth assurance is 0 years as against in this product it is 18 years II. Premium allocation charge is 40% in this product where as Wealthsurance has a charge of Max 4%. III. Min Premium in Wealth assurance is 10000 as against this product. IV. Min Entry age in Wealth assurance is 0 years as against in this product it is 18 years V. Premium allocation charge is 40% in this product where as Wealth assurance has a charge of Max 4%. VI. Min Premium in Wealth assurance is 10000 as against this product. Max entry age in this product is only 45 years where as in Wealthsurance it is 65 years VII. In Wealth assurance after 3 years unlimited partial withdrawals are allowed where as in this product the customer needs to wait till the 5th year.

ENHANCED LIFE PROTECTION II

UNIT LINKED PENSION RP

I. There are no rider available in this product as against Wealth assurance has a host of riders to choose from. II. Allocation charge of 25% on this product and Wealth assurance has a 4% charge. III. Annuity is taxable where as all the funds in Wealth assurance is tax free. Wealth assurance 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 Wealth assurance is 10000 as against this product. I. There is no rider available in this product as against Wealth assurance has a host of riders to choose from. II. Allocation charge of 6% on this product and Wealth assurance 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 Wealth assurance is 10000 as against this product.

UNIT LINKED PENSION SP

UNIT LINKED INSURANCE PLANS (ULIPs) OF ICICI PRU. LIFE

ICICI PRUDENTIAL OFFERS ELEVEN DIFFERENT TYPES OF ULIPs LIFE TIME GOLD LIFE LINK SUPER PREMIER LIFE GOLD LIFE TIME PLUS LIFE STAGE SMART KID CHILD PLAN LIFE TIME SUPER PENSION LIFE STAGE RP PRNSION LIFE STAGE RP LIFE STAGE ASSURE INVEST SHEILD LIFE NEW
LIFE TIME GOLD 0 65 75 20000 7 ADBR,CIBR, WOP 3 yrs

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term

LIFE LINK SUPER

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term 0 65 70 50000 7 NO SP

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term

PREMIER LIFE GOLD 0 65,69 75 10000 7 ADBR,CIBR WORP 3,5 yrs

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term

LIFE TIME PLUS 0 65 75 20000 7 ADBR,CIBR 3 yrs LIFE STAGE 0 65 75 15000 7 ADBR,CIBR LIFE BASED

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term Min entry age Max entry age Max Maturity age

SMART KID CHILD PLAN 0 15 25

Min premium No of funds Riders Min premium payment term

12000 7 ADBR,CIBR WOP 3 yrs

LIFE TIME SUPER PENSION Min entry age 18 Max entry age 65 Max Maturity age 45 yrs vesting age Min premium 15000 No of funds 7 Riders ADBR,CIBR Min premium payment term 3 yrs LIFE STAGE RP PENSION Min entry age 18 Max entry age 70 Max Maturity age 50-80 yrs Vesting age Min premium 15000 No of funds 6 Riders NO Min premium payment term 3 yrs LIFE STAGE RP 0 MAX TERM 75 75 15000 6 ADBR,CIBR 3 yrs LIFE STAGE ASSURE 0 65 75 10000 7 ADBR,CIBR 3 yrs

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term

Min entry age Max entry age Max Maturity age Min premium No of funds Riders Min premium payment term

Min entry age Max entry age Max Maturity age

INVEST SHIELD LIFE NEW 0 65 75

Min premium No of funds Riders Min premium payment term

12000 6 NM 3 yrs

ADBR-Accidental Death Benefit Rider, CIBR-Critical Illness Benefit Rider, NM-Not Mentioned, WOP-Waiver of Premium SP-Single Premium COMPARATIVE ANALYSIS

LIFE TIME GOLD

I. Premium allocation charge is premium based in this product where as Wealth assurance has a charge of Max 4% and with higher premium the allocation charge decreases. II. Min Premium in Wealth assurance is only Rs.10000 as against in this product it is 20000 III. In Wealth assurance there is unlimited switching redirection and partial withdrawal allowed absolutely free of charge. LIFE LINK SUPER I. Premium allocation charge is 20% in this product where as Wealth assurance has a charge of Max 4%. II. Min Premium in Wealth assurance is only Rs.10000 as against in this product it is 20000 III. In Wealth assurance there is unlimited switching redirection and partial withdrawal allowed absolutely free of charge.

PREMIER LIFE GOLD PREMIER LIFE GOLD

I. Premium allocation charge is 12% in this product where as Wealth assurance has a charge of Max 4% II. There are no riders available in this product as against Wealth assurance has a host of riders to choose from. III. In Wealth assurance there is unlimited switching redirection and partial withdrawal allowed absolutely free of charge

LIFE TIME PLUS I. Premium allocation charge is 25% in this product where as Wealth assurance has a charge of Max 4%. II. Min Premium in Wealth assurance is only Rs.10000 as against in this product it is 20000 III. In Wealth assurance there is unlimited switching redirection and partial withdrawal allowed absolutely free of charge.

LIFE STAGE RP

I. Premium allocation charge is 25% in this product where as Wealth assurance has a charge of Max 4%. II. Min Premium in Wealth assurance is only Rs.10000 as against in this product it is 20000 III. In Wealth assurance 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 Wealth assurance has a host of riders to choose from. I. Premium allocation charge is 25% in this product where as Wealth assurance has a charge of Max 4%. II. Min Premium in Wealth assurance is only Rs.10000 as against in this product it is 20000 III. In Wealth assurance 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 Wealth assurance has a host of riders to choose from. I. Premium allocation charge is 20% in this product where as Wealth assurance has a charge of Max 4%. II. Min Premium in Wealth assurance is only Rs.10000 as against in this product it is 12000 III. Wealth assurance can be beautifully customized to be a child plan by just adding wavier of premium.

LIFE STAGE

SMART KID CHILD PLAN

LIFE TIME SUPER PENSION

I. Premium payable in this product is Rs.75000 as against in Wealth assurance it is only Rs.10000 II. There are only two rider available in this product as against Wealth assurance has a host of riders to choose from. III. Allocation charge of 20% on this product and Wealth assurance has a 4% charge. IV. Annuity is taxable where as all the funds in Wealth assurance is tax free. Wealth assurance 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 Wealth assurance it is only Rs.10000 II. There are only two rider available in this product as against Wealth assurance has a host of riders to choose from. III. Annuity is taxable where as all the funds in Wealth assurance is tax free. Wealth assurance 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. I. In Wealth assurance 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. 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 Wealth assurance there will not be any other

LIFE STAGE PR PENSION

LIFE STAGE ASSURE

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

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 bond growth funds. The reason for selecting bond 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 bond growth funds. We have then compared the maximum and minimum NAVs during the period and found out that of which player maximum is showing financial soundness of that particular organization.

NAVs of HDFC Standard Life

NAVs of Bajaj Allianz

NAVs of ICICI Prudential Life

NAVs of LIC

NAVs of IDBI FORTIS

NAVs of TATA AIG

THE STUDY INCLUDING PRIMARY DATA ANALYSIS

PRIMARY DATA ANALYSIS

We have done a detailed survey in Vadodara city to understand and study the consumers 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 200. 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. 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.

Here is the graphical presentation about the response of different age group people as an investor having different perception about investing in insurance.

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%.

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%.

Break-up of respondents based on their preferences for various

savings instruments

When we talk about making investment decisions around 45% respondents considered their own decision and another 40% respondents considered their familys opinion before making any important investment decision.

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.

Break-up of respondents based on preferences for various Forms of investment

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.

Break-down of respondents based on their frequencies of investment

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

Break-down of respondents who rated risk involved in ULIPs

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.

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

Rating scale of selected insurance companies

Break-down of respondents with different perceptions about the term WEALTH ASSURANCE Many people responded that they have no idea about IDBI Fortis or its various products under the umbrella wealth assurance. 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.

MERITS AND DE-MERITS INSURANCE COMPANY

OF

IDBI

FORTIS

LIFE

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. 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 companys 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.

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: IMPORTANT DISTINCTIVE The difference delivers a highly valued benefit to target buyers Competitors do not offer the difference, or the company can offer it in a more distinctive way.

SUPERIOR COMMUNICABLE PRE-EMPTIVE AFFORDABLE PROFITABLE

The difference is superior to other ways that customers might obtain the same benefit. The difference is communicable and visible to buyers Competitors cannot easily copy the difference Buyers can afford to pay for the difference 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.

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 BENGALURU CALICUT MANGALORE MUMBAI NAGPUR

CHANDIGARH CHENNAI COIMBATORE DEHRADUN GOA GURGAON HYDERABAD INDORE JAIPUR KOCHI LUCKNOW LUDHIANA

NASHIK NEW DELHI NOIDA PUNE RAJKOT SURAT THIRUVUNATHAPUR AM UDAIPUR VARNASI VIJAYAWADA VISAKHAPATNAM

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 bhi 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. 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 wouldnt grow if the peel hadnt 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 fulfil. Make a promise to build wealth.

A wealth building plan protected by insurance.

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 Bond assurance, Home

assurance 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.

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 Wealth assurance 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.

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 23 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 fetes is 3 months old inside the mothers 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. 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 todays 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.

OUR XPERIENCES AND LEARNINGS

The Learning we gained during our grand project are mentioned below : We gained a broader perspective about various investment opportunities and the risk involved in them.
We came to know about the various technicalities about the Indian

insurance industry.
Interactions with customers during surveys helped us enhance our

marketing skills.
Through this research we enriched our knowledge on various competitive

marketing strategies adopted by different companies to survive in a highly competitive market.

We 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 sell force work under and the kind of recognitions given to them after they meet or exceed their targets.
Segmentation, Positioning, Differentiation, Communication Mix, Direct

selling were all the concepts learnt by be in the classroom before but this grand project really helped me practically experience all these.

CONCLUSION
At the end we would like to conclude that this grand project was golden opportunity for completion of the portion of practical study fulfilment we learnt a lot apart from theoretical knowledge. It was great honour for we project partners to express our profound gratitude to the Gujarat Technological University for providing such a nice task as the part of study.

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-UnderDrive-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-FreshPerspective 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-insuranceindustry-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.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

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 Qualification: Post Graduate Occupation: Government Service Self Employed Your income range (per annum): Below 150000 350000-450000 Your savings per year: Below 10000 50000-100000 10000-25000 More than 100000 25000-50000 150000-250000 More than 450000 250000-350000 Businessman Private Company Graduate 12th < 12th 31-40 41-50 >50

Any Other (Please specify) ____________________

You would prefer savings in which form?

Bank deposits Post Office schemes

Fixed deposits

Insurance

any other (please specify) _________________________

What do you consider while making an investment decision? Familys opinion Your own decision Friends advice Brokers advice

any other (please specify) _________________________

Your opinion about investment: Tax Saving Wealth creation Good returns Better future after retirement

any other (please specify) _________________________

Preferably you would like to invest in: Mutual funds Stocks and shares Insurance products

Govt. Bonds & securities How frequently do you invest? Once a year Not investing (no idea)

any other (please specify) _____________________

2-3 times a year not interested

More than 3 times a year

Do you agree that Insurance products are susceptible to very low risk when compared to the other options for investment? Yes No dont know

What do you understand by the term Wealthsurance? A tax savings plan A savings plan with good returns All the above

A financial security and risk coverage for your family 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 They are Safe Moderate risk No Idea Low risk

Rate the following insurance companies (on a scale of 1-5) Company IDBI FORTIS ICICI Prudential Life Insurance Corporation of India Bajaj Allianz Max NewYork Life Insurance Tata AIG Life Rating

According to you which is the best insurance company? ______________________________________________________________________________ Why? ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________

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