1.

Main Text

1.1 Executive Summary ……………………………………………5 1.2 Introduction

Introduction ...…………………………………………….6

Objectives.………………………………………………...8

Limitations..………………………………………………102.Finding & Results

Industry profile..…………………………………………….11

Company profile.…………………………………………...14

Company products………………………………………….18

SWOT Analysis..….………………………………………..21

Research methodology...……………………………………22

Advantage of life insurance..……………………………….27

Conclusion………………………………………………….30

3.

Appendices …………………………………………….……..31

4.
Bibliography..…………………………………

Executive summery

Management Thesis is a part of the MBA Program. The objective of a Management Thesis is to train the
student in designing and implementing a research project in respect of a business problem. A
Management Thesis is the culmination of training provided to the student on practical applicability of
the theoretical concepts learned by them. In this study we look at the options of experiential learning
and embedding to the skills and how the organization get the accreditation from its training course and
develop the employee exactly and smartly using applying different models like 360

feedback, training by telephone, group training, mind mapping, perceptual awareness etc.Training is
essential to order to understand how to implement the core principle of coaching and learning. Most of
the people attracted up to the profession or precisely the once who are likely to make good trainers.
People with integrity like helping other and enjoy making different others. Experiential learning and
embedding skills is an action oriented behavioral situation. The purpose of the action situation is to have
participants generate their own data about each of the key concepts to be studied. To get the best from
experiential learning and embedding skills method, the trainer must be a good observer of behavior.
When the groups start to examine its experiences and reflect upon them, he is in a position to assist
with this proresponsibilities in focusing learning, and making it clearer for each participant, are
extremely important.

INTRODUCATION

Insurance is an upcoming sector, in India the year 2000 was a landmark year for life insurance
industry, in this year the life insurance industry was liberalized after more than fifty years.
Insurance sector was once a monopoly, with LIC as the only company, a public sector enterprise. But
nowadays the market opened up and there are many private players competing in the market. There are
fifteen private life insurance companies has entered the industry. After the entry of these private
players, the market share of LIC has been considerably reduced. In the last five years the private players
is able to expand the market (growing at 30% per annum) and also has improved their market share to
18%. For the past five years private players have launched many innovations in the industry in
terms of products, market channels and advertisement of products, agent training and customer
services etc.

The various life insurers entered India:-

1. HDFC Standard Life Insurance Company Ltd.2. Max New York Life Insurance Co. Ltd.3. ICICI Prudential
Life Insurance Company Ltd.4. Kotak Mahindra Old Mutual Life Insurance Limited.5. Birla Sun Life
Insurance Company Ltd.6. Tata AIG Life Insurance Company Ltd.
6cess. His ………………7. SBI Life Insurance Company Limited.8. ING Vysya Life Insurance Company Private
Limited. 9. Met life India Insurance Company Ltd.10. Royal Sundaram Life Insurance Company Limited.
11. Aviva Life Insurance Co. India Pvt. Ltd.12. Sahara India Insurance Company Ltd.13. Shriram Life
Insurance Company14. Life Insurance Corporation of India.15. Reliance Life Insurance Company
Limited.16. Bharti AXA Life Insurance Company Limited.Through this project I want to study about the
life insurance industry and also doing the comparative analysis between two insurance players in this
industry. They are,

ICICI Prudential Life Insurance

Life insurance corporation of IOBJECTIVES

The entry of foreign MNC’s and the conductive business environment fostered by the government, it is
no wonder that the re-entry of private insurance has marked a second coming for the sector. In just five
years, the sector has undergone a makeover, offering more choice, better services, quicker settlement,
tighter regulation and greater awareness ‘s the environment become more and more competitive and
services and products become alike, creating a differentiation is becoming extremely tough.Thus, this
project objectives is as follows.

To know where Reliance life insurance Company limited & life insurance Corporation of India companies
stands in the market.

Find out the strength and the weakness of their plans.

And making comparative analysis between the products of Reliance life insurance Company limited with
Life insurance Corporation of India.

8ndScope of the study:

This study can be conducted by comparing the performances & products of three private & government
insurance players in insurance industry.

The number of respondents to be surveyed can be improved.



The study can be conducted in Bangalore city only.

This study can be conducted to analyze the market stand of Reliance life insurance Company limited and
Life insurance Corporation of India insurance companies.

9ia 34LIMITATIONS

Thought the present study aims to achieve the above mentioned objectives in full earnest and accuracy,
it may be hampered due to certain limitations, some of the limitations of this study may be summarized
as follows,

This study is limited to two private insurance companies only. (Reliance life insurance company limited &
Life insurance corporation of India)

This study is limited to Bangalore city only.

And getting accurate responses from the respondents due to their inherent problems. They may be
refusing to co-operate.

Respondents may have to be contacted repeatedly or alternate respondent may have to be identified.

For want of tFinding & Results

INDUSTRY PROFILE

“Insurance is a contract between two parties whereby one party called insurer undertakes in exchange
for a fixed amount of money on the happening of a certain event.” Insurance is a protection against
financial loss arising on the happening of an unexpected event. The primary purpose of Life Insurance is
the protection of the family. Insurance in it's various forms protects against such misfortunes by having
the losses of the unfortunate few paid by the contribution of the many who are exposed to the same
risk. This is the essence of insurance- the sharing of losses and substitution of certainty for uncertainty.
Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums
collected from the insuring public and the insurance companies act as trustees of the amount collected.
In is a system by which the losses suffered by a few are spread over many, exposed to similar risks.In the
western world, life insurance evolved mainly from the maritime industry. Started by private financiers
who used to gamble on the lives of seafarers by offering five times the money deposited with them in
case of certain contingencies?In its present form, life insurance has its origin in England and made its
debit in India in the year 1818.Initially, Indians were not considered on par with Europeans as

11ime is restrictedfar as their insurability was concerned. There were also many other failures. It was in
the early part of the 20

th

century that some kind of legislation was made to regulate the industry. From then on life insurance
made great strides in the country.At the time of independence and thereafter, there were more than
200 companies operating in India and not all of them on sound ethical principles. Many factors
combined together to prompt the then government to nationalize the life insurance industry in 1956 to
form the Life Insurance Corporation of India.The years from 1956 to 1999 saw the life insurance
corporation of India emerge as a giant financial institution and the lone organization purveying life
insurance, if we ignore the minimal presence of postal life insurance. The institution succeeded in
penetrating in many areas and segments of the population and in garnering public money for public
welfare.It was in the 1990’s that the winds of change started sweeping over India and brought in their
wake many changes in the economy. Liberalization ensured competition in many fields and there was a
clamor that the insurance industry too is opened up to Private Indian and foreign players to provide the
customer with a choice. The Malhotra committee, appointed in 1993 was given the mandate to study
the industry and to suggest the changes that were necessary to make it modern and in tune with
people’s aspirations. The report submitted by the committee was the precursor of the IRDA Bill.By the
passing of the IRDA Bill, the Insurance sector has been opened up for the private companies to carry on
insurance business. Now the life insurance industry in

12India is rapidly evolving and growing. It has witnessed a big growth as many Indian and foreign were
entered in to the Indian insurance sector. The life insurance industry in India has become fiercely
competitive with the entry of several new players including major multinational insurers after the
deregulation of the sector. It has opened up a range of untapped opportunities for new entrants into
the industry, as the potential market for buyers is high since the emerging market in India has a low
insurance penetration and high growth ratesLife insurance Corporation of India

LIC of India is one of India’s leading financial institutions, offering complete financial solutions that
encompass every sphere of life. From commercial banking to stock broking to mutual funds to life
insurance to investment banking, the group caters to the financials needs of individuals and corporate.
The LIC has a net of over Rs. 1,800 crore and employs over 7,500 employees in its various businesses.
With a presence in 82cities in India and it services a customer base of over 20,00,000.

Date of Establishment
 1 Sep. 1956

Address

1st Floor,West Wing, Mumbai Do-Iv, Yogakshema, Jeevan Bima Marg, Mumbai - 400 021, India

Branches

8 Zonal Offices and 101 Divisional Offices

Management Team

T.S. Vijayan - Chairman D.K. Mehrotra - MD, LIC Thomas Mathew T - MD, LIC A K Dasgupta - MD, LIC
Arun Ramanathan - Secretary, Financial Services, Dept. of Financial Services, Ministry of Finance, Govt of
India Sindhushree Khullar - Addl. Secretary, Dept of Economic Affairs, Ministry of Finance Yogesh Lohiya
- Chairman cum MD, GIC of India T.C. Venkat Subramanian - Chairman & MD, Export Import Bank of
India.

Overview

The largest life insurance company in India, Life Insurance Corporation is fully owned by the
government. It provides individual life insurance, group insurance and pension plans. Its subsidiaries
include Life Insurance Corporation of India International, LIC Nepal, LIC Lanka, LIC Housing Finance and
LICHFL Care Homes. It has over 12 million policy holders and over 9 lakh agents. It has underwritten
more than 120 million policies. LIC saw computers in 1964. Today the company is on the Internet and is
utilizing Information 17. Technology in servicing its clients. It has bagged various award including Loyalty
Awards 2008 in Insurance Sector, NDTV Profit Business Leadership Award – 2007, CNBC Awaaz
Consumer Awards 2007 and Outlook Money NDTV Profit Awards 2007. LIC provides a rewarding career
as sales agents. It offers world class training, freedom to work and unmatched financial strength.
pENSION PLAN PRODUCTS OF LIC INDIA & ITS FEATURES

LIC of India retirement income plan

LIC of India retirement income plan (unit linked)What is the LIC of India retirement income plan?The LIC
of India retirement Income plan is a saving plan designed to meet your post –retirement needs. It is a
plan that gives you “jeene ki azaadi “. It gives you the choice to remain independent even after
retirement.The LIC of India retirement income plan is a participating plan. The plan comes in two forms:
One with cover and one without cover Who can avail of the LIC of India retirement income plan?”How
old do you have to be to avail of this plan?”Minimum age -18 years Maximum age – 60 years For what
term can choose to pay the premiums?5 years – 30 years At what intervals can you pay premiums?”

Quarterly

Half yearly

Annually What are the advantages of this plan?”

You can choose to retire at any age between 45 years and 65 years.

On retirement:

Annuity option:

Early retirement benefits:

Observations

RESEARCH METHODOLOGYTYPE OF RESEARCH

The research includes different options. They are:

Exploratory research:

It is usually a small-scale study undertaken to define the exact nature of a problem and to gain a better
understanding of the environment within which the problem has occurred. It is the initial research,
before more conclusive research is under taken.

Descriptive research:

It is to provide an accurate picture of some aspects of market environment. Descriptive research is used
when the objective is to provide a systematic description

23that is as factual and accurate as possible. It provides the number of time something occurs, or
frequency, lends itself to satisfied calculations such as determining average number of occurrences.

Casual research:

If the objective is too determined which variable might be causing a certain behavior that is whether
there is a cause and effect relationship between variable, casual research must be undertaken. In order
to determine causality, it is important to hold the variable that is assumed to cause the change in the
other variable constant and than measure the changes in the variable. This type of research is very
complex and the researcher can never be completely certain that there are no other factors influencing
the casual relationship, especially when dealing with people’s attitudes and motivation.This research is
about understanding the market stand and also find the strength & weakness of the products of three
insurance companies by making comparing analysis of the products of the companies, mainly descriptive
research methodology are adopted. Descriptive research was adopted since it provides accurate picture
about some aspect of market environment such as which brand is performing well and what the
company can do to improve its market share.

24SAMPLING PROCEDURE

How should the respondents be chosen? To obtain a representative sample and non-probability sample
can be drawn, they are

Judgment sample:

The researcher selects population numbers who are good prospects for accurate information.For
collection of research data judgment-sampling technique is used where all of them are employees of the
three insurance companies as they are good prospect for accurate information.

ACTUAL COLLECTION OF DATAData sources:

The sources of data include either secondary data or primary data and even some times the
combination of both. The present study is more concentration on both primary and secondary data.

Primary data:

Primary data is collected through face-to face interaction with employees of the insurance companies,
by meeting them in personal.

25Secondary data:

The secondary data used for their study are inclusive of the data collected from the internet, catalogues
and brochures and magazines.

Definition

A qualified retirement plan set up by a corporation, labor union, government, or other

organization for its employees. A business could offer a profit-sharing plan, a stock bonus plan,
an Employee Stock Ownership Plan (ESOP), a thrift plan, a target benefit plan, a money
purchase pension plan, or a defined benefit plan.

meaning

A type of retirement plan, usually tax exempt, wherein an employer makes contributions toward
a pool of funds set aside for an employee's future benefit. The pool of funds is then invested on
the employee's behalf, allowing the employee to receive benefits upon retirement.

Investopedia Says:
In many ways, a pension plan is a method in which an employee transfers part of his or her
current income stream toward retirement income. There are two main types of pension plans:
defined-benefit plans and defined-contribution plans.

In a defined-benefit plan, the employer guarantees that the employee will receive a definite
amount of benefit upon retirement, regardless of the performance of the underlying investment
pool.
In a defined-contribution plan the employer makes predefined contributions for the employee,
but the final amount of benefit received by the employee depends on the investment's
performance.

provides replacement for salary when a person is no longer working. In the case of a defined
benefit pension plan , the employer or union contributes to the plan, which pays a predetermined
benefit for the rest of the employee's life based on length of service and salary. Payments may be
made either directly or through an annuity. Pension payments are taxable income to recipients in
the year received. The employer or union has fiduciary responsibility to invest the pension funds
in stocks, bonds, real estate, and other assets; earn a satisfactory rate of return; and make
payments to retired workers. Pension funds holding trillions of dollars are one of the largest
investment forces in the stock, bond, and real estate markets. If the employer defaults, pension
plan payments are usually guaranteed by the Pension Benefit Guaranty Corporation (PBGC) .

In the case of a defined contribution pension plan , such as a 401(k) or 403(b) plan, employees
choose whether or not to contribute to the plan offered by the employer, who may or may not
match employee contributions. Pension benefits are determined by the amount of assets built up
by the employee during his or her years of contributions. Self-employed individuals can also set
up pension plans such as keogh plans . An Individual Retirement Account (IRA) is a form of
pension plan.

See also vesting

Dictionary of Insurance Terms
pension plan

retirement program to provide employees (and often, spouses) with a monthly income payment
for the rest of their lives. To qualify, an employee must have met minimum age and service
requirements. Benefit formulas can be either the defined contribution pension plan (money
purchase plan) or the defined benefit plan . The Employee Retirement Income Security Act of
1974 (ERISA) requires a pension plan to provide an income for the rest of a retired employee's
life, and at least 50% of that amount to the surviving spouse of a retired employee for the rest of
her life, unless the spouse waives this right in writing. Death and disability benefits are also
provided by most pension plans. The tax reform act of 1986 has changed the vesting
requirements. Funds for these plans can be generated under numerous pension plan funding
instruments .

Dictionary of Business Terms

pension plan
See also defined-contribution pension plan , qualified plan or qualified trust , defined-benefit
pension plan
Related Terms:
vesting
right an employee gradually acquires by length of service at a company to receive employer-
contributed benefits, such as payments from a pension fund, profit-sharing plan, or other
qualified plan or trust. Employees must be vested 100% after five years of service or at 20% a
year starting in the third year and becoming 100% vested after seven years.

defined-contribution pension plan

pension plan in which the amount of contributions is fixed at a certain level, while benefits vary
depending on the return from the investments. In some cases, such as 401(k), 403(b), and 457
plans, employees make voluntary contributions into a tax-deferred account, which may or may
not be matched by employers. The level of contribution may be selected by the employee within
a range set by the employer, such as between 2 and 10% of annual salary. In other cases,
contributions are made by an employer into a profit-sharing account based on each employee's
salary level, years of service, age, and other factors. Defined-contribution pension plans, unlike
defined-benefit pension plan, give the employee options of where to invest the account, usually
among stock, bond, and money market accounts. Definedcontribution plans have become
increasingly popular in recent years because they limit a company's pension outlay and shift the
liability for investment performance from the company's pension plan to employees.

qualified plan or qualified trust

pension or profitsharing plan set up by an employer for the benefit of employees that adheres to
the rules set forth by the Internal Revenue Service in 1986. An employer receives an immediate
deduction, the trust income is not taxable, and the employee is taxed on the income only upon
receipt.

defined-benefit pension plan

plan that promises to pay a specified amount (based on a predetermined formula) to each person
who retires after a set number of years of service. Such trust plans pay no taxes on their
investment income. Employees contribute to them in some cases; in others, all contributions are
made by the employer

importance of pention plan

Investing in a pension plan plays a vital role in your life because it is the sole income you can
depend on once you retire. If your organization does not have the facility of pension plan then
it’s your responsibility to start investing least you end up saving nothing.

In other words, the earlier you take the step of investing in some pension plan the better benefits
you reap on the maturity of the plan which will give you the added advantage in the future.

Importance of Pension plans:

• Fixed income: You can’t deny the fact that the cost of living these days are way high and in
such a case when you are retired and have no other source of income to pay your bills or live a
satisfactory life pension plan that you obtained long back comes to your rescue. It’s the only
amount you can fall back on after retirement.

• You can spend quality time with your family and have enough money to travel with them to
any place of your interest.

• In many state you get a state pension plan however the amount given by the state government
will be very less. It won’t be enough to cover your basic needs. If you have a pension plan the
state pension will act as an additional/extra income.

History

The earliest private pension plans in the United States were those of the American Express
Company in 1875 and of the Baltimore and Ohio Railroad in 1880. During the next 50 years
approximately 400 plans were established - mostly in railroad, banking, and public-utility firms.
Pension development in manufacturing was slower, since this was still a young industry with
relatively few aged employees.

Insurers entered the pension business with the issuance of the first group annuity contract by the
Metropolitan Life Insurance Company in 1921. The Equitable Life Assurance Society became
the second company to enter the field by announcing in 1924 its intention of offering a group-
pension service. Insurers have continued in the forefront of the pension movement.

Although the beginnings of private pensions date from the 1800's, the real growth in retirement
programs came after World War II. In 1940 about 4 million people, less than 20 % of all
employees in government and industry, were covered by private pensions. By 1982 more than 51
million wage earners and salaried employees, including about one half of all workers in private
business and three fourths of all governmental workers, were enrolled in nearly 600,000
retirement programs other than Social Security. In the early 1980's, employees and employers
contributed more than $45 bullion annually to these plans. Plan assets were about $650 billion
and experienced an average real growth (since 1975) of 9.2%. Nearly 9 million retired workers
or their survivors received annual retirement benefits exceeding $17 billion under private
pensions and more than 50% of recently retired couples had some coverage.

The rapid growth of pension plans since the 1940's may be attributable to developments that
occurred during World War II. First, high-profit taxes imposed on corporations encouraged some
firms to establish plans. Since employer contributions to a qualified pension plan were tax-
deductible expenses for federal income-tax purposes, pension plans could be funded
inexpensively. At the same time, these contributions were tax-free income for the employee until
he actually received his retirement benefits.

Creation of price and wage stabilization programs to control prices and wages during the
inflationary World War II and Korean War periods was another major factor that helped
stimulate the growth of pensions. Since requests for higher wages were routinely denied under
wage controls, management and labor sought relief and were allowed to establish and liberalize
fringe-benefit programs-including pensions.
In the later postwar years the rate of growth of new plans fell off substantially. Employee interest
centered on cash wage increases that had been denied under wage controls. In the latter part of
the 1940's, however, union leaders in the coal, automobile, and steel industries made pension
plans a central issue in their negotiations. The renewed interest in pensions was in part an effort
to stem a tide of popular criticism generated by heavy wage demands viewed as excessive by the
public. Another factor was that some labor leaders now considered that pensions should
supplement Social Security, which they felt was inadequate as a sole source of retirement
income. Labor's drive for pension benefits was aided by a National Labor Relations Board ruling
in 1948 that employers had a legal obligation to bargain over the terms of pension plans.
Consequently, since the 1950's new pension plans have been established, existing plans have
been liberalized, and employer-sponsored programs have been supplanted by negotiated
contracts.

A final factor encouraging the spread of pension plans is the social and political atmosphere that
has prevailed since the 1930's. During this period the American people have become conscious
of the pressing need to provide for their future economic security. The Depression of the 1930s
swept away the life savings of millions and created a feeling of insecurity that shook the very
foundations of the country. Economic reform took the form of old-age and survivors' insurance
(OASI), a proposal for income maintenance in old age.

Since OASI was intended to be only a "floor" (or minimum) of protection, the way was left open
for supplemental benefits to be provided through private measures. Society came to expect the
employer to hear a share of this burden by providing some retirement benefits. In response to
these social pressures, employers in increasing numbers turned to formal pension programs as
the most economical and satisfactory method of meeting the problem.