CHAPTER I INTRODUCTION

1.1 COMPARITIVE STUY OF TRADITIONAL PROUCTS AND ULIP PROUCTS

TRADITIONAL PRODUCTS

Traditional insurance plans, which include term, endowment and whole life policies, offer multiple benefits in terms of risk cover, return, safety and tax benefit. Traditional policies are considered risk-free, as they provide fixed income returns in case of death or maturity of the policy. Investment guidelines also ensure safety of funds with a cap on equity investment. Here are some of the reasons why traditional life insurance plans are the answer to the apprehensions and challenges faced by consumers and the Life Insurance industry.

The interest of the company and the customer are aligned: In participating products the life insurance company can make margins only when the customer makes margins and to that extent the interest of the company and the customer are aligned. As per the insurance law, the company can retain only 1/10th of the profits with 9/10th of the profits shared with the customers. This is colloquially known as the 90/10 rule in the industry. Put simply if the company makes Rs 100 as profits, Rs 90 (approximately) has to be given to the customer first.

Investment risk is managed better in Traditional products: In Unit Linked products the investment risk lies with the customer. But most customers do not fully appreciate the risks involved in such products. In traditional participating products the investments are managed by the company in a prudent manner. This works out to the advantage of a passive investor as there are investment guarantees built into the product design. Not only are investments done in a more conservative manner, the dividends are also 'smoothed' and declared in a steady fashion.

Traditional Insurance is closer to Protection: Right from the sale when the premium is a function of the sum assured to the bonus declaration which also adds to increased growth of protection component within the policy, traditional insurance is closer to protection than ULIPs wherein protection element of the policy, in most cases is more or less constant or subject to vagaries of the market and fund value.

The chances of mis-selling are much lower: Traditional participating plans offer in-built guaranteed benefits hence the give and get equation is fairly simple to comprehend which significantly reduce the risk of mis-selling. Unlike ULIPs these products are sum assured based and not market linked products leaving much less scope for speculative selling and buying behavior.

In a nut shell World over Traditional Par Insurance is much more popular than ULIPs and its variants. Customers in western markets who have seen market swings empty out retirement funds have come to appreciate the 'risk-return spectrum' of insurance plans as well as the difference between investment and savings. Traditional plans provide the dual advantage of guaranteed returns and protection for long term savings to consumers. This is why traditional participating products are recognized as ideal vehicles for long term savings and protection, even in the Indian context.

ULIP PRODUCTS

A ULIP is a market-linked insurance plan. The difference between a ULIP and other insurance plans is the way in which the premium money is invested. Premium from, say, an endowment plan, is invested primarily in risk-free instruments like government securities and AAA rated corporate paper, while ULIP premiums can be invested in stock markets in addition to corporate bonds and government securities. So what else apart from this reason makes ULIPs so attractive to the individual? Here, we have explored some reasons, which have made ULIPs so irresistible.

Transparency However, ULIPs offer a transparent option for customers to plan their various life stage needs through market-led investments as compared to traditional investment plans.

Insurance cover plus savings ULIPs serve the purpose of providing life insurance combined with savings at market-linked returns. To that extent, ULIPs can be termed as a two-in-one plan in terms of giving an individual the twin benefits of life insurance plus savings. This is unlike comparable instruments like a mutual fund for instance, which does not offer a life cover.

Multiple investment options ULIPs offer variety than traditional life insurance plans. So there are multiple options at the individual's disposal. ULIPs generally come in three broad variants: Aggressive ULIPs (which invest 80%-100% in equities, balance in debt). Balanced ULIPs (invest around 40%-60% in equities). Conservative ULIPs (invest upto 20% in equities). Although this is how the ULIP options are generally designed, the exact debt/equity allocations may vary across insurance companies. A ULIP policyholder has the option to invest in a variety of funds, depending on his risk profile. If one does not have the appetite to invest in equity, they can choose a debt or balanced fund.

Flexibility Individuals can switch between the ULIP variants outlined above to capitalize on investment opportunities across the equity and debt markets. Some insurance companies allow a certain number of free' switches. This is an important feature that allows the informed individual/investor to benefit from the vagaries of stock/debt markets. For instance, when stock markets were on the brink of 7,000 points (Sensex), the informed investor could have shifted his assets from an Aggressive ULIP to a low-risk Conservative ULIP. Switching also helps individuals on another front. They can shift from an Aggressive to a Balanced or a Conservative ULIP as they approach retirement. This is a reflection of the change in their risk appetite, as they grow older.

Works like a SIP Rupee cost-averaging is another important benefit associated with ULIPs. Individuals have probably already heard of the Systematic Investment Plan (SIP), which is increasingly being advocated by the mutual fund industry. With an SIP, individuals invest their monies regularly over time intervals of a month/quarter and don't have to worry about `timing' the stock markets. These are not benefits peculiar to mutual funds. Not many realize that ULIPs also tend to do the same, albeit on a quarterly/half-yearly basis. As a matter of fact, even the annual premium in a ULIP works on the rupee cost-averaging principle. An added benefit with ULIPs is that individuals can also invest a one-time amount in the ULIP either to benefit from opportunities in the stock markets or if they have an investible surplus in a particular year that they wish to put aside for the future. When you're buying a ULIP, make sure you select one that works well for you. The important thing is to look for and understand the nuances, which can considerably alter the way the product works for you.Take the following into consideration:

Charges: Understand all the charges levied on the product over its tenure, not just the initial charges. A complete charge structure would include the initial charges, the fixed administrative charges, the fund management charges, mortality charges and spreads, and that too, not only in the first year but also through the term of the policy.

Fund Options and Management: Understand the various fund options available to you and the fund management philosophy and objectives of each of them. Examine the track record of the funds and how they are performing in comparison to benchmarks. Who manages the funds and what experience do they have? Are there adequate controls? Importantly, look at how easily you can access information about your fund's performance when you need it -- are their daily NAVs? Is the portfolio disclosed regularly?

Features: Most ULIPs are rich in features such as allowing one to top-up or switch between funds, increase or decrease the protection level, or premium holidays. Carefully understand the conditions and charges associated with each of these. For instance, is there a minimum amount that must be switched? Is there a charge on the same? Must you go through medical underwriting if you want to increase the sum assured?

Company: Last but not least, insure with a brand you can trust to honour its commitment and service you according to your requirements

First and foremost, investors need to understand that a ULIP is a bundled product of their investments and their insurance proceeds. Since privatization in 2000 and the introduction of ULIPs as a life insurance product category, the overall insurance penetration in the country has grown from around 2% to 4%. Today, more than 70 per cent of the new business premium for life insurers comes from Ulips.

All Ulips have several funds in which your money can be put to work, much like a mutual fund. Assuming that you choose the growth or the equity plan, ask for the NAV performance for the last two years at least. Choose three with the highest performance track record with the benchmark. Now choose the best performing policy in terms of returns with the lowest cost.

1.2 INSURANCE INUSTRY PROFILE

Life is a roller coaster ride and is full of twists and turns. You cannot take anything for granted in life. Insurance policies are a safeguard against the uncertainties of life. Insurance is system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance policy helps in not only mitigating risks but also provides a financial cushion against adverse financial burdens suffered. Insurance policies cover the risk of life as well as other assets and valuables such as home, automobiles, jewelry etc... On the basis of the risk they cover, insurance policies can be classified into two categories; Life Insurance General Insurance

Life Insurance Life insurance is a written contract between the insured and the insurer, which provides for the payment of the insured sum on the date of the maturity of the contract or on the unfortunate death of the insured, whichever occurs earlier.

Types of Insurance Policies Endowment Policy Whole Life Policy Term Life Policy Money-Back Policy Joint Life Policy Group Insurance Policy Loan Cover Term Assurance Policy Pension Plan Or Annuities Unit Linked Insurance Plan

Endowment Policy, India

An endowment policy covers risk for a specified period, at the end of which the sum assured is paid back to the policyholder, along with the bonus accumulated during the term of the policy. An endowment life insurance policy is designed primarily to provide a living benefit and only secondarily to provide life insurance protection. Therefore, it is more of an investment than a whole life policy.

Whole Life Insurance Policy, India

Whole life policy runs as long as the policyholder is alive. As risk is covered for the entire life of the policyholder, therefore, such policies are known as whole life policies. A simple whole life policy requires the insurer to pay regular premiums throughout the life. In a whole life policy, the insured amount and the bonus is payable only to the nominee of the beneficiary upon the death of the policyholder. There is no survival benefit as the policyholder is not entitled to any money during his / her own lifetime.

Term Life Insurance Policy, India

Term life insurance policy covers risk only during the selected term period. If the policyholder survives the term, the risk cover comes to an end. Term life policies are primarily designed to meet the needs of those people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy.

Money Back Policy, India

Money back policy provides for periodic payments of partial survival benefits during the term of the policy, as long as the policyholder is alive. They differ from endowment policy in the sense that in endowment policy survival benefits are payable only at the end of the endowment period.

Joint Life Insurance Policy, India

Joint life insurance policies are similar to endowment policies as they too offer maturity benefits to the policyholders, apart from covering risks like all life insurance policies. But joint life policies are categorized separately as they cover two lives simultaneously, thus offering a unique advantage in some cases, notably, for a married couple or for partners in a business firm.

Group Insurance, India

Group insurance offers life insurance protection under group policies to various groups such as employers-employees, professionals, co-operatives, weaker sections of society, etc. It also provides insurance coverage for people in certain approved occupations at the lowest possible premium cost.

Loan Cover Term Assurance Policy, India

Loan cover term assurance policy is an insurance policy, which covers a home loan. Such a policy covers the individual's home loan amount in case of an eventuality. The cover on such a policy keeps reducing with the passage of time as individuals keep paying their EMIs (equated monthly installments) regularly, which reduces the loan amount. Various insurance companies offering loan repayment protection insurance policy are HDFC Standard Life Insurance Tata AIG ING Vysya LIC

Pension Plan, India

Annuities differ from all the other forms of life insurance in that an annuity does not provide any life insurance cover but, instead, offers a guaranteed income either for life or a certain period. Typically annuities are bought to generate income during one's retired life, which is why they are also called pension plans. By buying an annuity or a pension plan

the annuitant receives guaranteed income throughout his life. He also receives lump sum benefits for the annuitant's estate in addition to the payments during the annuitant's lifetime.

Unit Linked Insurance Plans (ULIP)

Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time. ULIP provides multiple benefits to the consumer. The benefits include: Life protection Investment and Savings Flexibility Adjustable Life Cover Investment Options Transparency Options to take additional cover against Death due to accident Disability Critical Illness Surgeries Liquidity Tax planning

General Insurance, India

General Insurance provides much-needed protection against unforeseen events such as accidents, illness, fire, burglary et al. Unlike Life Insurance, General Insurance is not meant to offer returns but is a protection against contingencies. Almost everything that has a financial value in life and has a probability of getting lost, stolen or damaged can be covered through General Insurance policy. Property (both movable and immovable), vehicle, cash, household goods, health, dishonesty and also one's liability towards others can be covered under general insurance policy. Under certain Acts of Parliament, some types of insurance

like Motor Insurance and Public Liability Insurance have been made compulsory. Major insurance policies that are covered under General Insurance are: Home Insurance Health Insurance Motor Insurance Travel Insurance

Health Insurance, India

It is said that a healthy mind resides in a healthy body. Hence it is very important to stay healthy. These days life is very fast and stressful. No matter how much you care one can always fall ill. Health treatment nowadays is very costly. More than the disease it is the cost of treatment that takes its toll. To get rid of health worries health / medical insurance is the answer. Health insurance policy not only covers expenses incurred during hospitalization but also during the pre as well as post hospitalization stages like money spent for conducting medical tests and buying medicines. The cover will be to the extent of the sum insured.

Home Insurance, India

Every man has a dream to own a house one day. For an ordinary person it takes a whole lifetime of savings to build a house. And one cannot predict a natural calamity like earthquake. In recent times we have seen what havoc an earthquake or any other natural calamity such as floods, landslides and torrential rains can wreck. Hence home insurance is very important. Home insurance policy also protects against other hazards like gas cylinder explosion, fire due to electric short circuit as well as man-made disaster like burglary. Home insurance policy available in the market covers broadly two things: Building structure Contents inside the home

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Motor Insurance, India

Legally, no motor vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory to get the vehicle insured. Motor insurance policies cover against any loss or damage caused to the vehicle or its accessories due to the following natural and manmade calamities. Natural Calamities: Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide. Man made Calamities: Burglary, theft, riot, strike, malicious act, accident by external means, terrorist activity, any damage in transit by road, rail, inland waterway, lift, elevator or air. Motor insurance provides compulsory personal accident cover for individual owners of the vehicle while driving. One can also opt for a personal accident cover for passengers and third party legal liability. Third party legal liability protects against legal liability arising due to accidental damages. It includes any permanent injury / death of a person and damage caused to the property.

Travel Insurance, India

Travel and tourism is one of the most fast growing sectors around the world. With rise in standards of living, more and more people are embarking on journeys and exploring new places. Before going on a trip you need to address all your travel worries. Travel insurance policy takes care of all your travel worries. It secures you and your loved ones in their sojourn abroad. Travel insurance plans offer host of benefits such as medical expenses, loss or delay of baggage or passport, personal accident, financial emergency assistance and hijack distress allowance.

Life Insurance Companies in India

Before insurance sector was opened to the private sector Life Insurance Corporation (LIC) was the only insurance company in India. After the opening up of Insurance sector in India there has been a glut of insurance companies in India. These companies have come up with innovative and flexible insurance policies to cater to varying needs of the individual. Opening up of the Insurance sector has also forced the LIC to tighten up its belt and deliver better service. All in all it has been a bonanza for the consumer. Major Life insurance Companies in India are: 11

 Life Insurance Corporation of India Aviva plc Life Insurance Aviva Life Insurance Bajaj Allianz Life Insurance Birla Sun Life Insurance HDFC Standard Life Insurance ING Vysya Life Insurance Om Kotak Mahindra Life Insurance Max New York Life Insurance MetLife India Insurance Reliance Life Insurance SBI Life Insurance Shriram Life Insurance Tata AIG Life Insurance

The Life Insurance Scenario in India

Since 1956, the nationalization of the insurance industry, the state run Life Insurance Corporation of India (LIC) has held the monopoly in that countrys life insurance sector General Insurance Corporation of India (GIC), with its four subsidiaries, was its counterpart in the causality sector. Over time, taking advantage of its monopoly and virtual prerogative in establishing premiums, LIC has evolved into a monolith. With around 600,000agents in the every nook and corner of the vast country, it has created an enviable brand name, particularly among the rural population of the country. it has around $40 billion as its fund and is a strong player in the financial sector. However, on the qualitative side, it has very little to take pride in. And there lies the potential for foreign players to challenge this behemoth. As is typical with monopolies, the premium rates charged by LIC are among the highest in the world, and its track record in customer service can, at best, be called shabby. With a huge unionized, rigid work force mostly in the clerical category, LIC runs the risk of high fixed cost, which while boasting about full-scale automation of its operation, the truth is that its technology is outdated. The new players, with the state-of-the-art technology under their belt, will be in advantageous position.80% of LICs business is procured by 20% of illtrained agent force. The foreign player, with domestic partners strong brand value, can test

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the un-covenantal distribution channels like brokers, the internet, the banking distribution system etc.

A Brief History of the Insurance Sector

The business of life insurance in India in its existing form 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 businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, In the year 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 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 Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.

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 1968: The Insurance 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. The United India Insurance Company Ltd., And General Insurance Corporation Incorporated As A Company.

Insurance sector reforms

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. 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 underway and recognising that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms In 1994, the committee submitted the report and some of the key recommendations included:

i) Structure Government stake in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freed.

ii) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry. 14

 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) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50% GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time)

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

The committee emphasized that in order to improve the customer 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 stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body. 15

The Insurance Regulatory and Development Authority

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies were the launch of the IRDAs online service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 13 life insurance and 6 general insurance companies have been registered.

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1.3 COMPANY PROFILE Aviva is UK's largest and die world's fifth largest insurance Group. It is one of the leading providers of life and pensions product; to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 35 millioncustomer base worldwide. It has more than 332 billion of assets under management. In India, Aviva has a long history dating back to 1834. At the time of nationalization it was the largest foreign insurer in India in terms of the compensation paid by the Government of India. Aviva was also the first foreign insurance company in India to set up its representative office in 1995.In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest Group of companies. A professionally managed company, Dabur is the country's leading producer of traditional healthcare products. In accordance with the government regulations Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share. With a strong sales force of over 12,000 Financial Planning

Advisers (FPAs). Aviva has initialed an innovative and differentiated sales approach to the business. Through the "Financial Health Check"' (FHC) Aviva" s sales force has been able to establish its credibility in the market The FHC is a free service administered by the FPAs for a need-based analysis of the customer's long-term savings and insurance needs. Depending on life stage and earnings of the customer, the FHC assesses and recommends the right insurance product for them. Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully in India. Currently, Aviva has Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd, and Punjab & Sind Bank, 15 Cooperative Banks in Gujarat, Rajasthan, Jammu Kashmir, Bihar, West Bengal and Maharashtra and one regional Bank in Sikkim. When Aviva entered the market most companies were offering traditional life products. Aviva started by offering the more modern

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Unit Linked and Unitized With Profit products to the customers, creating a unique differentiation. Aviva" s products have been designed in a manner to provide customers flexibility, transparency and value for money. It has been among the first companies to introduce the more modern Unit Linked Products in the market. Its products include: whole life (Life Long), endowment (Life Saver, Easy Life Plus), and child policy (Young Achiever) single premium (Life Bond and Life Bond Plus), Pension (Pension Plus). Term (Life Shield), fixed term protection plan (Freedom Life Plan) and a tax efficient investment plan with limited premium payment term (LifeBond5). Aviva products are modem and contemporary unitized products that offer unique customer benefits like flexibility to chose cover levels, indexation and partial withdrawals. Aviva's Fund management operation is one of its key differentiators. Operating from Mumbai Aviva has an experienced team of fund managers and the range of fund options includes Unitized With-Profits Fund and four Unit Linked funds: - Protector Fund, Secure Fund, Balanced Fund and Growth Fund. Aviva has 112 Branches in India (including rural branches) supporting its distribution network. Through its Bancassurance partner locations, Aviva products are available in 378 towns and cities across India. Aviva is also keen to reach out to the underprivileged that have not had access to insurance so

far. Through its association with Basix (a micro financial institution) and other NGOs, it has been able to reach the weaker sections of the society and provide life insurance to them. For three consecutive years in 2005, 2006 and 2007, Aviva has had relatively high scores on the parameters of Credibility, Respect, Fairness, Pride and Camaraderie in the survey administered by Grow Talent Company Ltd along with Great Places to Work Institute, Inc. and Business World magazine.

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WHO IS AVIVA? DABUR A professionally managed company, it is the country's leading producer of Founded in 1384. Dabur is one of India's oldest and largest groups of companies with consolidated annual turnover in excess of Rs 1.S99 acres, traditional healthcare products.

AVIVA Aviva is UK's largest and the world's fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history daring back to 1696, Aviva has a 35 million-customer base worldwide. It has more than 332 billion of assets under management.

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VISION Aviva - where exceeding expectations through innovative solutions is "the" way of life. This is the compelling vision that Aviva India has created through the active contribution of its employees. These lines not only define the way we live and work but also serve as a reminder to deliver the best to our customers, shareholders, colleagues, partners & employees at all times. Embedded in this vision are the core values of Integrity, Customer, centricity, Passion for winning Innovation and Empowered team that we have collectively defined and committed to working towards.

Aviva is committed to helping our customers get Kal par Control and make the most of their lives. It is the constant endeavor to ensure that our customers have easy access to Aviva products and services at all times. Aviva has pioneered bancassurance in the country through its tie-ups with 22 leading private and nationalized Banks in the country. Aviva also focuses on bancassurance worldwide and has a proven Track record of successful bancassurance 20

relationships. It has 40 major partnerships with leading banks across the globe. Aviva is a leading bancassurer in countries such as France, Italy, Spain, Australia and New Zealand. ABN AMRO BANK ABN AMRO is a prominent international bank with European roots and a clear focus on consumer and commercial banking gaining a competitive edge on the chosen markets and client segments. ABN AMRO Bank (India) ventured into the Indian market in 1920 primarily to finance the diamond trading business and evolved by mid 1990's into a fastest growing retail bank and a well-respected wholesale bank. The Bank is recognized as one of the

most successful consumers banking outfits in the county, known for its innovation and aggression. ABN India consumer banking pioneered the distribution of third party financial products like mutual funds, bonds and life insurance. Aviva's relationship with ABN India commenced in June 2002 under which the bank introduces its customers to Aviva for insurance and provides access to its affluent customer base across the country through its operations in 21 branches at 14 locations.

AMERICAN EXPRESS BANK American Express Company is a diversified worldwide travel and financial services company founded in 1850. It is the world's largest single card issuer, based on purchase volume generated of nearly 55 million cards worldwide, present in India since 1921. American Express provides high quality travel related and financial services in India. Aviva Life Insurance entered into a strategic alliance with American Express for distribution of Life Insurance in June 2002 to offer top of the line saving-cum-protection plans to Amex bank and card customers. Aviva offers tailor-made investment solutions to the high net worth clients of the Wealth

Management channel. The retail card segment is being tapped through outbound calling to the Amex cardholders. The American Express Inbound call center also pitches Aviva products to its callers. THE LAKSHMI VILAS BANK LTD The Lakshmi Vilas Bank Ltd. based out of Karur is among the top private banks in India. It has 221 branches with a customer base of 12 million, across 10 stares Currently Aviva products are sold across 204 branches of LVB. 21

CANARA BANK Canara Bank is one of the largest retail banks in India with 1515 branches spread across 25 States and 4 Union Territories. The customer base of Canara Bank exceeds 27 million. With a net profit of INR 1110 Crores, deposits of over INR 96,908 Crores, 47389 employees for the year ending Mar 2005, Canara Bank is truly a Bank to be reckoned with for the sheer magnitude of coverage it offers its clients. Canara Bank has tied up with Aviva as a Corporate Agent for its Life Insurance Products. Aviva products are currently offered in 1030 Canara Bank branches m 103 Cities. PUNJAB & SIND BANK Punjab & Sind Bank was established in the year 1908. Based on the principles of social commitment to the people, help the farmers, and the weaker sections of the society to raise their standard of living and play a significant role in the development of the country. Even after 96 years of its inception, Punjab & Sind Bank stands committed to honor the high ideals of its founding fathers Punjab and Sindh Bank has a network of 759 branches and 132 extension counters all over the country with close to 9,765 employees, 42 per cent of its branches are in the rural and semi urban areas. In line with spirit of

liberalization the Bank has laid special emphasis on International banking, Hire purchase, Leasing, Tele-banking and Credit card facilities. The bank has also started their Rural Development Division, High Tech Agricultural Branches, Specialized Locker Branches, Industrial Finance and SSI branches, besides Housing Finance Branch for the convenience of its customers.

CENTURION BANK OF PUNJAB Centurion Bank of Punjab is a new generation private sector bank offering a wide spectrum of retail and corporate banking products and services. It holds leadership positions in retail two- wheeler loans and commercial vehicle loans. It has been among the earliest banks to offer a technology-enabled customer interface that provide easy access and superior customer service. RBI has approved the merger between Centurion Bank and Bank of Punjab effective from October 1st. 2005. The merged entity, named Centurion Bank of Punjab, has a strong nationwide franchise of 241 branches and extension counters and 389 ATMs. With strengths in the retail, SME and agriculture businesses the bank is well poised to capture the 22

opportunities that exist in the Indian market the combined bank's 3,500 employees will continue to provide support and an enhanced banking experience to our customers, as part of a bigger, stronger bank.

"Aviva's Key Strength Is Its Fund Management Capabilities With An Experience Of 30 Years In Money Management."

PRODUCT PROFILE

Aviva plc Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 5 riders, to create a customized solution for each policyholder.

SAVINGS SOLUTIONS - AVIVA DHAN VARSHA Aviva Dhan Varsha is a traditional investment cum protection plan that provides you Guaranteed Addition of 6% to 9% of the sum assured along with life protection. Guaranteed Additions basis the policy term, longer the Policy Term, higher the rate of Guaranteed Additions. Guaranteed Survival Benefit equal to sum of all accrued guaranteed addition at the end of the Premium Payment Term. Guaranteed Maturity Benefit at the end of the Policy Term. No premium payment liability during the last five years for policy term of 10, 15 and 20 years. Optional riders for additional protection in the event of accidental / non-accidental death.

PROTECTION SOLUTIONS - AVIVA LIFE SHIELD PLATINUM At Aviva we are constantly innovating because we believe that each one of us is different and so is our expectation from our life insurance plan. Presenting Aviva Life Shield Platinum TM, a unique protection plan to help you plan for your family in case you are not around.

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OPTION A LIFE PROTECTION Choose this option if you foresee a need for lump sum payment of large sum of money to your family in case you are not around. You can opt for additional health and Accidental Death Benefit rider. We offer differential rates for Smokers, Non-smokers and preferred rates for (Healthy) Non-smokers. The special rates for non-smokers are subject to Cotinine test, which is available in select cities. Option B Income Replacement Choose this option if you want to provide a regular monthly income to your family in your absence. This amount increases by 5% p.a. compounded annually from the very first year of your policy to beat inflation. Your premium obligation is limited to about 2/3rd of the policy term. OPTION C LOAN PROTECTION. Choose this option to cover for higher financial liabilities and family responsibilities in the early years of your life, the Life Cover decreases evenly across the policy term. Your premium obligation is limited to about 2/3rd of the policy term. This Insurance plan offers rebate on your premium for higher levels of Sum Assured.

CHILDREN PLANS - AVIVA YOUNG SCHOLAR ADVANTAGE Aviva Young Scholar Advantage is a comprehensive plan that enables you to secure your childs future in any eventuality through: All future premiums being waived off and invested as a lump sum amount in to the funds, so the policy continues even in the unfortunate event of the parents death while the Life Cover (Sum Assured) is paid out immediately. These benefits are also applicable upon disability or critical illness if the Comprehensive Health Benefit (CHB) Rider is opted. Provision of a regular income for the minor child, in the event of parents death if Aviva Child Education (CE) Rider is opted for. An additional lumpsum being paid in the event of parents death if Aviva Term Plus Rider is opted. Loyalty Additions to enhance your Fund Value. A choice of 9 fund options; Investment flexibility through Automatic Asset Allocation (AAA) and Systematic Transfer Plan (STP). 24

 The product will be offered only to those who have at least one child

RETIREMENT SOLUTIONS - AVIVA DHAN VRIDDHI Aviva Dhan Vriddhi is a traditional money back plan that provides you a guaranteed amount of money at regular intervals along with protection through the Life Cover (Sum Assured), in the event of death Guaranteed returns: Guaranteed Additions @7% of Life Cover for each completed policy year till maturity Limited premium payment: Premiums are not required to be paid during the last five years of the policy Additional protection: You can opt from 5 riders to enhance protection with the benefits ranging from additional Sum Assured for the incident covered, waiver of future premiums and also a regular income for your beneficiary in case you are not around Rebate for high Sum Assured: Rebate on basic premium is allowed if your Sum Assured is Rs. 1 Lac or higher

MARKET-LINKED RETIREMENT PRODUCTS Aviva Life Insurance has, 9 new unit-linked plans including one of the market leading child, pension and savings products with14 new fund options covering savings, retirement, protection and investment needs of all customers. These products are in line with the recent IRDA guidelines on cap on charges and come with enhanced features and higher IRRs (Internal Rate of Return). The company has also introduced thematic funds Infrastructure fund and PSU Fund across select products.

GROUP INSURANCE SOLUTIONS AVIVA CORPORATE LIFE PLUS- Provides life cover for employees / members of an organization to protect their families. Aviva Corporate Shield Plus - Aviva Corporate Shield Plus is a term insurance plan in lieu of the EDLI. Aviva Group Gratuity Plan - Provides financial security to employees at the time of retirement along with life cover. 25

 AVIVA GROUP LIFE PROTECT - A plan designed for Banks and other Financial Institutions offering housing and car loans.

26

CHAPTER II RESEARCH INFORMATION

2.1 OBJECTIVES OF THE STUDY

A comparative study on ULIP and Traditional products with measuring of profitability and to analyses their choice with the customer group.

PRIMARY OBJECTIVES: To identify the traditional products market potential. To identify the traditional products strength. To compare the ULIP products of Aviva plc with their major competitors.

SECONDARY OBJECTIVES: To identify the insurance products market potential. To compare the Net Asset Value of Life time scheme of Aviva plc with their competitors Net Asset value. To create an awareness about the ULIP products and traditional products of Aviva plc. To find the Market Growth of Aviva plc. To identifies the preference of the customer. To compare the performance of market return with indices. To evaluate the performance of the funds based on market risk. To provide a steady cash flow to investors.

27

2.2 NEED FOR THE STUDY

The last few years have been a watershed for assured return plans. As the insurance sector has developed, there's been a growing acceptance by most policyholders that the assured return era is a thing of the past. The private insurance companies are focusing on the Market Linked Plans.

This study undertaken for Aviva plc Life Insurance Company Ltd aims to analyze the risk which involved in Market linked traditional insurance plan and to analyze the performance of their funds products.

This has been done by collecting Net asset values and indices from various companies and their websites which would help in analyzing the profile and performance of the funds and their risk and return.

This study would help in explaining Market risk and returns which create awareness about the Market linked product among the investors through which the company gets more investment. All this would help in giving suggestions to Aviva plc Life Insurance Company Ltd, in strengthening their marketing efforts, in tapping private insurance companies schemes and expand their business.

2.3 LIMITATIONS OF THE STUDY Due to a limited duration, a detailed and a comprehensive study could not be made. The time Period taken for the study vary between one company to another company. The data collected from the company websites may be biased. Certain information & data which cannot be accessed or published. The analysis and interpretation of the fund is based only on the past performance. The analysis and interpretation of the fund is based only on the past performance.

28

CHAPTER III METHODOLOGY OF THE STUDY

Methodology is a way to systematically solve the research problem. It explains the various steps that are generally adopted by the researcher in studying the research problems along with the logic behind it.

DATA COLLECTION METHOD

Secondary data were used for analyses such as (NAV) and performance of various schemes of the asset management companies.

The net asset value (NAV) of the funds was collected from various websites. The benchmark indices were collected from the respective companys fact sheets and also from the companys common application forms.

RESEARCH DESIGN

For this study descriptive method of research is used for analyzing the performance of the funds. Descriptive study is the research study that describes the characteristics of any individual or of groups. Here it describes the characteristics based on the schemes and the performance based on the various asset management companies.

TOOLS USED FOR ANALYSIS

SHARPE, TREYNOR AND JENSEN METHOD Portfolio performance was measured mostly in terms of returns in early days, though there was an awareness of the concept of risk, which was difficult to quantify. Risk could not be incorporated in evaluation, as there was no measures that combined both return and risk. Returns on portfolios performance are Sharpe Ratio, Treynor measure and Jensen measure. These are absolute measure of portfolio performance that can be used to rank different portfolios.

29

RETURN For each mutual fund scheme under study, the monthly returns are computed as: = Net asset value in the beginning = Net asset value at the end

AVERAGE i = 1,2,3 .. n

RISK Standard deviation - Measure of Total Risk

Financial analysts and statisticians prefer to use a quantitative risk surrogate The standard deviation and he variance are equally acceptable and equivalent quantitative measures of an assets total risk. The variance and standard deviation are computed from logarithmic monthly returns.

BETA Measure of Systematic Risk

To obtain the measure of systematic risk (Beta) of the mutual fund scheme, Market Model is applied.

RISK-LESS ASSET

By definition, a risk less asset has zero variability of returns. If an investor buys an asset at the beginning of the holding period with the known terminal value, such type of asset can be called as risk-less or risk free asset. Government securities and nationalized bank deposits fall under this category. As the government securities are not easily available to the common man, we take the nationalized bank deposits as the risk free asset and the interest rate on such deposits are considered as risk free return.

30

SHARPE RATIO

This is a measure of risk-adjusted return on a portfolio. It is a ratio of excess return to the standard deviation of portfolio returns. An implicit assumption of the Sharpe ratio is that the portfolio is not combined with other risky portfolios. It is relevant for performance evaluation when comparing mutually exclusive portfolios. The Sharpe measure follows his earlier work on capital asset pricing model (CAPM) dealing specifically with capital market line (CML). The Sharpe measure of performance denoted by S is given by

Where, Ri = Rf = the average rate of return on portfolio i during a specified time period. the average rate of return on a risk free investment during the same period

TREYNOR MEASURE

This is also a measure of risk-adjusted return on a portfolio. It is a ratio of

measurement when evaluating portfolios separately or in combination with other portfolios. A high treynor measure indicated a favorable relationship between risk and return on the portfolio. Sharpe Ratio and Treynor measure give the same results in the case of highly diversified portfolios as the total risk of portfolios approaches that of a market portfolio.

Where, Ri = Rf = the average rate of return on portfolio i' during a specified time period. the average rate return on a risk free investment during the same period. the slope of the funs characteristic line during that time period (this indicates portfolios relative volatility with respect to market portfolio). A larger T value indicates a better portfolio performance for all investors regardless of their risk performances. The numerator of this ratio (Ri-Rf) is the risk premium and the denominator is a measure of market risk. The Treynor measure is risk premium per unit of systematic risk. 31

JENSENS ALPHA This is the difference between a funds actual return and the return on a benchmark portfolio with the same systematic risk ( being evaluated. It measures the ability of active fund management to earn returns in excess of the reward for market risk. We can infer meaningful results if it is used to compare two portfolios with similar betas. Jensens measure is also based on capital asset pricing model. CAPM estimates the expected return on any security or portfolio by the following expression; E (Ri) Where, E (Ri) = expected return on security or portfolio I -Rf)

Rf = Risk free return Systematic risk (beta) of security E (Rm) = expected return on the market portfolio I

Ri

The value of aj suggests whether the portfolio manager possesses superior (inf fund management ability.

32

CHAPTER IV DATA ANALYSIS AND INTERPRETATION

Research methodology is a way of systematically solving the research problem. Research methodology deals with the research design used and methods used to present the study.

RESEARCH DESIGN

A research design is a detailed blue print used to guide a research study toward its objective. The process of designing a research study involves many interrelated decisions. The most significant decision is the choice of research approach, because it determines how the information will be obtained. The choice of the research approach depends on the nature of the research that one wants to do.

The research design adopted for this study is Descriptive Research. Descriptive method was adopted because it deals with description of the state of affairs as it exists at present.

SAMPLING

A sample is a smaller representation of a larger whole. 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.

SAMPLING TECHNIQUE

The population is divided into several sub-populations that are individually more homogeneous and then items are selected from each stratum to constitute a sample. The sampling design of the study is based on Simple random sampling. The researcher has selected 200 respondents randomly in ADYAR Aviva plc life insurance Company in Chennai. The ADYAR Aviva plc life insurance company in Chennai was divided into four 33

strata, namely north phase, south phase, east phase and west phase. Various Industrial Units form all the four strata were chosen to draw sample. 50 respondents were surveyed from each strata accounting to a total of 200.

DATA COLLECTION METHOD

The data collected can be categorized into two types. Primary data Secondary data

The Primary data are those which are collected afresh for the first time, and thus happens to be original in character.

Among the various methods, which can be used to collect the primary data, the researcher has adopted two methods which are Personal Interview method and Structured Questionnaire method. The researcher has prepared structured questionnaires, which contained predominantly multiple choice questions. The respondents opinions are gathered with regard to the problem with the help of the questionnaires.

THE TOOLS USED FOR COLLECTING THE PRIMARY DATA ARE: Structured Questionnaire. Personal Interviewing.

The Secondary data are those which have already been collected by someone else and which have already passed through the statistical process. The secondary data is collected with the help of ADYAR Aviva plc life insurance Company, Directory, Company Website, Internet etc.

Both primary and secondary data collection have been taken for this research study.

34

STATISTICAL TOOLS USED FOR THE STUDY

The data has been mainly analyzed by using the following methods and tests. Percentage Analysis Two way analysis Ranking Method Chi Square Test

Cross Tabulation and Percentage method supplemented by appropriate charts are used to interpret the analysis.

PERCENTAGE ANALYSIS

Percentage refers to a special kind of ratio in making comparison between two or more data and to describe relationships. Percentage can also be used to compare the relation terms the distribution of two or more sources of data.

Number of Respondents Percentage of Respondents = Total Respondents --------------------------------- X 100

RANKING METHOD (WEIGHTED AVERAGE METHOD)

This technique was used to rank out the opinion about the characteristic of CitiFinancial mortgages by the industrial sectors in the study area. In this method the respondents were asked to rank their opinion about the characteristics of the company. The order of merit given by the respondents was converted into ranks by using the following formula. Weightage Score= Where, Wi - Weightage value Xj - Ranking position value Xj

35

CHI-SQUARE ANALYSIS

Chi-square is a non-parametric test of statistical significance for bi-variate tabular analysis. A non-parametric test, like chi square, is a rough estimate of confidence.

Chi-square is used most frequently to test the statistical significance of results reported in bivariate tables and interpreting bivariate tables is integral to interpreting the results of a chi-square test. The Chi square method is the application of testing the significant difference between observed and expected values. Null Hypothesis (H0) The hypothesis, or assumption, about a population parameter we wish to test, usually an assumption of the status quo. Alternative Hypothesis (H1) The conclusion we accept when the data fail to support the null hypothesis.

STATISTICAL TEST:

Chi Degrees of freedom Whereas, O E R C = = = = Observed frequency Expected frequency Number of rows Number of columns =

= (R-1) (C-1)

To find E:

Expected Frequency =

----------------------------------Grand Total 36

A value indicating the percentage of sample values that is outside certain limits, assuming the null hypothesis is correct, that is, the probability of rejecting the null hypothesis when it is true.

37

CHAPTER IV REVIEW OF LITERATURE

REFERRED PAPERS 1) Carrow Kenneth A. and Heron R1- The authors investigate how the passage of the Financial Services Modernization Act of 1999 (FMA) affected stock prices of banks, thrifts, finance companies and insurance companies. The study looks at stock excess returns across sectors and company size. The idea is that the passage of the FMA opens doors for potential mergers and consolidations across banking, financial and insurance sectors, translating into abnormal positive returns for businesses that are the likely candidate for mergers and consolidation. The results of the study suggest that the largest returns to the FMA passage were realized by large investment banks and insurance companies. The stock prices of banks, both small and large, seemed to be unaffected by the new legislation while thrifts, finance companies and foreign banks lost value. 2) Carrow Kenneth A2- This paper is conceptually similar to the one cited above, in that the author investigates whether the announcement of a merger between Citicorp and Travelers abnormally impacted stock prices of financial and insurance companies. Analysis of abnormal returns surrounding the merger show that life insurance companies and large banks experienced significant stock price increases, while the returns of stocks of smaller banks, health insurers, and property/casualty insurers remain relatively unchanged.

1. Carrow Kenneth A. and Heron R1. Capital market reactions to the passage of the Financial Services Modernization Act of 1999. The Quarterly Review of Economics and Finance 42 (2002): 465-485. 2. Carrow Kenneth A2. Citicorp-Travelers Group merger: Challenging barriers between banking and insurance. Journal of Banking and Finance 25 (2001): 1553-1571. 38

3) Estrella, Arturo3-This paper analyses which types of mergers are likely to be most productive for banks and other financial firms in the United States. The author acknowledges that the extent to which different business activities are fundamentally distinct induces a tradeoff between diversification gains and loss of efficiency. The research considers life insurance, property/casualty insurance, securities, and commercial firms as potential matches for firms and concludes that potential diversification gains arise from almost all combinations involving banking and insurance. The paper stands out because it shows, unlike other earlier research, that property and casualty insurance companies offer larger diversification gains to banks than life insurance companies.

4) Johnston, Jarrod and Madura J4-The authors first summarize previous literature that examined motives for combining bank and other financial services. Diversification benefits and product complementarities (i.e. mortgage and mortgage insurance, auto financing and auto insurance) seem to be the prime motives. However, some earlier research also suggests that there are few linkages between bank services ands underwriting services in terms of customers, outlets, or other characteristics that generate efficiencies. Given the sources of potential gains, it appears that life insurance companies with their limited underwriting risk and wide variety of other products offered to individual customers would be more attractive targets for banks than other types of insurance companies.

3. Estrella, Arturo3. Mixing and matching: Prospective financial sector mergers and market valuation, Journal of Banking and Finance 25 (2001): 2367-2392. 4. Johnston, Jarrod and Madura J4. Valuing the potential transformation of banks into financial service conglomerates: Evidence from the Citigroup merger The Financial review 35 (2000): 17-36. 39

INDUSTRY PUBLICATIONS 5) Armstrong, Ed and Buse, P5-The article projects that banks would add 5-10 percent to their after tax profits if they aggressively pursue their insurance opportunity." The author develops a pro forma statement for banks selling 12 different insurance items. 6) Boros, Joan E6-The author states that convergence depends on its definition. She offers very useful definitions for convergence: 1) Merger of banks and insurers, heretofore independent, into a financial supermarket with endless cross-selling potential, and 2) A combination of insurance and capital markets products moving into a union and uniformity, or separate markets performing the same functions. This could also be labeled as securitization of insurance risk and or insurancization of financial risk. 7) Crystal, Mary7-This panel discussion on bank marketing suggests more direct interaction with customers by direct mail or personal contact. Doing it pro-actively and by alternative methods: call centers, PC-banking, internet banking and supermarket banking. Using branding and other retail marketing skills. Bankers have tried to cut down on personal contact and may have alienated their customers.

5. Armstrong, Ed and Buse, P5. (1996). Youve got the green light, whats it worth? ABA Banking Journal, Vol. 88, Sept., 13-18. 6. Boros, Joan E6 (2002). Are Convergence Products Happening? National Underwriter, Life & Health/Financial Services Ed., May 27, 2002. 7. Crystal, Mary7 (1997). That was then, this is tomorrow. Bank Marketing, Vol. 30, 1, Dec.97/Jan.98, 28-52. 40

8) Gjertsen, Lee Ann8-Insurance agents of New Jersey, Connecticut and Massachusetts founded an association as Independent Insurance Agents and Brokers and have applied for a charter for an association savings bank. The bank products are to be sold by the independent insurance agents that own their own agencies. The bank is to be named InsurBanc.

9) Gorski, Lorraine9-The article describes how insurers can use the banks customer base to reach new customers. Banks have the trust of their customers and that would be a good distribution channel for life insurance, especially in the midlevel or mass market. Banks could represent 3-4 different insurers therefore the insurance products need to be competitive (for the customer and the representative) and specific for bank employee selling. Furthermore, stable relationships are necessary and the product needs to be branded and well advertised. Underwriting will stay with the insurers but selling may go both ways by insurance agents or bank employees.

10) Gorski, Lorraine10- Insurers have founded banks to offer banking products. One hundred and thirty five applications were made between Jan.1, 1997 and May 31, 2001. Insurance banks have an uphill battle to convince their customers to establish a bank account because it is hard to determine when and why an insurance customer needs a bank account. On the other hand, it is easier for a bank that provides a loan to sense when insurance is necessary. Since most people already have a bank account, customer as well as agents have to be motivated to deal with another financial institution or to switch. In addition these new institutions often have no brick and mortar establishment but rather rely on Internet applications and Internet interactions.

8. Gjertsen, Lee Ann8 (2002). Insurance Agents Thrift Seeks OK to Widen Reach. The American Banker, May 13, 2002. 9. Gorski, Lorraine9 (2002). The New Producers. Bests Review, May 2002, p.45-48. 10. Gorski, Lorraine10 (2002) Banking on Policy Holders. Bests Review, July 2002, p.44.

41

11) Hogan, John D11 -In this paper, the author contends that the impact of the GLB Act on the insurance industry is unclear. It had been widely assumed that the banking industry would quickly expand into non-banking activities, as synergies could be expected from the large bank customer information base and frequent contacts with customers. 12) McDaniel, David12 -The article explains that insurance agents are afraid of banks cutting into their business as they have in Europe where banks are far more efficient than agents. The article lays out how to make the proposed legislation ineffective, by warning of unsubstantiated tie-ins and bank coercion, proposing 10-day waiting periods, state legislation, and tough fire walls. 13) Milligan, John13- First Long Island Bank prospers because it serves a small niche of small privately owned companies and upscale consumers that it coddles by being available both in person/ phone and online. 14) Pasini, Roy14 The author states that the insurance industry can defend itself against the invasion by banks through better customer service and greater use of technological efficiencies.

11. Hogan, John D11 (2001). Financial Services Reform: The Gramm-Leach-Bliley Act and its implications for insurance, Journal of Financial Service Professionals, January 2001, pp. 33-38. 12. McDaniel, David12 (1995): Agents worst nightmare: Banks are gaining the edge to sell insurance in a big way. Bests Review [Property/Casualty], Vol. 96, 2, June, 28-33. 13. Milligan, John13 (1996). Banking like it used to be. US Banker, Vol. 106, Nov. p.61-65. 14.Pasini,Roy14(1997). Alliances Lawson cites three issues critical to

future. Underwriters Report, 92nd year, #19, 5/8/97.

42

CHAPTER V

DATA ANALYSIS AND INTERPRETATION PERCENTAGE ANALYSIS TABLE NO. 5.1.1 AGE OF THE RESPONDENTS S.No. 1. 2. 3. 4. No. of Respondents 42 52 56 50 200 Percentage 21.0 26.0 28.0 25.0 100.0

Age Below 25 years 26-35 years 36-45 years Above 45 years Total

INTERPRETATION From the above table it is inferred that 21.0% of the respondents are belong to below 25 years of age group, 26.0% of the respondents are belong to 26-35 years of age group, 28.0% of the respondents are belong to 36-45 years of age group and 25.0% of the respondents are belong to above 45 years of age group. It is concluded from the above analysis that maximum of the respondents are belong to 36-45 years of age group.
CHART 5.1.1 AGE OF THE RESPONDENTS

30 25
PERCENTAGE

26

28

25

21

20 15 10 5

0
Below 25 years26-35 years 36-45 yearsAbove 45 years

43

TABLE NO. 5.1.2 GENDER OF THE RESPONDENTS

S.No. 1. 2.

Gender Male Female Total

No. of Respondents 122 78 200

Percentage 61.0 39.0 100.0

INTERPRETATION It is noted from the above table that 61.0% of the respondents are male and 39.0% of the respondents are female.

CHART 5.1.2 GENDER OF THE RESPONDENTS

Female 39% Male 61%

44

TABLE NO. 5.1.3 NATIVITY OF THE RESPONDENTS S.No. 1. 2. No. of Respondents 40 160 200 Percentage 20.0 80.0 100.0

Nativity Rural Urban Total

INTERPRETATION It is inferred from the above table that 20.0% of the respondents are in rural area and 80.0% of the respondents are in urban area.

CHART5.1.3 NATIVITY OF THE RESPONDENTS

Rural 20%

Urban 80%

45

TABLE NO. 5.1.4 EDUCATIONAL QUALIFICATION OF THE RESPONDENTS S.No. 1. 2. 3. 4. Educational Qualification School College Professional Diploma Total No. of Respondents 22 40 102 36 200 Percentage 11.0 20.0 51.0 18.0 100.0

INTERPRETATION It is noted from the above table that 11.0% of the respondents are educated till the level of school, 20.0% of the respondents are educated till the level of college, 51.0% of the respondents are educated till the level of professional and 18.0% of the respondents are educated till the level of diploma.

CHART 5.1.4 EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

60 51 50 40 30 20 11 10 0 School College Professional Diploma 20 18

PERCENTAGE

46

TABLE NO. 5.1.5 OCCUPATION OF THE RESPONDENTS

S.No. 1. 2. 3. 4. 5.

Occupation Business Agricultural Self Employed Employed Others Total

No. of Respondents 40 36 41 63 20 200

Percentage 20.0 18.0 20.5 31.5 10.0 100.0

INTERPRETATION It is inferred from the above table that 20.0% of the Respondents are in business, 18.0% of the respondents are agriculturist, 20.5% of the respondents are working as self employed, 31.5% of the respondents are working as employed and 10.0% of the respondents are working in other places.

CHART 5.1.5 OCCUPATION OF THE RESPONDENTS

35

31.5

30
25
PERCENTAGE

20 15 10 5 0

20 18

20.5

10

Business

Agricultural

Self Employed

Employed

Others

47

TABLE NO. 5.1.6 INCOME PER ANNUM S.No. 1. 2. 3. 4. Income per Annum < Rs.50000 Rs.50001 to Rs.100000 Rs.100001 to Rs.200000 > Rs.200000 Total No. of Respondents 49 59 61 31 200 Percentage 24.5 29.5 30.5 15.5 100.0

INTERPRETATION From the above analysis it is found that 24.5% of the respondents are earning less than Rs.50000 per annum, 29.5% of the respondents are earning Rs.50001-Rs.100000 per annum, 30.5% of the respondents are earning Rs.100001- Rs.200000 per annum and 15.5% of the respondents are earning more than Rs.200000 per annum.
CHART 5.1.6 INCOME PER ANNUM

35
30 25
PERCENTAGE

29.5 24.5

30.5

20 15 10

15.5

5
0 < Rs.50000 Rs.50001 to Rs.100001 to > Rs.200000 Rs.100000 Rs.200000

48

TABLE NO. 5.1.7 EXPENDITURE PER ANNUM

S.No. 1. 2. 3. 4.

Expenditure Per Annum < Rs.50000 Rs.50001 to Rs.100000 Rs.100001 to Rs.200000 > Rs.200000 Total

No. of Respondents 97 98 5 0 200

Percentage 48.5 49.0 2.5 0.0 100.0

INTERPRETATION From the above table it is cleared that 48.5% of the respondents are spending less than Rs.50000 per annum, 49.0% of the respondents are spending Rs.50001-Rs.100000 per annum and 2.5% of the respondents are spending Rs.100001- Rs.200000 per annum.

CHART 5.1.7 EXPENDITURE PER ANNUM

60 50
PERCENTAGE

48.5

49

40 30 20

10
0 < Rs.50000

2.5

Rs.50001 to Rs.100001 to > Rs.200000 Rs.100000 Rs.200000

49

TABLE NO. 5.1.8 NUMBER OF FAMILY MEMBERS HAVING INCOME S.No. 1. 2. 3. 4. Number of Family Members 1 member 2 members 3 members 4 members Total No. of Respondents 35 88 58 19 200 Percentage 17.5 44.0 29.0 9.5 100.0

INTERPRETATION From the above table it is stated that 17.5% of the respondents family are getting income with only one member. 44.0% of the respondents family is getting income with two members, 29.0% of the respondents family is getting income with three members and 9.5% of the respondents family is getting income with four members.

50 45 40 35 30 25 20 15 10 5 0

CHART5.1.8 NUMBER OF FAMILY MEMBERS HAVING INCOME

44

PERCENTAGE

29 17.5 9.5

50

TABLE NO. 5.1.9 TOTAL INCOME OF THE FAMILY S.No. 1. 2. 3. 4. Total income < Rs.50000 Rs.50001 to Rs.100000 Rs.100001 to Rs.200000 > Rs.200000 Total No. of Respondents 3 66 105 26 200 Percentage 1.5 33.0 52.5 13.0 100.0

INTERPRETATION It is stated from the above table that 1.5% of the respondents total family income is below Rs.50000, 33.0% of the respondents total family income is in between Rs.50001-100000, 52.5% of the respondents total family income is in between Rs.100001200000 and 13.0% of the respondents total family income is above Rs.200000.

60 50
PERCENTAGE

CHART 5.1.9 TOTAL INCOME OF THE FAMILY

52.5

40 30 20 10

33

13

1.5
0 < Rs.50000 Rs.50001 to Rs.100001 to > Rs.200000 Rs.100000 Rs.200000

51

TABLE NO. 5.1.10 TOTAL MEMBERS OF THE FAMILY

S.No. 1. 2. 3. 4.

Family members 1 member 2 members 3 members 4 members Total

No. of Respondents 3 23 59 115 200

Percentage 1.5 11.5 29.5 57.5 100.0

INTERPRETATION It is inferred from the above table that 1.5% of the respondents are having only one member in their family, 11.5% of the respondents are having only two members in their family, 29.5% of the respondents are having only three members in their family and 57.5% of the respondents are having only four members in their family.

70 60 50
PERCENTAGE

CHART 5.1.10 TOTAL MEMBERS OF THE FAMILY

57.5

40 30 20 10 0 1 2 3 4 1.5 11.5 29.5

52

TABLE NO. 5.1.11 INCOME TAX PAYMENT OBLIGATIONS

S.No. 1. 2.

Opinion Yes No Total

No. of Respondents 130 70 200

Percentage 65.0 35.0 100.0

INTERPRETATION It is obtained from the above table that 65.0% of the respondents are paying income tax and 35.0% of the respondents are not paying income tax.

70 60 50
PERCENTAGE

65

CHART 5.1.11 INCOME TAX PAYMENTS OBLIGATIONS

40 30 20

35

10
0

Yes

No

53

TABLE NO. 5.1.12 AMOUNT OF INCOME TAX LIABILITY

S.No. 1. 2. 3. 4.

Tax Amount < Rs.5000 Rs.5001 to Rs.10000 Rs.10001 to Rs.20000 > Rs.20000 Total

No. of Respondents 84 37 9 0 130

Percentage 42.0 18.5 4.5 0.0 100

INTERPRETATION It is followed from the above table that 42.0% of the respondents are paying the income tax amount of below Rs.5000, 18.5% of the respondents are paying the income tax amount of in between Rs.5001-10000 and 18.5% of the respondents are paying the income tax amount of in between Rs.10000-20000.

CHART 5.1.12 AMOUNT OF INCOME TAX LIABILITY

45 40 35 30
PERCENTAGE

42

25 20 15 10 5 0 < Rs.5000 Rs. 5001 to Rs.10000 Rs.10001 to Rs.20000 4.5 18.5

0
> Rs.20000

54

TABLE NO. 5.1.13 FACTS ABOUT OWNING BANK ACCOUNT

S.No. 1. 2.

Opinion Yes No Total

No. of Respondents 127 73 200

Percentage 63.5 36.5 100.0

INTERPRETATION It is inferred from the above table that 63.5% of the respondents are having bank account and 36.5% of the respondents are not having bank account.

CHART 5.1.13 FACTS ABOUT OWNING BANK ACCOUNT

No 37%

Yes 63%

55

TABLE NO. 5.1.14 NUMBER OF INSURANCE POLICIES S.No. 1. 2. 3. 4. Number of Policies One Two Three Four Total No. of Respondents 98 91 5 6 200 Percentage 49.0 45.5 2.5 3.0 100.0

INTERPRETATION It is evident from the above table that 49.0% of the respondents are having only one number of insurance policy followed by 45.5% of the respondents are having two insurance policies, 2.5% of the respondents are having three insurance policies and 3.0% of the respondents are having four insurance policies.
CHART 5.1.14 NUMBER OF INSURANCE POLICIES

60 50 40
PERCENTAGE

49 45.5

30 20

10
2.5 0 1 Policy 2 Policies 3 Policies 4 Policies 3

56

TABLE NO. 5.1.15 TYPE OF PRODUCTS S.No. 1. 2. Type of Products New Traditional Total INTERPRETATION It is clear from the above table that 57.5% of the respondents are purchasing new products launched by Aviva Life and 42.5% of the respondents are purchasing traditional products offered by ICICI Prudential. No. of Respondents 115 85 200 Percentage 57.5 42.5 100.0

CHART 5.1.15 TYPE OF PRODUCTS

Traditional 43% New 57%

57

TABLE NO. 5.1.16 POLICY PREMIUM

S.No. 1. 2. 3.

Premium Amount Less than Rs.2500 Rs.2501 Rs.5000 Above Rs.5000 Total

No. of Respondents 61 101 38 200

Percentage 30.5 50.5 19.0 100.0

INTERPRETATION It is stated from the above table that 30.5% of the respondents are paying the premium amount of less than Rs.2500, 50.5% of the respondents are paying the premium amount in between Rs.2501-5000 and 19.0% of the respondents are paying the premium amount of above Rs.5000.

CHART 5.1.16 POLICY PREMIUM

60 50.5 50 40
PERCENTAGE

30.5 30 20 10 0 Less than Rs.2500 Rs.2501 Rs.5000 Above Rs.5000

19

58

TABLE NO. 5.1.17 PERIOD OF PAYMENT OF POLICY S.No. 1. 2. 3. Period of payment Less than 10 years 10-20 years Above 20 years Total INTERPRETATION It is followed from the above table that 28.0% of the respondents are paying the premium amount in the period of less than 10 years, 49.5% of the respondents are paying the premium amount in the period of 10-20 years and 22.5% of the respondents are paying the premium amount in the period of above 20 years. No. of Respondents 56 99 45 200 Percentage 28.0 49.5 22.5 100.0

CHART 5.1.17 PERIOD OF PAYMENT OF POLICY

60 50 40
PERCENTAGE

49.5

30 20 10 0

28 22.5

Less than 10 years

10-20 years

Above 20 years

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TABLE NO. 5.1.18 POLICY SUM ASSURED S.No. 1. 2. 3. Sum Assured Less than 2 lakhs 2-5 lakhs Above 5 lakhs Total No. of Respondents 82 90 28 200 Percentage 41.0 45.0 14.0 100.0

INTERPRETATION It is obtained from the above table that 41.0% of the respondents sum assured amount is less than Rs.2 lakh, 45.0% of the respondents sum assured amount in between Rs.2-5 lakh and 14.0% of the respondents sum assured amount is above Rs.5 lakh.

CHART 5.1.18 POLICY SUM ASSURED

50 45 40 35
PERCENTAGE

45
41

30 25 20 15 10 5 0 Less than 2 lakhs 2-5 lakhs Above 5 lakhs 14

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TABLE NO. 5.1.19 MODE OF PAYMENT S.No. 1. 2. 3. Mode of Payment Monthly (ECS) Half- yearly Yearly Total No. of Respondents 53 98 49 200 Percentage 26.5 49.0 24.5 100.0

INTERPRETATION

It is stated from the above table that 26.5% of the respondents are paying the premium amount by monthly (ECS), 49.0% of the respondents are paying the premium amount by half-yearly and 24.5% of the respondents are paying the premium amount by both cash and yearly.

CHART 5.1.19 MODE OF PAYMENT

60 50 40
PERCENTAGE

49

30 20 10 0

26.5

24.5

Monthly (ECS)

Half Yearly

Yearly

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TABLE NO. 5.1.20 SOURCES OF AWARENESS ABOUT THE POLICY S.No. 1. 2. 3. 4. Sources Friends Relatives Company Officers Advertisement Total No. of Respondents 49 71 50 30 200 Percentage 24.5 35.5 25.0 15.0 100.0

INTERPRETATION

It is obtained from the above table that 24.5% of the respondents are aware about the policy details through friends followed by 35.5% of the respondents are aware about the policy details through relatives, 25.0% of the respondents are aware about the policy details through company officers and 15.0% of the respondents are aware about the policy details through advertisement.

CHART 5.1.20 SOURCES OF AWARENESS ABOUT THE POLICY

40 35.5

35
30
PERCENTAGE

25 20 15 10 5 0

24.5

25

15

Friends & Relatives

Company

Officers

Advertisement

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TABLE NO. 5.1.21 THE ADDITIONAL BENEFITS WITH POLICY

S.No. 1. 2.

Opinion Yes No Total

No. of Respondents 93 107 200

Percentage 46.5 53.5 100.0

INTERPRETATION

It is followed from the above table that 46.5% of the respondents are having additional benefits with this policy and 53.5% of the respondents are not having additional benefits with this policy.

CHART 5.1.21 THE ADDITIONAL BENEFITS WITH POLICY

56 54
PERCENTAGE

53.5

52 50 48 46.5 46 44 42 Yes No

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TABLE NO. 5.1.22 THE PROPOSER OF THE POLICY

S.No. 1. 2. 3.

PROPOSER Self Spouse Parents Total

No. of Respondents 78 69 53 200

Percentage 39.0 34.5 26.5 100.0

INTERPRETATION

It is identified from the above table that 39.0% of the respondents are paying the premium amount by self, 34.5% of the respondents are paying the premium amount for their spouse and 26.5% of the respondents are paying the premium amount for their parents.

CHART 5.1.22 THE PROPOSER OF THE POLICY

45 40 35 30
PERCENTAGE

39 34.5 26.5

25 20 15 10 5 0 Self Spouse Parents

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TABLE NO. 5.1.23 THE LIFE ASSURED OF THE POLICY S.No. 1. 2. 3. Insurer Self Spouse Children Total No. of Respondents 105 74 21 200 Percentage 52.5 37.0 10.5 100.0

INTERPRETATION

It is found from the above table that 52.5% of the respondents are insured by self, 37.0% of the respondents are insured for their spouse and 10.5% of the respondents are insured for their children.

CHART 5.1.23 THE LIFE ASSURED OF THE POLICY

60 52.5 50 40
PERCENTAGE

37

30 20 10.5 10 0

Self

Spouse

Children

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TABLE NO. 5.1.24 NUMBER OF OPTIONS HAD FOR CHOOSING POLICY S.No. 1. 2. 3. Number of Policy 2 policies 3-4 policies Above 4 policies Total No. of Respondents 52 94 54 200 Percentage 26.0 47.0 27.0 100.0

INTERPRETATION

It is evident from the above table that 26.0% of the respondents are having two options for choosing insurance policy, 47.0% of the respondents are having 3-4 options for choosing an insurance policy and 26.0% of the respondents are having above four options for choosing an insurance policy.

CHART 5.1.24 NUMBER OF OPTIONS HAD FOR CHOOSING POLICY

50 45 40
PERCENTAGE

47

35 30 25 20 15 10 5 0 2 Options 3-4 Options Above 4 Options 26 27

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 CHI - SQUARE ANALYSIS TABLE NO. 5.2.1 OCCUPATION AND TYPE OF POLICY

S.No.

Occupation

Type of Policy New Traditional 14 4 17 37 13 85

Total

1 2 3 4 5

Business Agricultural Self Employed Employed Others Total

6 6 19 52 32 115

20 10 36 89 45 200

Null Hypothesis (H0) Alternative Hypothesis (H1)

There is no significant relationship between occupation and type of policy. There is close relationship between occupation and type of policy.

CHI-SQUARE (2) CALCULATION: Calculated 2 value Degree of freedom Table value Remark = = = = 9.986 4 9.488 Null Hypothesis rejected

INFERENCE: From the above analysis, we find that the calculated value of 2 is greater than the table value and hence, the null hypothesis is rejected. So, there is a close significant relationship between Occupation and type of policy.

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TABLE NO. 5.2.2 EDUCATIONAL QUALIFICATION AND TYPE OF POLICY

S.No.

Educational qualification School College Professional Diploma Total

Type of Policy Total New 17 10 64 24 115 Traditional 5 30 38 12 85 22 40 102 36 200

1 2 3 4

Null Hypothesis (H0)

There is no significant relationship between educational qualification and type of policy.

Alternative Hypothesis (H1)

There is close relationship between educational qualification and type of policy.

CHI-SQUARE (2) CALCULATION: Calculated 2 value Degree of freedom Table value Remark = = = = 23.195 3 7.815 Null Hypothesis rejected

INFERENCE: From the above analysis, we find that the calculated value of 2 is greater than the table value and hence, the null hypothesis is rejected. So, there is a close significant relationship between educational qualification and type of policy.

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TABLE NO. 5.2.3 NUMBER OF OPTIONS FOR CHOOSING A POLICY AND TYPE OF POLICY

S.No.

Number of Options

Type of Policy New Traditional 21 42 22 85

Total

1 2 3

2 options 3-4 options Above 4 options

Total

31 52 32 115

52 94 54 200

Null Hypothesis (H0)

There is no significant relationship between number of options for choosing a policy and type of policy.

Alternative Hypothesis (H1)

There is close relationship between number of options for choosing a policy and type of policy.

CHI-SQUARE (2) CALCULATION: Calculated 2 value Degree of freedom Table value Remark = = = = 0.347 2 5.991 Null Hypothesis accepted

INFERENCE: From the above analysis, we find that the calculated value of 2 is less than the table value and hence, the null hypothesis is accepted. So, there is a no significant

relationship between number of options for choosing a policy and type of policy.

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TWO WAY TABLE TABLE 5.3.1 INCOME AND TYPE OF POLICY

S.No.

Income 13

Type of Policy New Traditional 11 (45.8) 38 (35.5) 33 (54.1) 3 (37.5) 85

Total

< Rs.50000

(54.2) 69 (64.5) 28 (45.9) 5 (62.5) 115

24

Rs.50001 to Rs.100000 Rs.100001 to Rs.200000 > Rs.200000 Total

107

61

8 200

INFERENCE: Maximum of the less than Rs.50000 income respondents are purchasing new type of policy. Maximum of the Rs.50001 to 1 lakh income level respondents are purchasing new type of policy. Maximum of the Rs. 1 lakh to 2 lakh income level respondents are purchasing traditional type of policy. Maximum of the above Rs. 2 lakh income level respondents are purchasing new type of policy.

70

TABLE 5.3.2 NUMBER OF POLICIES TAKEN AND TYPE OF POLICY

S.No.

Number of policy

Type of Policy New 62 (63.3) 49 (53.8) 3 (60.0) 1 (16.7) 115 Traditional 36 (36.7) 42 (46.2) 2 (40.0) 5 (83.3) 85

Total

1 Policy

98

2 Policies

91

3 Policies

4 Policies Total

6 200

INFERENCE: Maximum of the respondents are purchasing one number of new policy. Maximum of the respondents are purchasing two numbers of new policies. Maximum of the respondents are purchasing three numbers of new policies. Maximum of the respondents are purchasing four numbers of traditional policies.

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TABLE 5.3.3 OPINION ABOUT GETTING ANY ADDITIONAL BENEFITS AND TYPE OF POLICY

Type of Policy S.No. Opinion New 48 (51.6) 67 (62.6) 115 Traditional 45 (48.4) 40 (37.4) 85 Total

Yes

93

No Total

107 200

INFERENCE: Maximum of the respondents are getting additional benefits with new type of policy. Maximum of the respondents are not getting any additional benefits with new type of policy.

72

CHAPTER VI FINDINGS, SUGGESTIONS AND CONCLUSION

6.1 FINDINGS It is found from the analysis that maximum of the respondents are belong to 36-45 years of age group. It is noted from the study that maximum (61.0%) of the respondents are male. It is inferred from the analysis that most (80.0%) of the respondents are in urban area. It is noted from the study that maximum (51.0%) of the respondents are educated till the level of professional. It is found from the study that most (31.5%) of the respondents are working as employed. It is evident from the survey that maximum (30.5%) of the respondents are earning Rs.100001- Rs.200000 per annum. It is noted from the analysis that most (49.0%) of the respondents are spending Rs.50001-Rs.100000 per annum. It is found from the survey that most (57.5%) of the respondents are having only four member in their family. It is noted from the analysis that maximum (65.0%) of the respondents are paying income tax. It is evident from the study that most (42.0%) of the respondents are paying the income tax amount of below Rs.5000. It is found from the survey that maximum (63.5%) of the respondents are having bank account. It is evident from the study that most (49.0%) of the respondents are having only one number of insurance policy. It is found from the survey that most (50.5%) of the respondents are paying the premium amount in between Rs.2501-5000. It is evident from the study that maximum (49.5%) of the respondents are having insurance policies period of 10-2- years.

73

It is clear from the survey that most (45.0%) of the respondents sum assured amount in between Rs.2-5 lakh. It is found from the survey that most (49.0%) of the respondents are paying the premium amount by cheque. It is evident from the study that maximum (35.5%) of the respondents are aware about the policy details through advisor. It is stated from the survey that maximum (39.0%) of the respondents are paying the premium amount by self. It is found from the survey that most (52.5%) of the respondents are insured by self. It is clear from the survey that most (47.0%) of the respondents are having 3-4 options for choosing insurance policies. From the analysis it is understood that the respondents preferred mostly as Life time policy. From the study it is found that the respondents preference Shares type saving mode. It is identified from the above table that the reasons for preference the new products is its Term. It is found from the analysis that the occupation of the respondents depends on their purchase type of policy. It is evident from the analysis that there is a close significant relationship between educational qualification and type of policy. It is found from the analysis that there is a no association between number of options for choosing a policy and type of policy. It is found from the study that maximum of the Rs.50001 to 1 lakh income level respondents are purchasing new type of policy.

74

6.2 SUGGESTIONS The company may properly educate the customers as their investments plans are biased with their educational qualification and to whom they conduct campaign frequently to disseminate information of their products. The company may approach agriculturists for selling of their traditional products. The company may focus on 25 to 35 years of people, as their earnings ratio is more these days. The respondents are not aware of new products hence they may advertise more on new products to attract the customer. More strategies and plan are needed to be the leader in the market. A large no of private employees choose insurance for saving tax. The company could benefit by coming up with appropriate measures to influence those people.

75

6.3 CONCLUSION The study titled, A COMPARATIVE STUDY OF TRADITIONAL PRODUCTS WITH NEW ULIP PRODUCTS reveals the perception of the customers are enrolled in the Aviva Life Insurance, Coimbatore branch. This study shows the level of expectation of the customers who have opted life insurance policies as their investment plan based on the parameters like age group occupation, educational level, income level, and so on. The study reveals that Aviva life insurance enjoys the better position in the life insurance market. The study also reveals that company has to concentrate more on rural sector for their traditional products. The present position in at the satisfactory level but to survey in this competitive world the company has to strengthen its promotional tools & the product spectrum. Future innovations in product level can be enhanced.

76

BILBILOGRAPHY
Gilbert A. Churchill Jr. (1997) Fourth Edition, Basic Marketing Research South Western Thomson Learning. Kothari C.R (2002), Research Methodology, Vishwa Prakashan, New Delhi, Second Edition. Kothari, C.R. Second Edition (1997), Research Methodology- Methods and Techniques. Philip Kotler (2003), Marketing Management, Pearson Education Limited, Singapore, Eleventh Edition. Paul Hague, Peter Jackson (1999) Second Edition, Market Research A Guide to Planning Methodology and Evaluation, Kogan Page Limited (BL). Rajendra Nargunkar, Marketing Research A Complete Guide.

WEBSITES www.avivalifeinsurance.com www.irda.com www.google.com

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APPENDIX
A COMPARATIVE STUDY OF TRADITIONAL PRODUCTS WITH NEW PRODUCTS 1) Name: 2) Date of birth: 3) Gender: 4) Native: 5) Occupation: 6) Income per annual: 1) <50000 2) 50001 to 100000 3) 100001 to 200000 4) >200000

7) Expenditure per annual: 1) <50000 2) 50001 to 100000 3) 100001 to 200000 4) >200000

8) How many other persons in a family yarn income? 1) 1 2) 2 3) 3 4) 4

9) Total income of the family: 1) 2) <50000 50001 to 100000

3) 100001 to 200000 4) >200000

78

10) Total members of the family: 1) 1 2) 2 3) 3 4) 4

11) Have you pay income tax? Yes or No

If yes amount 1) <5000 2) 5001 to 10000 3) 10001 to 20000 4) >20000

12) Are you have bank a/c Yes or No If yes specify .

13) How many insurance policies you have?

14) Policy premium?.............................. 15) Policy term. 16) Policy sum assure 17) Mode of payment..

18) By whom you know the policy

19) Are you have the additional benefits with this policy? Yes or No

79

20) Who is the proposer of the policy 21) Who is the life assured of the policy

22) How many options had you for chosen the policy?

23) Please rank the following policy 1) Save and Protect 2) Life Guard 3) Secure 4) Life Time 5) Smart Kid

24) Please rank the following saving modes 1) Gold 2) Shares 3) Debentures 4) Real Estate 5) Bank A/C 6) Insurance

25) Rank the features 1) Term 2) Return 3) Riders 4) Premium 5) Mode

26) Insurance for 1) Investment or 2) Savings

80