EXECUTIVE SUMMARY

Boasting of the largest number of operational life insurance policies in the world, the Indian insurance industry has emerged as serious destination in the global insurance market. Until 1999, the business of insurance in India was the exclusive privilege of two states - owned corporations the Life Insurance Corporation of India (LIC) and the General Insurance Corporation (GIC). The government of India took a major step towards liberalization of this industry in March 2000 and brought into effect of the Insurance Regulatory Development Authority Act (IRDA Act). The IRDA Act opened the market by doing away with all entry level restrictions on private insurers. There after, it has been five years consistent growth. While 80% of population remains without life insurance and some of the worlds lowest health and non life insurance cover levels, the potential of the words seventh largest and second most populous country cannot be overlooked. Prospective insurers have lot to gain from the, 312 million middle class consumers in India, who have financial ability to purchase insurance. With only 2.5% of the country insurable population currently insured, the market still need to be tapped effectively.

The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.

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INSURANCE SECTOR
The insurance industry worldwide faces challenges in terms of acts of terrorism, hardening of reinsurance rates and changing global risk architecture. The opening up of the Insurance sector to private players has led to the introduction of a number of new products and the Indian market is one of the fastest growing insurance markets. Insurance business in India is growing at the rate of 15-20%annually and IRDA has estimated that it is currently of the order of Rs.812.50 cr.5 when combined with banking services, it adds about 7% of the countrys GDP.Insurance penetration (i.e., Premiums as percentage of GDP) has increased from 2032% in 2000 to 2.88% in 2003. Like wise, insurance density (i.e., premium per capita) has increased from Rs.435.897 in 2000 to Rs.722.092 in (2003) In line with the economic reforms that were ushered in India in early nineties, the Government set up a Committee on Reforms (popularly called The Malhotra Committee) in April 1993 to suggest reforms in the insurance sector. The Committee recommended throwing open the sector to private player to usher in competition and bring more choice to the consumer. The objective was to improve the penetration of insurance as a percentage of GDP, which remains low in India even compared to some developing countries in Asia. Reforms were initiated with the passage of Insurance Regulatory and Development Authority (IRDA) Bill in1999. IRDA was set up as independent regulatory authority, which has put in place regulations in line with global norms. The state-owned life insurer-LIC, along with 13 private players, mopped up Rs. 65.22 bn in premium in the first four months of this fiscal by selling about 62lakh new policies. And 55lakh new policies have been sold by LIC alone which helped it to make an 8.74% rise in premium income at Rs.49.7 bn during April-July, this fiscal. The entry of many of the global insurance into the Indian market is the form of joint ventures with Indian companies. Some of the key names are Prudential, AIG, New York Life, Allianz, Standard life, Sun Life Canada and Old Mutual.

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The entry of new players has rejuvenated the erstwhile monopoly player LIC, which has responded to the competition in an admirable fashion by launching new products and improving service standards. The new life insurance companies are concentrating on term life policies in the hope that this will be their main stream of business. Private players have an average policy size of Rs.1, 15877,000. The 13 private players have increased their market share to 23.81% from 17.28% in 2004. In the fore front is ICICI Prudential with a market share of 7.12% marketing a 49% growth in business at Rs. 4.64bn.Then comes, BajajAllianz, HDFC Standard, Tata AIG, Birla Sunlife, Max New York and Aviva. The following are the key winds of change brought about by privatization. Market expansion: There has been an overall expansion in the market. This has been possible due to improved awareness levels thanks to the large number of advertising campaigns launched by all the players. The scope for expansion is till unlimited as virtually all the players are concentrating on large cities and towns-expect by LIC to an extent there was no significant attempt to tap the rural markets. New Product Offerings: There has been a plethora of new and innovative product offered by the new players, mainly from the stable of their international partners. Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unitlinked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional money back policies, which is not considered very appropriate for long-term protection and savings. However, there are till some key new products yet to be introduced e.g. health products. Customer Service: Not unexpectedly, this was one area that witnessed the most significant change with the entry of new players.

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There is an attempt to bring in international best practices in service and operational efficiency through use of latest technologies. Advice and need based selling is emerging through much better trained sales force and advisors. There is improvement in response and turnaround times in specific areas such as delivery of policy receipt, policy document, premium notice, final maturity payment, settlement of claims etc. However, there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels. Channels of Distribution: Till four years back, the only mode of distribution of life insurance products was through Agents. While agents continue to be the predominant distribution channel, today a number of innovative alternative channels are being offered to consumers. Some of them are banc assurance, brokers, the internet and direct marketing. Through it is too early to predict, the wide spread of bank branch network in India could lead to banc assurance emerging as a significant distribution mechanism. The low penetration can be explained in terms of non-emphasis on customer awareness, training issues of agent and a low tax base. An increased penetration of the insurance market is possible due to emerging socio economic changes, education and awareness of insurance needs. The industry is set to emerge independents of the normal driving factor of being driven by tax incentives for growth. The entry of new players would increase the insurance density (premium per capita) and the insurance penetration (expenditure for insurance services expressed as a percentage of income). The regulations pertaining to brokers and corporate agents are expected to result in the spread of the level of insurance penetration in India. Indian customers perceive value in tax benefit and saving whereas world wide, insurance is used as a risk cover instrument. For most insurers today, customer service occupies the highest priority. Some insurers have also taken up customer relationship management projects for their customer service centers. With the Insurance industry emerging as a buyers market, providing quality customer service is crucial and IT would play a vital role in doing this.

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The heavy capital investment in terms of the distribution networks, hiring of agents and the long gestation periods of 7-10 years provide entry barriers for the industry. The key industry drivers are related to lifestyle issues in terms of perceiving insurance as a savings instrument rather than for risk cover, need based selling, quality of service and customer awareness. The future growth areas could be term assurance, pension and health insurance. In terms of the distribution channels, there is tremendous opportunity with banks and finance companies and by making the channel IT driven. With increased commoditization of insurance products, brand building is going to play a vital role. A brief history of the Insurance sector The business of life insurance in India in its existing from started in India in the year 1818 with the establishment of the Oriental life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance business. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interest of the insuring public. 1956:245Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs.5crore from the Government of India.

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The General insurance business in India, on the hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the years 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd .set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Associations of India, fames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insuring Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insures Company Ltd. GIC incorporated as a company. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reformsIn 1994, the committee submitted the report and some of the key recommendations Included:

i) Structure

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Government stake in the insurance Companies to be brought down to 50% Government should take over the holdings of GIC and its subsidiaries so that these Subsidiaries can act as independent corporations All the insurance companies should be give grater freedom to operate

ii) Competition Private Companies with a minimum paid up capital of Rs.Ibn should be allowed to enter the industry No Company should deal in both Life and General Insurance through a single entity Foreign companies may be allowed to enter the industry in collaboration with the domestic companies Postal life Insurance should be allowed to operate in the rural market Only one State Level Life Insurance Company should be allowed to operate in each state. iii) Regulatory Body The Insurance Act should be changed An Insurance Regulatory body should be set up Controller of Insurance (Currently a part from the Finance Ministry) should be made independent iv)Investment Mandatory Investments of LIC Life fund in government securities to be reduced From 75%to50% GIC and its subsidiaries are not to hold more than 5% in any company (there Current holdings to brought down to this level over a period of time).

v) Customer Service

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

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

The Insurance Regulatory and Development Authority (IRDA)

In 1999, the IRDS was set up under the IRDA Act. Companies, aspiring to carry on insurance and reinsurance business in India, are required with IRDA, which is the sole authority for granting license to agents. There is neither a restriction on the license numbers that may be granted nor a system of composite license for life and non-life insurance companies in India. Insurance companies are strictly forbidden from dealing with products beyond their scope of license. This implies that, a life insurance company can not sell nonlife insurance and vice versa. Insurance agents are, however, allowed to sell both life and non-life products (composite insurance). In tune with the Indian governments system of checks and balance imposed through sector specific Foreign Direct Investment (FDI) IRDA prohibits 100% foreign ownership of an Indian insurance company. An Indian promoter is required to invest either wholly or team up with a foreign insure, which can own no more than 26% of the shares in any new venture. The Indian

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promoter must then sell the majority of his shares to the Indian public through a public offering after 10 years and retain only up to 26% of the shares that is, the same percentage as that of the foreign investor. IRDA careful in granting licenses and has set up strict standards for all aspects of insurance in India. With the limit on FDI in the sector, the government ensures that state run agencies such as the LIC and GIC can maintain their prominence. In June 2003, the law Commission prepared a paper identifying 13 potential grounds of revision to the Insurance Act and the IRDA Act including merger of relevant provisions of the two acts, as well as harmonization of the Insurance Act with other rules and regulations in the sector. The finance ministry is already working towards comprehensive amendments to the Insurance Act and the IRDA Act, which will further simplify procedural issues. A major indication of the governments efforts to invite Private Indian and foreign insures to invest in the liberalized market is the FDI cap hike announced by the finance ministry in 2004. These changes, however, require formal amendments to the IRDA Act, which are still to be adopted.

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PERCEPTION
Perception is a cognitive process of seeing, receiving, selecting, organizing, interpreting and giving meaning to the environment around us. According to Stephen p. Robins Perception as a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment Two types of factors influence an individuals perception. The internal factors include individuals needs and desires, personality, experience, etc. External factors relate to what is to be perceived and situation. These are size, intensity, frequency, status, etc. Perception being a cognitive process is susceptible to distortions. Nonetheless, attempts made to perceive oneself accurately, improve self-concept, be empathetic, have positive attitudes avoid the common perpetual distortions and communicate openly help improve ones perpetual ability.

INSURANCE
Insurance is a contact between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the occurrence of a certain event. Insurance provides protection against financial loss that could arise due to the occurrence of an unexpected event. The loss to the insurer is paid from the premiums collected from him and other insurer by the insurance company. Insurance has been classified into:

Life Insurance
Begun in 1818, with the establishment of the Oriental Life insurance Company in Calcutta the business of life insurance in India has come along way. The most popular products in this sector are Endowment and Money Back policies. More than 80% of the Indian life insurance business comes from these two products.

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The major Players in the field include: * * * * * * * Birla sun Life Insurance Co.Ltd. Pvt.Ltd. Bajaj Allianz Life insurance Co.Ltd. MetLife India Insurance Co.Pvt.Ltd. Life Insurance Corporation of India Om Kotak Mahindra Life insurance Co.Ltd. HDFC Standard Life Insurance Co.Ltd. Reliance Life Insurance Co.Ltd * * * * * ICICI Prudential Life Insurance Co.Ltd. ING Vysya Life Insurance Co.Pvt.Ltd. Max New York Life Insurance Co.Ltd. SBI Life Insurance Co.Ltd. Tata AIG Life Insurance Co.Ltd. * DaburCCU Life Insurance Company

General Insurance or Non-Life insurance

The non-life sector primarily consists of fire and miscellaneous risk insurance policies. Also, since motor vehicle cover is compulsory in India, it acts as another chief source of business in the non-life sector. Major players in the non-life sector in India include: Allianz Bajaj General insurance Co.Ltd. ICICI Lombard General Insurance IFFCO Tokyo General Insurance Reliance General Insurance Royal Sundaram Alliance Insurance The government of India has made certain insurance contracts compulsory buy legislation such as the Motor Vehicles Act and the Environmental Protection Act. Insurance in India is provided through Public Sector Insurance Companies such as the Life Insurance

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Corporation of India (LIC), the General Insurance Corporation of India and its four subsidiaries, National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company. The passage of the IRDA Bill in 1999 has enabled private sector to carry out insurance business. Life Insurance Life insurance can be divided into two categories depending on the requirement of the insurer. The first category is determined on the basis of premium paying tenure and payment of maturity proceeded while the other is on the of target audience. Insurance determined on the basis of premium paying tenure and payment of maturity proceeds can be categorized into * Whole Life Assurance Plans Term Assurance Plans Annuities

Whole Life Assurance Plan Whole life insurance policies provide insurance cover to an insured person during

his lifetime but the benefits pass on to the nominees. This policy can be availed in the form of limited term payment or whole life payment or through a single premium payment. It is a low cost insurance option and offers good value to the policyholders. A variant of this policy is the limited premium payment term policy that provides the assured person to pay premium during his years and enjoy the cover thereafter. Single premium and double premium are the new variants of limited period whole life plans. * Endowment Plans

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Since the Person paying premium in Whole Life Plan could never benefit from the proceeds of the policy, endowment type policy plans were introduced. These policies provide both an insurance cover and serve as a saving tool. Insurance cover is provided over the period for which the premium is paid. This, not only provides benefits to the insure but also provides insurance cover over the specified time period. With the lapse of the policy period, the insurer is refunded the amount assured along with any bonus, if the policy is a with-profits plan. To overcome the drawback of endowment plans that required premium s to be paid for long periods, Money Back Plan were introduced. The survivor in this case is provided the benefits paid at regular intervals at the end of each assurance period. * Annuity Plans These are assurance plans that provide specific sums at regular intervals during the lifetime of the insurer. Annuity plans are targeted to those persons, who after retirement do not have a regular source of income. The annuity holder pays a lump sum to the annuity provider and can avail fixed or rising annuity that increases every year depending on interest or inflation rates. There are a few annuity options that work in combination with an insurance plan, mainly with endowment type plans. Typically, annuity plans do not return the seed capital back to persons or nominees purchasing the annuity. Annuity can either be perpetual or for a fixed time period.

GENARAL INSURANCE
General insurance has been divided into: Fire Insurance Marine Insurance Miscellaneous (Accident) Insurance General insurance has also been classified into:

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a) Insurance of Person b) Insurance of Property c) Insurance of Interest d) Insurance of Liability

Insurance of Person: This type of insurance involves personal accident insurance and personal accident and sickness insurance.

Insurance of Property: Product s including motor vehicles, aircraft, steamers, cycles, furniture, fittings, jewelry, household item, machinery, goods in transit, stocks of business men etc.can be categorized under the head, property and are eligible for fire insurance, marine hull insurance, marine hull insurance, marine cargo insurance, engineering insurance, crop insurance and aviation insurance.

Insurance of Interest: Insurance of interest generally involves fidelity guarantee insurance and guarantee insurance.

Insurance of Liability: These of liabilities include third party insurance liability insurance and professional indemnities.

Literature review

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POSITIONING OF INSURANCE Needs-based Positioning This is the most commonly understood positioning and based on the differing needs of different group of consumers. This can be done successfully is a company has unique strengths to service a group of customer need better than others. Access-based Positioning Positioning of customers can also be done by the way they are accessible. That is different groups of customers may be accessible in different ways even though they may have similar needs. Access is typically a function of customer geography or customer scale. Assure security and growth based positioning Safety and security based positioning For childrens education and marriage positioning

The business of insurance is related to the protection of the economic value of assets. Every asset has a value. The owner of the assets may suffer a huge loss in case the asset is lost or damaged because of an uncertain event. Insurance is aimed at compensating the financial loss suffered on the happening of an insured event. Insurance cannot prevent the happening of the event; however it can protect a person from the financial losses he may suffer after the happening of the event. The insurance is broadly classified as, a) b) Life Insurance Non-life insurance or General Insurance.

LIFE INSURANCE Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.

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The contract is valid for payment of the insured amount during:

The date of maturity, or Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier. J Rajesh C Jampala and B Venkiteswara Rao( insurance marketing ,April 2005)

in his article Sales promotion in Insurance sector (A study of LIC) asserts that, sales promotion helps in maximizing sales volume and value besides keeping competitors at bay. Sales promotion is generally broken into 3 major categories such as consumer oriented, trade oriented and sales force oriented activities. The consumer oriented promotions are a part of the promotional pull strategy. These promotions include tax benefits, payment of bonus, provision of accidental benefits and higher non medical limits. Tax benefit is one of the major weapons in the arsenal of strategies at the disposal of the corporation to promote sales. The tax saving measure is the greatest mobilize for business for the corporation. Even the Indian consumer has traditionally looked at life insurance as an instrument for tax saving, rather than as a prudent investment decision, or even as a protection device. Another important consumer oriented promotion of LIC is provision of accident and disability benefits offered to the insured. Trade promotional measures of LIC include salary saving scheme besides bringing more occupations under insurance cover, including hazardous occupations. Salary saving scheme is a very successful trade promotion strategy launched by the corporation to tap business from the salaried class. LIC makes an arrangement with the employer to deduct the insurance premium from the employees salary and remit it to the corporation. The basic advantage that the corporation waives 5% additional charge on the scheme, resulting in a great benefit to the policy holders.

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Sales force promotions offer incentives to agents to work with more and more vigor. Sales force promotion steps of the LIC include commission, gifts, advances for the purchase of the cars, club memberships etc. LIC has instituted a system of club membership for its agents. The club membership also enjoys certain privileges such as telephone, provision of stationery, secretarial allowance, concessional loans etc. However sales promotion alone cannot achieve the results for the corporation. (Source: Insurance chronicle, The ICFAI University Press, April 2006) Walter de Oude and Rajagopalan Krishnamurthy (health insurance, Feb 2006) in their article The health insurance industry in India & its growing potential emphasis that ensuring public health is the principal responsibility lay down by the Indian constitution. The central government provides about 15% of the funding needs mostly for national health programs. The family planning and healthcare initiatives of the government have so far effective in reducing birthrates and improving mortality rates. According to the WHO report published in 2002 India ranked 13th from the bottom in terms of public spending on health. Although Indias public spending is low, overall health spending improved due to higher private spending. Currently less than 15% of the Indian population has some kind of health insurance cover. Health insurance remains vastly underdeveloped in India. The state owned companies had little focus upon the developing line of business on a systematic and profitable basis. The health portfolio that had a loss ratio of about 78% in 2003 deteriorated to 98% in the following year. Anyway the Third Party Agreement (TPA) has however given rights to some tension between the healthcare providers and the health insurance companies. (Source: Insurance Chronicle The ICFAI University Press -Feb 2006)

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Jack Burke (Insurance marketing, July 2004) in his article CROSS SELLINGemphasis that people depend on insurance agents or brokers for the selection of and buying of policies related to life, health, automobiles etc. but it has been found that most agents or brokers specialize in selling policies related only to particular field. The statistics showed that the average American had 7.2 insurance policies i.e., selling more than one policy to their client. This can be specified as cross selling or multiline marketing. More policies per client mean lower acquisition cost, higher client retention and greater profit. (Source: Insurance chronicle The ICFAI University Press, July-2005) A.Srujan (Insurance marketing July 2004) in his article Rural insurance market in India States that the growth in the insurance sector is higher than the GDP growth rate of the country. A careful analysis of postal liberalization period suggest that new insurance players made a good start while the existing one maintained consistent growth level. The two segments of Indian insurance market i.e., Urban and Rural have their own characteristic features. The economic growth of the two has not been the same. But there is a fact that most of the new insurance companies started operating from metros and urban. So they got more opportunity to cover by several types of insurance. Moreover due to the better educational status they got awareness about several financial and insurance products. Still there are many opportunities in rural insurance market. Gigantic population, growth in income level of rural population, high saving habits etc. are some plus areas and if we exploit these areas, there in a very good scope for the growth. Government of India makes steps to improve the conditions of the rural area. Janasree Bima Yojna, LALGI etc. are some examples. Government made a tie with LIC and made several scheme for rural people like Siksha Sahayog Yojna, Krishi Shrimik Samajik suraksha Yojna etc. Anyway it is the opportunities not compulsions which would drive the old and new players to rural India and the outcome will be steady and secured economic growth. (Source: The ICFAI University Press, July-2004)

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Rachana Parihar (Insurance marketing, july2004) in her article Bancassurance: challenges & opportunities in India emphasis that Bancassurance symbolizes the convergence of banking & insurance. The term involves distribution of insurance products through a banks branch work. While the bancassurance has become a successful story in Europe, it is relatively a new concept in Asia. The motive behind this also varies. For banks, it is a means of product diversification & a source of additional fee income. Insurance companies see it as a tool for increasing their market penetration and premium turnover. The customer sees it as a bonanza in terms of reduced price, high quality products and delivery at the doorsteps. But, when we think about India there is a huge pool of skilled professionals whether it is banks or insurance companies who may be easily relocated for any bancassurance venture. Most large retail banks engender a greater deal of trust in broad segments of consumers, which they can leverage in selling them personal line insurance Products. Another advantage banks have over traditional insurance distributors is the lower cost per sales lead made possible by their sizable and loyal customer base. Banks also enjoy significant brand awareness within their geographical regions. Banks proficiency in using Technology has resulted in improvement in transaction processing and customer service. But there are also some short comings. The most obstacles to success are the poor human resource management, lack of sales culture within the bank, no involvements by the branch manager, insufficient product promotions etc. Anyway to move beyond products oriented cross selling to customer focused crossed buying requires a holistic approach to bancassurance. Success of a bancassurance requires change in approach, thinking and work culture on the part of everybody involved. (Source: The ICFAI University Press, July-2004)

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Brian D Baetz (Insurance marketing, July 2003) in his article Term insurance sales techniques States that today people need term insurance more than ever, so one should learn to be efficient in its sale. Term insurance enables even those people who could otherwise not be able to afford a sufficient amount of life insurance, to ensure that their family will not suffer financially should they die. He says that he point out to clients the importance of adequate coverage to protect their families. If their income permits, he encourages them to make a coverage permanent life insurance. Scott Menta, ChFC,CFP,CLU, a Met Life agent from Elmsford,NYbelieves term insurance will continue to be sold as a commodity unless the producer can demonstrate that he /she delivers additional value . He works to help buyers understand the products convertibility period, and the kinds of permanent products to which their term insurance can be converted. He believes producers should recommend the appropriate amount of coverage.

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RESEARCH METHODOLOGY
Introduction: Research: - Research is defined as a careful, critical inquiry or examination in seeking facts or principles; diligent investigation in order to ascertain something. Research is essentially a systematic enquiry seeking facts through objective verifiable methods in order to discover the relationship among them and to deduce from the board principles or laws. It is really a method of critical thinking.

RESEARCH PROBLEM
The insurance industry is highly competitive in nature today. Many players are finding through their customers for their different schemes. In this scenario, the companies need to know what the customers ask for and their needs time to time. For this they are doing regular researches and studies on the changing customer perceptions. This research analyze the perceptions and preferences of the public which helps them to gain competitive advantage over their competitors

RESEARCH DESIGN
Research Design: - A researcher attempting to conduct a study should necessarily prepare a plan which will help him to attain his ultimate aim. This plan is the research design. It is a plan for the collection and analysis of data. Research Design can be defined as the planned sequence of the entire process involved in conducting a research study. In this project work, the research design used is descriptive researcher

TYPE OF RESEARCH
Descriptive research: This study follows descriptive research method. A descriptive study involves formulating the objective of the study, defining the population and selecting the sample, designing the methods of data collection and analysis of the data and results. Descriptive studies aim at portraying accurately the characteristics of a particular group or situation.

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A Descriptive study may be concerned with the attitudes or views (of a people) towards anything.

RESEARCH METHODOLOGY
Research methodology deals with the objective of a research study, the method of defining the research problem, the type of hypothesis formulated the type of data collected, methods used for collecting and analyzing the data etc. Methodology includes the collection of primary data and secondary data. Research methodology may be defined as the procedure by which researchers go about their work of describing, explaining and predicting phenomena. It deals with the cognitive processes imposed in research by the problems arising from the nature of its subject matter. Research Methodology is the description, explanation and justification of various methods of conducting research.

DATA COLLECTION METHOD

SOURCE OF DATA Source of data used for the study can be classified into (A) Primary source (B) Secondary source (A) PRIMARY SOURCE Primary data are first hand information and are collected from various sources like: * * * Informal interviews Through Structured questionnaire Observation

(B) SECONDARY SOURCE

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The secondary source consists of readily available datas and is already compiled statistical statements and reports.

Secondary datas are collected from; Business Magazines Internet Annual reports Journals

TOOLS FOR THE ANALYSIS OF DATA

The analysis of data requires advance planning of the research design. The advance planning may cover such aspect as categorization of variable and preparation of dummy tables. The data processing consists of the number of closing related operations like. 1. 2. 3. 4. Editing Classification and coding Transcription Tabulation

In this project researcher used simple averages and percentages for the analysis of the data.

Sampling method
Convenient sampling was used to collect data from the sample. A sample, as the name implies, is a smaller representation of a large as whole. In other words a selection of the population selected from the latter in such a way that they rare representative of the universe is called sample.

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A single member of a population is referred to as population element. When some of the elements are selected with the intention of finding out something about the population from which they are taken, that group of elements is referred as a sample and the process of selection is called sampling. Sample size: The sample consisted of 150 respondents in various parts of Thane District Population: Population refers to the total of items about which information is derived. Population of the study consisted of peoples in various parts of Thane District; the researcher met the various peoples as per the reference given by the organization Sampling unit: The sampling unit consisted of various peoples in Thane District Area of the study: The study was conducted in various parts of Thane District Time period of study: The study was conducted for a period of one month

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1.

Number of people who believe in money planning

Table No: 1 Sl.No 1 2 3 Particulars Yes No Total No. of Respondents 150 0 150 % 100% 0% 100%

Source: Primary data

Chart No: 1
150

100

50

No. Of Respondents 150 0

% 100% 0%

1 Yes 2 No

Interpretation From the information it is found that all respondents believe in money planning and they referred that respondents cannot live with out proper money planning.

2.

Types of money planning

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Table No: 2 Sl.No 1 2 3 4 5 6 Particulars Saving Fixed Deposits PPF Stocks-Debentures Others Total No. of Respondents 63 36 14 10 27 150 % 42% 24% 9% 7% 18% 100

Source: Primary data Chart No: 2

% 50% 40% 30% 20% 10% 0% Saving Fixed Deposits PPF StocksDebentures Others %

Interpretation From the above information it is found that most of the respondents prefer savings as a method for money planning and only a few have Stock, Debentures and PPF.

3.

People who have money planning for their retirement

Table No: 3 Sl.No Particulars No.Of Respondents %

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1 2 3

Yes No Total

104 46 150

69% 31% 100%

Source: Primary data

Chart No: 3
150 100 50 0 No. Of Respondents 104 46

% 69% 31%

1 Yes 2 No

Interpretation From the above illustration it is found that most of them have money planning for their retirement. The government employees and have to contribute a part of their salary to PPF and many people are bothered about their retirement life. Rest of others is not bothered about money planning for their retirement.

4.

Various ways of investment that people do to protect their income after retirement

Table No: 4 Sl.No Particulars No. Of Response %

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1 2 3 4 5 6 7 8 Source: Primary data

Monthly income scheme Savings Bank PPF Stock or Debenture Post office Dont know Total

20 59 14 22 4 28 3 150

13% 39% 9% 15% 3% 19% 2% 100

Chart No: 4
% 50% 40% 30% 20% 10% 0% Monthly income scheme Savings Bank PPF Stock or Post office Dont know Debenture %

Interpretation From the above information it is found that larger portion of the respondents invest in savings account. 5. People arrange cash in case of critical illness/emergencies/accidents

Table No: 5 Sl.No 1 2 3 4 Particulars Medical insurance Relative and friends Dont know Total No. Of Response 48 89 13 150 % 32% 59% 9% 100%

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Source: Primary data

Chart No: 5
%

9% 32% Medical insurance Relative and friends Dont know 59%

Interpretation

From the above information it is found that most of the respondents arrange cash incase of critical illness/ emergencies/accidents from their relatives and friends. Some others are prefer from medical insurance and remaining others opinion was they are not aware about it.

6.

Important to have an education fund for your children

Table No: 6 Sl.No 1 2 3 4 Source: Primary data Particulars Very important Important Not important Total No. Of Response 92 53 5 150 % 62% 35% 3% 100%

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Chart No: 6
%

3% 35%

Very important Important 62% Not important

Interpretation From the above information majority of a respondents had answered education fund is very important. Some of them opinion was important and rest of others answered it is not at all important.

7.

Important to have marriage fund for your children

Table No: 7 Sl.No 1 2 3 4 Source: Primary data Chart No: 7 Particulars Very important Important Not important Total No. Of Response 40 91 19 150 % 27 % 60 % 13% 100%

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13%

27% Very important Important Not important

60%

Interpretation From the above observation it was found that majority of the respondents opinion was marriage fund for their children is important and remaining ones said it is not important to have a marriage fund for their children.

8.

People awareness about insurance

Table No: 8 Sl.No 1 2 3 Source: Primary data Particulars Yes No Total No. Of Response 150 0 150 % 100% 0% 100%

Chart No: 8

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0%

Yes No

100%

Interpretation From the above information it is found that all respondents are aware about insurance and no one said they are not aware about the insurance.

9.

Need of Insurance for your family

Table No: 9 Sl.No 1 2 3 Source: Primary data Particulars Yes No Total No. Of Response 143 7 150 % 95% 5% 100%

Chart No: 9

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5%

Yes No

95%

Interpretation From the above illustration it is found that majority of the respondents said insurance is needed for the family and rest of others said insurance is not needed for the family.

10.

People awareness about the benefit of a good insurance plan

Table No: 10 Sl.No 1 2 3 Source: Primary data Particulars Yes No Total No. Of Response 52 98 150 % 35% 65% 100%

Chart No: 10

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35% Yes No 65%

Interpretation

Majority of the respondents are aware about the benefit and rest of others are not aware about the benefits of good insurance plan.

11.

People who likes to make a representative calls on the ideas

Discussed above Table No: 11 Sl.No 1 2 3 Source: Primary data Particulars Yes No Total No. Of Response 63 87 150 % 42% 58% 100%

Chart No: 11

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42% Yes No 58%

Interpretation From the above it is found that larger number of respondents not like discuss the ideas and remaining others like to discuss the ideas mentioned in the above question.

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FINDINGS
As a part of the data collection for the work A Study on Peoples perception towards Insurance Researcher had approached 150 people from various parts of Thane District including Karunagappally, Sasthamcottah, Chavara and Thane. A structured questionnaire is used for data collection. Based on data collection, data analysis and interpretation is done and the following findings are to be made.

Majority of people were in the opinion that have Money planning Most of the people prefer Savings as an important type of money planning and many of the makes a portfolio of savings, Fixed Deposits, PPF. People who have money plan for their retirement is less because they hire loans from Financial Institutions with less paper works and after that life is moving on credit. Those who have money plan for retirement prefer investment in Post office, PPF, Saving s because they are the traditional method that are followed and they are owned by government. People arrange cash from Relatives and Friends in case of Emergencies, illness and accidents and some of them take medical insurance and some of them go for loans and it can be reimbursed. Majority of people suggest that it is very important to have an education fund for their children It is important to have a marriage fund for their children but it is not very important because of the changing social system

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 Majority of the people are aware about the insurance and insurance products. Majority suggest that Insurance is needed for the family incase of retirement life, illness, Education and for meeting the uncertainties in future. Even though there are large number of Insurance companies and Insurance Products many people are not aware about the benefits and various schemes Some of the people that I surveyed are interested in Knowing various new schemes and benefits of insurance.

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SUGGESTIONS

Insurance companies must try to each the customers through tangible clues and make them aware about the scheme and benefits. The degree of customer contact and seller interface plays a significant role in insurance marketing. The scope for expansion is still unlimited for all the insurance players because they are concentrating on large cities and town expect by LIC to an extent there was no significant attempt to tap the rural markets. Web-based Relationship Marketing in collection of premium and distribution of the amount to reduce the time lag and e-mails and availability for understanding the current position of the customer about their Insurance Fix service standards for the agents and brokers and make a decent apology in case of service failure. The companies must concentrate on Vision, Values& Culture, Strategies &Goals, structure & Roles, Key Performance Indicators (KPI) that entails multiple learning, Rapid Improvement Strategy-Enables initiate change, when required. The advantage of Insurance benefits is high for the people who started investing from the early age. There is an emergence of Hyper-competition in Insurance market, one way to retain success is to develop a holistic Brand Relationship Management (BRM)

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 Introduce the concept Octagonal Marketing it encompasses all finer aspect of customer management which can result in greater profits through customer satisfaction. Octagonal marketing gives better edge to companies in not only maximizing customer satisfaction but also in retaining them. It includes providing customer a product which is more acceptable to him, Affordable nearest to consumers, Relationship through product&

product Available at service.

There has been a plethora of new and innovative products offered by the new players, Customers have tremendous choice including pure term (risk) insurance to unit-linked investment products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs traditional money-term protection and saving new products. So there are still some key new products yet to be introduced e.g. Health products.

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CONCLUSION
The main objective of the study is for understanding the peoples perception towards insurance and to understand insurance market in India and to an extent, correct or verify knowledge regarding insurance. In this project work A Study on people Perception towards Insurance, the study has touched an overview of the perception of people towards insurance there is an In-depth study are required in the following subjects. The role of private insurance companies in insurance market The concept of octagonal Marketing and its implementation in Insurance The role of Brand relationship Management and value of Brand in marketing Understand the customers needs and development of product Study of response about the existing product

It will give me great satisfaction if someone after reading my project encourages in doing an in-depth study of the above set concept.

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QUESTIONANAIRE
[I am Aswin.M.S, student of MES College of Engineering, Kuttippuram, Malappuram conducting a survey on A Study on peoples Perception towards Insurance] RESPONDENT DETAILS

Name :

Profession

:..

Sex : Annual income:.. Age : Marital status :.. Family size :.. Location :

Q1. Do you believe in money planning? Yes No

Q2. How do you do your financial planning? Saving PPF Fixed Deposit Stock-debentures Others .

Q3. (A) Do you have a money plan for your retirement? Yes No

If No Skip to Question No: 4 (B) what would you do you protect your income after your retirement? Monthly income scheme Bank PPF Post office Savings Fixed Deposit Stock & Debentures Dont know

Others (Please specify).

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Q4.How would you arrange for cash if you had critical illness /Emergency/Accident? Medical insurance Dont know Relative and friends Others (Please specify)

Q5.How important is to have an education fund your children? Very Important Not important Important Others (Please specify)

Q6. How important is to have a marriage fund for your children? Very Important Not important Important Others (Please specify)

Q7. Do you know what is insurance? Yes No

If No skip to Question No. 10 Q8. Do you think insurance is needed for the family? Yes No

Q9. Would a good insurance plan benefit your family? Yes No

Q10. Would you like a representative call on to you to discuss any of the ideas mentioned above? Yes No

[THANK YOU FOR YOUR TIME AND CO-OPERATION]

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