Summer Training Project ReportON

“ Study Of Sales Techniques In Insurance And Mutual Funds”

Submitted in partial fulfillment of requirement of award of MBA degree of GGSIPU, New Delhi

Submitted by: Name: ASIF MASOOD Enroll. No: 04115603909 Semester: 3rd

Batch: 2009-11

Northern India Engineering College(Affiliated to GGSIPU)

FC-26, Shastri Park, Delhi-110053

ACKNOWLEDGEMENT

I take it a great privilege to avail this opportunity to express my deep gratitude to all those

who helped me and guided me throughout the project.

I would like to convey my thanks to Ms. Shikha Sharma, our summer training project

incharge, for her kind & generous support which she kept on providing me from time to time.

Without her motivation and guidance this project might not have been possible.

Also I would like to thank Mr. Dev Tanwar, Relationship Manager of Dhanlaxmi Bank and

my project trainer.

It is only due to their efforts that my project could be completed successfully. This project

has required great hard work, effort and dedication which I had tried to put in to the best of

my effort.

This project is to be submitted as a part of practical examination included in MBA curriculum of

Guru Gobind Singh Indraprastha University.

(ASIF MASOOD)

INDEX

S. No. PAGE NO.

1) OBJECTIVES OF THE STUDY 2) INTRODUCTION TO THE COMPANY

3) LITERATURE REVIEW

4) RESEARCH METHODOLOGY

5) DATA ANALYSIS & FINDINGS

6) CONCLUSION

7) RECOMMENDATIONS

8) BIBLIOGRAPHY

9) ANNEXURE

OBJECTIVES OF THE STUDY

Project study which is being conducted by me for the last two month is not only a formality

for the fulfillment of the two year full time MBA. But being a management student I tried my

best to extract best of the information available in the market for the use of society and

people. Objectives which are being covered by me in this project are as following-

To know the perception and conception of customers towards

banking products and specially focused for Dhanlaxmi Bank’s product.

To study the marketing strategies adopted to promote Dhanlaxmi Bank’s Life

Insurance.

To know about the products of Dhanlaxmi Bank’s Life

Insurance.

To increase the product awareness of Dhanlaxmi Bank.

To know about the various techniques that can be helpful in selling

Insurance and Mutual funds.

To know the need for Life Insurance.

To study the nature of Insurance and Mutual fund products in India.

To know the consumer responses about Dhanlaxmi Bank life insurance policy.

EXECUTIVE SUMMARY

The project work is pursued as a part of MBA Curriculum at Northern India

Engineering College affiliated to GGSIPU, Delhi. It is undertaken as a

Summer Internship at Dhanlaxmi Bank. The project is done under expert

supervision and guidance of Ms. Shikha Sharma (Lecture in Marketing) and

Mr. Dev Tanwar (Relationship Manager, Dhanlaxmi Bank, Karol bagh).

The Project is about the study of marketing and sales of financial products

and also the efforts done to make improvements in the customer acquisition

process for better results.

In today’s competitive world I find that the insurance sector has the maximum growth and

potential as compared to the other sectors. I find that the agents are the only way for the

company through which policies and benefits can be explained to the customer.

Insurance industry is growing rapidly day-by-day. India itself has population of over

1.12billion out of which roughly 33.2% people are insured. This clearly shows that most of

the people are not insured just because they don’t know much about insurance. Most people

have some common queries about life insurance.

The project talks about the various factors considered by the customers while going for

investment in mutual fund.

The initial pages talk about the introduction and objectives of the study which is followed by

literature review throwing light on mutual funds andInsurance.

The closing part consists of findings, recommendations, limitations, conclusion and

bibliography. The questionnaire has been annexed to the report.

A market survey was done on life insurance and mutual fund companies. Different questions

regarding the insurance companies and policies were asked to the prospective customers and

based on that a research is done to know about the shadow of insurance and mutual fund in

the market. The areas covered under the survey were North-East Delhi & Central Delhi.

The report contains details of different life insurance and mutual fund companies, which are

in healthy competition with Dhanlaxmi Bank and Bajaj Allianz.

The project dealt with various fields like:

1. Mutual funds

2. Life insurance

3. General insurance

INTRODUCTION

WHAT IS INSURANCE?

Insurance in its basic form is defined as a “legal contract between two parties whereby one

party called insurer undertakes to pay a fixed amount of money on the happening of a

particular event, which may be certain or uncertain.” The other party called insured pays in

exchange a fixed sum known as premium.

Insurance is desired to safeguard oneself and one’s family against possible losses on account

of risks and perils. It provides financial compensation for the losses suffered due to the

happening of any unforeseen events.

In simple terms it is a contract between the person who buys Insurance and an Insurance

company who sold the Policy. By entering into contract the Insurance company agrees to pay

the Policy holder or his family members a predetermined sum of money in case of any

unfortunate event for a predetermined fixed sum payable which is in normal term called

Insurance Premiums.

Insurance is basically a protection against a financial loss which can arise on the happening

of an unexpected event.

Insurance companies collect premiums to provide for this protection. By paying a very small

sum of money a person can safeguard himself and his family financially from an unfortunate

event.

For Example if a person buys a Life Insurance Policy by paying a premium to the Insurance

company , the family members of insured person receive a fixed compensation in case of any

unfortunate event like death.

There are different kinds of Insurance Products available such as :-

Life Insurance

Vehicle Insurance

Home Insurance

Travel Insurance

Health Insurance

Mediclaim Insurance

Marine Insurance

Fire Insurance

INSURANCE IN INDIA

The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance

Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972,

Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts.

With such a large population and the untapped market area of this population Insurance

happens to be a very big opportunity in India. Today it stands as a business growing at the

rate of 15-20 % annually. Together with banking services, it adds about 7 % to the country’s

GDP .In spite of all this growth the statistics of the penetration of the insurance in the country

is very poor. Nearly 80% of Indian populations are without Life insurance cover and the

Health insurance. This is an indicator that growth potential for the insurance sector is

immense in India.

The key element of the reform process was Participation of overseas insurance companies

with 26% capital. Creating a more efficient and competitive financial system suitable for the

requirements of the economy was the main idea behind this reform.

 

Since then the insurance industry has gone through many sea changes .The competition LIC

started facing from these companies were threatening to the existence of LIC .since the

liberalization of the industry the insurance industry has never looked back and today stand as

the one of the most competitive and exploring industry in India. The entry of the private

players and the increased use of the new distribution are in the limelight today. The use of

new distribution techniques and the IT tools has increased the scope of the industry in the

longer run.

The insurance sector in India has come a full circle from being an open competitive market to

nationalization and back to a liberalized market again. Tracing the developments in the Indian

insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.

A well-developed and evolved insurance sector is necessary for economic development as it

provides long-term funds for infrastructure development and at the same time strengthens the

risk taking ability. It has estimated that, over the next ten years India would require

investments of the order of one trillion US dollar. The Insurance sector, to some extent, can

enable investments in infrastructure development to sustain economic growth of the country.

Insurance is a federal subject in India.

HISTORY OF INSURANCE IN INDIA

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 given in the table

Year Milestones in the life insurance business in India 

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, 1956, with a capital contribution of Rs. 5 crore

from the Government of India.

Insurance in India started without any regulation in the Nineteenth Century. It was a typical

story of a colonial era: a few British insurance companies dominating the market serving

mostly large urban centres. After the independence, it took a dramatic turn. Insurance was

nationalized. First, the life insurance companies were nationalized in 1956, and then the

general insurance business was nationalized in 1972. Only in 1999 private insurance

companies have been allowed back into the business of insurance with a maximum of 26% of

foreign holding. In what follows, we describe how and why of regulation and deregulation.

The entry of the State Bank of India with its proposal of bank assurance brings a new

dynamics in the game. We study the collective experience of the other countries in Asia

already deregulated their markets and have allowed foreign companies to participate. If the

experience of the other countries is any guide, the dominance of the Life Insurance

Corporation and the General Insurance Corporation is not going to disappear any time soon.

Insurance has a long history in India. Life Insurance in its current form was introduced in

1818 when Oriental Life Insurance Company began its operations in India. General Insurance

was however a comparatively late entrant in 1850 when Triton Insurance company set up its

base in Kolkata.

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

a) Pre Nationalization

b) Nationalization and

c) Post Nationalization.

Life Insurance was the first to nationalize in 1956. Life Insurance Corporation of India was

formed by consolidating the operations of various insurance companies. General Insurance

followed suit and was nationalized in 1973. General Insurance Corporation of India was set

up as the controlling body with New India, United India, National and Oriental as its

subsidiaries. The process of opening up the insurance sector was initiated against the

background of Economic Reform process which commenced from 1991. For this purpose

Malhotra Committee was formed during this year who submitted their report in 1994 and

Insurance Regulatory Development Act (IRDA) was passed in 1999. Resultantly Indian

Insurance was opened for private companies and Private Insurance Company effectively

started operations from 2001.

PRESENT SCENARIO OF INSURANCE IN INDIA

The insurance sector was opened up for private participation four years ago. For years now,

the private players are active in the liberalized environment. The insurance market have

witnessed dynamic changes which includes presence of a fairly large number of insurers both

life and non-life segment. Most of the private insurance companies have formed joint venture

partnering well recognized foreign players across the globe.

There are now 29 insurance companies operating in the Indian market – 14 private life

insurers, nine private non-life insurers and six public sector companies. With many more

joint ventures in the offing, the insurance industry in India today stands at a crossroads as

competition intensifies and companies prepare survival strategies in a detariffed scenario.

There is pressure from both within the country and outside on the Government to increase the

Foreign Direct Investment (FDI) limit from the current 26% to 49%, which would help JV

partners to bring in funds for expansion.

There are opportunities in the pensions sector where regulations are being framed. Less than

10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first licence

for a standalone health company in the country as many more players wait to enter. The

health insurance sector has tremendous growth potential, and as it matures and new players

enter, product innovation and enhancement will increase. The deepening of the health

database over time will also allow players to develop and price products for larger segments

of society.

PERFORMANCE OF THE INDIAN INSURACE MARKET

The following points will provide you an insight into the insurance market in India and its

fast expanding prospects. The report is well supported by data based on detailed analysis that

would help investors, financial service providers and global banking players to venture into

the Indian insurance market.

Taking into account the changing socioeconomic demographics rate of GDP growth,

behavior of consumers, and occurrences of natural calamities at regular intervals the market

of Life Insurance in India is expected grow to the value around US $ 41.44 billion by the year

2009. The Market is expected to grow at a compounded annual growth rate (CAGR) of more

than 200% year over year (YOY) from year 2006 onwards.

65% of the general insurance market is controlled by private house that already exists in

the market.

However in automobile insurance, public sector covers a substantial 68% of the total

market value.

Among individual companies that are worthy of mentioning, ICICI Lombard enjoys a

whopping 53% market share in Accident Insurance while the remaining 47% is shared by

New India Assurance and United India Insurance both belonging to the public sector

The other key players of the market include:

A) In Public Sector:

Life insurance Corporation(LIC) of India, National Insurance Company Limited, Oriental

Insurance Limited, New India Assurance Company Limited and United India insurance

Company Limited.

B) In Private Sector:

ICICI prudential Life Insurance, Bajaj Allianz, SBI Life, HDFC Standard, Birla Sunlife,

Aviva Life Insurance, Kotak Mahindra old mutual, Max New York Life and Met life, Tata

AIG Life, ING Vysya. Thus, the ever increasing population of the country will ensure

constant boom in the India Insurance market in the distant future.

INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY (IRDA)

The Insurance Regulatory and Development Authority (IRDA) is a national agency of

the Government of India, based in Hyderabad. It was formed by an act of Indian Parliament

known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging

requirements. Mission of IRDA as stated in the act is "to protect the interests of the

policyholders, to regulate, promote and ensure orderly growth of the insurance industry and

for matters connected therewith or incidental thereto."

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 launched the IRDA’s 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 12 life insurance and 6 general

insurance companies have been registered.

WHAT IS LIFE INSURANCE?

Life insurance or life assurance is a contract between the policy owner and the insurer, where

the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or

individuals' death or other event, such as terminal illness or critical illness. In return, the

policy owner agrees to pay a stipulated amount called a premium at regular intervals or in

lump sum.

Life Insurance is insurance for you and your family's peace of mind. Life insurance is a

policy that people buy from a life insurance company, which can be the basis of protection

and financial stability after one's death. Its function is to help beneficiaries financially after

the owner of the policy dies. 

It can also be a form of savings in the long run if you purchase a plan, which offers the option

of contributing regularly. Additionally, a little known function of life insurance is that it can

be tied in with a person's pension plan. A person can make contributions to a pension that is

funded by a life insurance company. These are considered private pension arrangements.

In addition, you should also make a list of what you feel needs to be protected in your

family's way of life. With a life insurance policy in place, you can:

provide security for your family

protect your home mortgage

take care of your estate planning needs

look at other retirement savings/income vehicles

In a broad sense, life insurance may be viewed as an investment. Insurance

premiums represent the sacrifice and the assured sum the benefit. The

important types of insurance policies in India are:

Endowment assurance policy

Money back policy

Whole life policy

Term assurance policy

SIP’s

Important milestones in the life insurance business in India:

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, foreign insurers and provident societies were took over by Central

government and nationalized. LIC formed by an Act of Parliament- LIC Act 1956-

with a capital contribution of Rs. 5 crores from the Government of India.

HISTORICAL PERSPECTIVE ABOUT LIFE INSURANCE IN

INDIA:

The history of life insurance in India dates back to 1818 when it was considered as a means to

provide for English Widows. Interestingly in those days, a higher premium was charged for

Indian lives than the non-Indian lives, as Indian lives were considered more risky for

coverage.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first

company to charge same premium for both Indian and non-Indian lives. The Oriental

Assurance Company established in 1880. The General insurance business in India, on the

other hand, can trace its roots to the Triton (Tital) Insurance Company Limited, the first

general insurance company established in the year 1850 in Calcutta by the British. Until the

end of nineteenth century, insurance business was almost entirely in the hands of overseas

companies.

Insurance regulation formally began in India with the passing of the Life Insurance

Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 20's and

30's sullied insurance business in India. By 1938, there were 176 insurance companies. The

first comprehensive legislation was introduced with the Insurance Act of 1938 that provided

strict State Control over insurance business. The insurance business grew at a faster pace

after independence. Indian companies strengthened their hold on this business but despite the

growth that was witnessed, insurance remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and

provident societies under one nationalized monopoly corporation and Life Insurance

Corporation (LIC) was born. Nationalization was justified because it would create much-

needed funds for rapid industrialization. This was in conformity with the Government's

chosen path of State lead planning and development.

The (non-life) insurance business continued to thrive with the private sector until 1972. Their

operations were restricted to organized trade and industry in large cities. The general

insurance industry was nationalized in 1972. India Assurance Company, Oriental Insurance

Company and United India Insurance Company are subsidiaries of the General Insurance

Company (GIC).

NEED FOR LIFE INSURANCE:

You need Life Insurance because typically the need for income

continues for those who are financially dependent on you, but there

is no guarantee of your ability to earn consistently and for the rest

of your life. Life insurance can help you safeguard the financial

needs of your family. This need has become even more important due to steady disintegration

of the prevalent joint family system, and emergence of nuclear families. The need to protect

your family's ever growing needs is why you need Life Insurance.

Life Insurance Plan ensures that you are better prepared to face uncertainties in a number of

ways:

A) Protection:

You need life insurance to be there and protect the people you love, making sure that your

family has a means to look after itself after you are gone. It is a thoughtful business concept

designed to protect the economic value of a human life for the benefit of those financially

dependent on him. That is a good reason. Supposing you are suffered by an injury that keeps

you away from earning? Would you like to be a financial burden on your family, already

losing out on your salary? With a life insurance policy, you are protected. Your family is

protected.

B) Retirement:

Life insurance makes sure that have regular income after retire and also helps to maintain

standard of living. It can ensure that your post-retirement years will be spent in peace and

comfort.

C) Savings and Investments:

Insurance is a means to Save and Invest. The periodic premiums are like Savings and you are

assured of a lump sum amount on maturity. A policy can come in really handy at the time of

your child‟s education or marriage! Besides, it can be used as supplemental retirement

income.

D) Tax Benefits:

Life insurance is one of the best tax saving options today. Tax can be saved twice on a life

insurance policy-once when you pay your premiums and once when you receive maturity

benefits. Money saved is money earned.

WHAT IS GENERAL INSURANCE?

 

Insurance other than ‘Life Insurance’ falls under the category of General Insurance. General

Insurance comprises of insurance of property against fire, burglary etc, personal insurance

such as Accident and Health Insurance, and liability insurance which covers legal liabilities.

There are also other covers such as Errors and Omissions insurance for professionals, credit

insurance etc.

 

Non-life insurance companies have products that cover property against Fire and allied perils,

flood storm and inundation, earthquake and so on. There are products that cover property

against burglary, theft etc. The non-life companies also offer policies covering machinery

against breakdown,there are  policies that cover the hull of ships and so on. A Marine Cargo

policy  covers goods in transit including by sea, air and road. Further, insurance of motor

vehicles against damages and theft forms a major chunk of non-life insurance business.

 

In respect of insurance of property, it is important that the cover is taken for the actual value

of the property to avoid being imposed a penalty should there be a claim. Where a property is

undervalued for the purposes of insurance, the insured will have to bear a rateable proportion

of the loss. For instance if the value of a property is Rs.100 and it is insured for Rs.50/-, in the

event of a loss to the extent of say Rs.50/-, the maximum claim amount payable would be

Rs.25/- ( 50% of the loss being borne by the insured for underinsuring the property by 50% ).

This concept is quite often not understood by most insureds.

 

Personal insurance covers include policies for Accident, Health etc. Products offering

Personal Accident cover are benefit policies. Health insurance covers offered by non-life

insurers are mainly hospitalization covers either on reimbursement or cashless basis. The

cashless service is offered through Third Party Administrators who have arrangements with

various service providers, i.e., hospitals. The Third Party Administrators also provide service

for reimbursement claims. Sometimes the insurers themselves process reimbursement claims.

 

Accident and health insurance policies are available for individuals as well as groups. A

group could be a group of employees of an organization or holders of credit cards or deposit

holders in a bank etc. Normally when a group is covered, insurers offer group discounts.

 

Liability insurance covers such as Motor Third Party Liability Insurance, Workmen’s

Compensation Policy etc offer cover against legal liabilities that may arise under the

respective statutes— Motor Vehicles Act, The Workmen’s Compensation Act etc. Some of

the covers such as the foregoing (Motor Third Party and Workmen’s Compensation policy ) 

are compulsory by statute. Liability Insurance not compulsory by statute is also gaining

popularity these days. Many industries insure against Public liability. There are liability

covers available for Products as well.

 

There are general insurance products that are in the nature of package policies offering a

combination of the covers mentioned above. For instance, there are package policies

available for householders, shop keepers and also for professionals such as doctors, chartered

accountants etc. Apart from offering standard covers, insurers also offer customized or tailor-

made ones.

 

Suitable general Insurance covers are necessary for every family. It is important to protect

one’s property, which one might have acquired from one’s hard earned income. A loss or

damage to one’s property can leave one shattered. Losses created by catastrophes such as the

tsunami, earthquakes, cyclones etc have left many homeless and penniless. Such losses can

be devastating but insurance could help mitigate them. Property can be covered, so also the

people against Personal Accident. A Health Insurance policy can provide financial relief to a

person undergoing medical treatment whether due to a disease or an injury.

 

Industries also need to protect themselves by obtaining insurance covers to protect their

building, machinery, stocks etc. They need to cover their liabilities as well. Financiers insist

on insurance. So, most industries or businesses that are financed by banks and other

institutions do obtain covers. But are they obtaining the right covers? And are they insuring

adequately are questions that need to be given some thought. Also organizations or industries

that are self-financed should ensure that they are protected by insurance.

 

Most general insurance covers are annual contracts. However, there are few products that are

long-term.

 

It is important for proposers to read and understand the terms and conditions of a policy

before they enter into an insurance contract. The proposal form needs to be filled in

completely and correctly by a proposer to ensure that the cover is adequate and the right one.

HISTORY OF GENERAL INSURANCE

Till May, 1971 there were 107 companies operating in the market, both Indian and foreign.

Some companies were in the co-operative sector. The size of the companies and their reach

varied to a great extent. Whereas many companies used to underwrite all types of covers fire,

marine& miscellaneous insurance, some other restricted their area of operation basically to

selected field only like Marine Hull Business.

The government in May, 1971 took over the undertaking of all the companies as a prelude to

ultimate nationalization. This was brought about under the General insurance business

(Nationalisation) Act, 1972.

Thus, effective 01/01/1973 a single holding company was created named as General

Insurance Corporation of India, with 4 subsidiaries to take care of the general insurance

business operation.

Present Scenario:

At present 13 companies are operating in general insurance market for

direct business. The four public sector companies mentioned above and the following

companies in the private sector. These private companies were formed after the passing of the

IRDA Act, 1999. This removed the prohibition existing in the GIBNA Act relating to

formation of insurance companies other than the four public sector companies.

The companies in the private sector are:-

1. Bajaj Allianz General Insurance Co.Ltd.

2. Cholamandalam General Insurance Co. Ltd.

3. HDFC Chubb General Insurance Co. Ltd.

4. ICICI LOMBARD General Insurance Co. Ltd.

5. IFFOCO Tokio General Insurance Co. Ltd.

6. Reliance General Insurance Co. Ltd.

7. Royal Sundaram Alliance Insurance Co. Ltd.

8. Tata AIG General Insurance Co. Ltd.

Fundamentals of General Insurance companies are business houses. The

product they sell is financial protection. To succeed and survive, they must

cover their costs, which include payments to cover the losses of

policyholders, as well as sales and administrative expenses, taxes and

dividends. Insurance companies have two sources of income for covering

these costs: premium and investment income. The premium are collected on a

regular basis and invested in Government Bonds, Gift stocks, mutual funds,

real estates and other conservative avenues. However, investment income

depends on market conditions, interest rates, economy etc and varies from

year to year. Because of the uncertainty associated with the investment

income, insurance companies must generate enough income form premium to

cover the bulk of their expenses. The primary function of insurance is to

provide protection against financial losses caused by unforeseen events. This

protection is available to individuals, businessmen and large companies alike.

Types of General Insurance

Health Individual Mediclaim

Group Mediclaim

Reliance Health Wise Policy

Personal Accident Personal Accident

Group Personal Accident

Fire Standard Fire and Special Perils

Consequential Loss (Fire)

Industrial All Risks

Engineering Erection All Risks/Storage-cum-Erection

Contractor’s All Risks

Contractor’s Plant and Machinery

Machinery Breakdown Insurance

Machinery Loss of Profits Insurance

Boiler and Pressure Plant Insurance

Electronic Equipment Insurance

Marine Marine Cargo Insurance

Motor Automobile Insurance

Liability Directors and Officers Liability

Public Liability (Act)

Public Liability

Product Liability

Professional Indemnity

Workmen’s compensation

Miscellaneous Industry Care

Commercial Care

Office Package

Fidelity Guarantee

Burglary and Housebreaking

Money Insurance

Householder’s Package

Shopkeeper’s Package

Travel Individual and Family

Asia

Student

Corporate

WHAT IS MUTUAL FUND

A mutual fund represents a vehicle for collective investment. When

you participate in a scheme of a mutual fund, you become a part-owner of the

investments held under that scheme. The most important characteristic of a

mutual fund is that the contributors and the beneficiaries of the fund are the

same class of people, namely the investors. The term “MUTUAL” means that

investors contribute to the pool, and also benefit from the pool.  

The money held in the trust is divided into shares of equal value called

“UNITS”.  Investors become “unit-holders” and are allocated units based on

the amount of their investment. The income earned through these investments

and the capital appreciation realized is shared by its unit holders in

proportion to the number of units owned by them.  

Investments in securities are spread across a wide cross-section of

industries and sectors and thus the risk is reduced. Diversification reduces

the risk because all stocks may not move in the same direction in the same

proportion at the same time. Mutual fund issues units to the investors in

accordance with quantum of money invested by them. Investors of mutual

funds are known as unit holders.

Thus a mutual fund is the most suitable investment for the

common man as it offers an opportunity to invest in a diversified,

professionally managed basket of securities at a relatively low cost.  

Fig.5.1 Concept of mutual fund

The shift in investor preference towards mutual funds has been facilitated by:

Fiscal incentives

Increasing returns from debt mutual fund investments in the last few

years due to the secular decline in interest rates

The growing number of choices available to investors

The gradual change in the investors’ risks profile and returns.

Why one should invest in mutual funds?

Mutual funds are preferable mode of investment due to the following

reasons: 

Reduction of risk

Professional Management

Tax benefits

Low transaction costs

Highly regulated

Liquidity

Easy to administer

History of the Indian Mutual Fund Industry:

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at

the initiative of the Government of India and Reserve Bank the. The history of mutual funds

in India can be broadly divided into four distinct phases

First Phase – 1964-87

Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by

the Reserve Bank of India and functioned under the Regulatory and administrative control of

the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial

Development Bank of India (IDBI) took over the regulatory and administrative control in

place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988

UTI had Rs.6, 700 crores of assets under management.

Second Phase – 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks

and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India

(GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987

followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89),

Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund

(Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund

in December 1990.

At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004

crores.

 

Third Phase – 1993-2003 (Entry of Private Sector Funds)

 With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year

in which the first Mutual Fund Regulations came into being, under which all mutual funds,

except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged

with Franklin Templeton) was the first private sector mutual fund registered in July 1993.

 

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and

revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI

(Mutual Fund) Regulations 1996.

 

The number of mutual fund houses went on increasing, with many foreign mutual funds

setting up funds in India and also the industry has witnessed several mergers and acquisitions.

As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805

crores. The Unit Trust of India with Rs.44, 541 crores of assets under management was way

ahead of other mutual funds.

 

Fourth Phase – since February 2003

 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was

bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of

India with assets under management of Rs.29, 835 crores as at the end of January 2003,

representing broadly, the assets of US 64 scheme, assured return and certain other schemes.

The Specified Undertaking of Unit Trust of India, functioning under an administrator and

under the rules framed by Government of India and does not come under the purview of the

Mutual Fund Regulations.

 

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is

registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation

of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of assets under

management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual

Fund Regulations, and with recent mergers taking place among different private sector funds,

the mutual fund industry has entered its current phase of consolidation and growth.

Types of Mutual Funds

There are different  ways of classifying mutual funds:

An EQUITY FUND invests mainly in stocks and shares of companies.

Equity Funds typically aim to generate long term growth  in the unit

capital. There are a variety of ways in which an equity portfolio can be

created for investors. There are thus the following choices in equity

funds: 

o Simple equity funds

o Industry Specific funds

o Index funds

o ELSS

Target market:

They are ideal for investors having a long term perspective, Speculative

outlook- the equity cult, who would like to make gains in the shortest period

of time and investors in their prime earning years-specifically the young who

have a decent earning and can take some kind of risk.  

A DEBT FUND invests mainly in debt instruments like bonds and

debentures, with high and consistent dividend payout. These funds give

decent returns but the capital appreciation is not much. There are a

variety of ways in which a debt portfolio can be created for investors.

There are thus the following choices in debt funds:  

o Liquid and Money market funds

o Gilt Funds

o Monthly Income Plan

o Floating rate funds

Target market:

Retired people and others with a need for stability and regular income.

Investors who need some income to supplement their earnings.  

A BALANCED FUND invests in both equity and debt instruments. It

aims to generate growth and income by periodically distributing its

assets over both types of securities.

Target market:

These ideal for investors looking for a combination of income and moderate

growth. 

  

COMPANY PROFILE

Incorporated in November 1927 at Thrissur, Kerala by a group of ambitious entrepreneurs,

The Dhanalakshmi Bank Ltd. started business with Rs. 11,000 as capital and seven

employees. It became a Scheduled Commercial Bank in 1977, and in 2009, was awarded

approvals by the Reserve Bank of India for opening 66 branches.

 

The Bank's Board of Directors is comprised of eminent professionals who provide leadership

and guidance to a strong, multi skilled management team. Its comprehensive range of

banking and financial services and its extensive nationwide presence has set the stage for an

era of unprecedented growth.

Vision & Mission

"To become a strong and innovative bank with integrity and social responsibility and to

maximize customer satisfaction and the satisfaction of its employees, shareholders and the

community."

Achievements, Affiliations and Milestones

Achievements

Serviced business worth Rs. 12,155 crores as on 31 March 2010, comprising deposits

worth Rs. 7098 crores and advances worth Rs. 5056 crores.

Earned a net profit of Rs. 23.30 crores for the financial year ended 31st March 2010,

with a capital adequacy ratio of 12.99% (Basel II) during the same period.

Put in place the Real Time Gross Settlement (RTGS) and National Electronic Fund

Transfer (NEFT) systems to facilitate large value payments and settlements online in

real time, on a transaction-by-transaction basis.

Set up NRI Boutiques (Relationship Centres) across nine locations in Kerala and

Tamil Nadu, with plans to open specialized NRI outlets at potential locations with

emphasis on impeccable service levels.

Dispensed Micro Credit among private and public banks in Kerala, the Bank's

outstanding under micro credit was Rs. 270.62 crores at the end of March 2009.

Attained ISO 9001-2000 certification for the Bank's corporate office at Thrissur and

industrial finance branch at Kochi.

Affiliations

Insurance Partner: Bajaj Allianz

Mutual Fund Partner: Kotak Mahindra

Milestones

1927 - Founded on 14 November, 1927, at Thrissur, Kerala

1975 - Set up the first branch outside the home state of Kerala, at

Chennai Mount Road

1977 - Designated as Scheduled Commercial Bank by the Reserve

Bank of India (RBI)

1980 - 100-strong branch network

1986 - Total business of Rs. 100 crores

1996 - First public issue. Total business of Rs. 1,000 crores

2000- Installed the first ATM

2002 - First Rights Issue

2002 - Platinum Jubilee year

2007 - Total business of Rs. 5,000 crores. 80th Anniversary year

2008- Total business of Rs. 7,500 crores. Second Rights Issue

2009/10- Expanded branch network to 270 branches. Total business

surpassed Rs. 12,000 crores

PRODUCTS & SERVICES OFFERED

(I) UNIT LINKED INSURANCE PLANS

Market linked insurance plans invest the premium in to the equity, debt and cash markets by

the way of allocating units, which like any other mutual fund have a NAV and the customer

is free to switch between one fund class to another depending on the risk factor he wishes to

be in. ULIPs offer a better return than the traditional endowment plans and offer a great deal

of flexibility along with great returns making them the finest product offering. We at Bajaj

Allianz Life Insurance have developed a number of ULIP products which range from single

premium to a regular premium option along with investment funds ranging from index funds

to mid-cap funds and debt market linked funds.

Regular Premium

Max Advantage Insurance Plan

iGain II

Single Premium

Wealth Insurance Plan

Shield Insurance Plan

Max Advantage Insurance Plan

Make your returns soar as possible by pushing your investments upwards, with Bajaj Allianz

Max Advantage Insurance Plan. This exciting new ULIP product gives you the guarantee to

encash your units at maturity, at the highest unit price achieved by the fund over the 10-year

term of your policy.

Key Highlights:

The plan offers you key benefits of:

Investment in Max Gain Fund II guarantees highest unit price based on the highest

NAV for policy tenure of 10 years.

Refund of 60% of total regular premium allocation charge as Guaranteed Addition at

maturity.

Option to select/ change premium payment term from 5 to 7 years.

Flexibility to pay unlimited top-up premium** and make partial withdrawals.

Option to choose from 5 investment funds to invest.

Unlimited free switches.

Wealth Insurance Plan

Bajaj Allianz Wealth Insurance Plan is a hassle-free way of investing your money and at the

same time taking care of your insurance needs. The plan gives you the benefits of paying a

single premium, so you don't have to worry about due dates, repetitive paperwork and

renewals or constantly make phone calls to your financial advisor. Apart from this, the high

allocation offered by the plan allows you to meet your financial goals.

Wealth Insurance Plan provides you the option to decrease your sum assured. Systematic

switching option to manange your investments better and optional rider benefits to enhance

your protection are also

some features of Wealth Insurance Plan.

So invest today and jiyo befikar.

Key Highlights:

Wealth Insurance Plan offers the following key benefits:-

Loyalty addition up to 7% of single premium at the end of the fifth year.

Option to receive the maturity benefits as settlement option.

Maximum flexibility to pay unlimited top-up premium and make partial withdrawals.

Option to decrease your sum assured.

Systematic switching option to manage your investments better.

Optional additional rider benefits to enhance your protection.

Shield Insurance Plan

Bajaj Allianz Shield Insurance Plan, a single premium fixed-term unit-linked insurance plan

gives you the choice of investment options to achieve your desired objective at maturity. This

plan also gives you guaranteed unit price at maturity

with Shield Plus Fund III.

Bajaj Allianz Shield Insurance Plan is a simple to understand fixed-term unit-linked life

insurance plan. Single premiums & any top-up premium paid by you, net of premium

allocation charge is invested in the fund(s) of your choice and units are allocated depending

on the unit price of the fund(s). The value of your policy is the total value of

units that you hold in the fund.

The mortality charge, the policy administration charge and the rider premium charge(s) (if

any) are deducted monthly through cancellation of units. Fund Management Charge is

adjusted in the unit price.

Key Highlights:

Bajaj Allianz Shield Insurance Plan provides you with the following:

Single premium plan with fixed term of 10 years

Sum Assured of 1.1/1.25 to 5 times of the Single Premium

Choice of 9 funds for investment, including new 3 funds - Shield Plus Fund III,

Growth Plus Fund III and Bluechip Equity Fund

Guaranteed Addition via Return of up to 6 % of the Single Premium at maturity **

Conditions apply

Shield Plus Fund III offers you guarantee of minimum unit price at maturity. *

Conditions apply

Maximum flexibility through :

-Option to decrease sum assured

-Unlimited top-up premium payment

-Partial withdrawals anytime after five years from the commencement of the policy

-Unlimited free switches

-Optional riders to enhance your protection

(II) TERM PLANS

The sole objective of Term plans is to serve the protection needs of the customers and by

doing so, safeguard one's family from the financial implications of unfortunate circumstances

that one cannot foresee. These plans are pure risk cover plans with or without maturity

benefit. These pure risk plans cover your life at a nominal cost and you may want to take this

plan to cover your outstanding debts like a mortgage, a home loan etc. Various term plans

available are:-

Protector

Term Care

New Risk Care II

(III) TRADITIONAL INSURANCE PLANS

Saving Plans, which offer bonuses, are excellent long term saving instruments with complete

safety. Our products offer additional benefits which include 4 times life cover at little extra

costs, limited premium payment terms and compounded reversionary bonuses making it a

very good long term investment.

Endowment Money Back

Invest Gain Cash Gain

Save Care Economy SP

Life Time Care

Super Saver

Invest Plus

Invest Plus Premier

(IV) CAR & TWO WHEELER INSURANCE

Features Instant online policy issuance and renewal in just 4 easy steps

Cashless claims at over 1500 preferred garages. 75% on account payment when

cashless facility is not available

To locate a Bajaj Allianz Preferred Garage nearest to you call us at: 020-66495000

Transfer your existing No Claim Bonus from any insurance provider ranging from

20% - 50%

0% interest EMI option available on payment through Citibank Credit Card

Instant claims assistance and SMS updates on your motor claim status through our

24x7 call-centers

Towing facility in an event of a breakdown/accident 24x7 service by phone or

online-even on holidays

Bajaj Allianz' preferred workshops give you access to hassle free inspection, high

service standards and cashless settlement of claims in event of an

accident/breakdown

What is covered?

Loss or Damage to your car and two wheeler against Natural Calamities

Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane,

storm, tempest, inundation, cyclone, hailstorm, frost, landslide and rockslide.

Loss or Damage to your car and two wheeler against 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.

Personal Accident Cover

Coverage of Rs. 1 Lakh for the individual owner/driver of the vehicle while driving

or travelling, mounting or dismounting from the two wheeler. Optional personal

accident covers for co-passengers available.

Third Party Legal Liability

Protection against legal liability due to accidental damages resulting in the

permanent injury or death of a person, and damage caused to the surrounding

property.

What is not covered?

Normal wear and tear and general ageing of the vehicle

Depreciation or any consequential loss

Mechanical/ electrical breakdown

Wear and tear of consumables like tyres and tubes unless the vehicle is damaged at

the same time, in which case the liability of the company shall be limited to 50% of

the cost of replacement

Vehicles being used otherwise than in accordance with limitations as to use

Damage to/ by a person driving any vehicles without a valid license

Damage to/ by a person driving the vehicle under the influence of drugs or liquor.

Loss/ damage due to war, mutiny or nuclear risk

LITERATURE REVIEW

A sales strategy is a process that can allow an organization to concentrate its limited

resources on the greatest opportunities to increase sales and achieve a sustainable competitive

advantage.

Sales strategy is most effective when it is an integral component of corporate strategy,

defining how the organization will engage customers, prospects and competitors in the

market arena for success. It is partially derived from broader corporate strategies, corporate

missions, and corporate goals. They should flow from the firm's mission statement. They are

also influenced by a range of micro environmental factors.

A sales strategy also serves as the foundation of a sales plan. A sales plan contains a set of

specific actions required to successfully implement a sales strategy. For example: "Use a low

cost product to attract consumers. Once our organization, via our low cost product, has

established a relationship with consumers, our organization will sell additional, higher-

margin products and services that enhance the consumer's interaction with the low-cost

product or service."

A good sales strategy should integrate an organization's sales goals, policies, and action

sequences (tactics) into a cohesive whole. Many companies cascade a strategy throughout an

organization, by creating strategy tactics that then become strategy goals for the next level or

group. Each group is expected to take that strategy goal and develop a set of tactics to achieve

that goal. This is why it is important to make each strategy goal measurable.

Every sales strategy is unique, but if we abstract from the individualizing details, each can be

reduced into a generic sales strategy. There are a number of ways of categorizing these

generic strategies. A brief description of the most common categorizing schemes is presented

below:

Strategies based on market dominance - In this scheme, firms are classified based on their

market share or dominance of an industry. Typically there are three types of market

dominance strategies:

• Leader

• Challenger

• Follower

Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength.

Strategic scope refers to the market penetration while strategic strength refers to the firm’s

sustainable competitive advantage.

• Cost leadership

• Product differentiation

• Market segmentation

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem.

Research methodology constitutes of research methods, selection criterion of research

methods, used in context of research study and explanation of using of a particular method or

technique so that research results are capable of being evaluated either by researcher himself

or by others. Why a research study has been undertaken, how the research problem has been

formulated, why data have been collected and what particular technique of analyzing data has

been used and a best of similar other question are usually answered when we talk of Research

methodology concerning a research problem or study. The main aim of research is to find out

the truth which is hidden and which has not been discovered as yet.

The area of the study related with informing different people about life insurance policies in

the region of NORTH-EAST DELHI & CENTRAL DELHI.

Thus this report completely deals with the functioning of Dhanlaxmi Bank and hence, will be

beneficial to study the sales techniques required by the bank to sell its products successfully.

RESEARCH TYPE AND SAMPLE SIZE

Research is totally based on primary data. Secondary data can be used only for the reference.

Research has been done by primary data collection & primary data has been collected by

meeting with people. Data collection has been done through by giving structured

questionnaire. This study will be based on sampling. This is an exploratory type of research.

The study was aimed at measuring the customer’s preference for life insurance companies

and the comparison of various insurance policies of various companies on the basis of various

parameters based on customer’s response. The survey was done on hundred general residents

of the selected region.

I have made use of method like questionnaire as the main source of primary data. I have

asked some question about the bank with the help of questionnaires being filled by the local

people of NORTH-EAST DELHI & CENTRAL DELHI.

In this method questionnaire were distributed to the respondents and they were asked to

answer the questions in the questionnaire. The questionnaire were structured non disguised

questionnaire because the question which the questionnaire contained, were arranged in a

specific order besides every question asked were logical for the study, no question can be

termed as irrelevant.

The questionnaire was non-disguised because the questionnaire was constructed so that the

objective is clear to the respondent. The respondents were aware of the objective.

DATA COLLECTION

(a) PRIMARY: Questionnaires filled by local people of various income groups.

(b) SECONDARY: Internet

Size of Data: 100 respondents

Location: DELHI

The following basic tool was used by for analysis:-

Pie Charts

SIGNIFICANCE OF STUDY

The need of the study arises because of the reason that a trainee must

understand the company, its achievements and tasks, products and services

and also to collect information about its competitors, its products and

services offered. So that, after understanding and collecting information

about the organization and its competitors, a trainee will be able to work well

for the organization.

DATA ANALYSIS & FINDINGS

Occupation of respondents:

Occupation Number of respondents

Service 60

Business 20

Professional 18

Others 2

Fig.1: No of respondents according to the occupation

Number of respondents according to the income level:

Income/annum Number of person50000-100000 29100000-300000 40300000-500000 26500000-1000000 5

>1000000 0

Fig.2: Proportion of respondent according to the income level

Different sectors people like to invest their money:

Name of different sector Number of respondent

Fixed deposit 22

Post office deposit 18

Mutual fund 15

Share buying 5

Insurance 40

Fig.3: Different sector people like to invest their money

Preferred sector:

Name of sector Preferred number

Public sector 63

Private sector 37

Fig.4: Preferred sector

Preferred insurance plan:

Name of insurance plan Number of respondent

Life insurance 47

Vehicle insurance 13

Pension plan 20

Medi claim 15

Others 5

Fig.5: Preferred insurance plan

Awareness about Dhanlaxmi Bank:

Response No. of respondance

Yes 29

No 74

Fig.6: Awareness about Dhanlaxmi Bank

Awareness about dhanlaxmi bank’s insurance & mutual fund prodcts:

Response No. of respondance

Yes 17

No 83

Fig.7: Awareness about dhanlaxmi bank’s insurance & mutual fund prodcts

Investment in different insurance company:

Name of the companies Number of respondent

LIC 45

Tata AIG 13

Birla sun life 5

ICICI Prudential 20

Max new york life 7

Others 10

Fig.8: Investment in different insurance company

Customer’s satisfation with their existing policies:

Response no. of respondents

Yes 69

No 31

Fig.9: Customer satisfaction with their existing policies

Insurance as security or investment:

Response No. of respondance

Security 78

Investment 22

Fig.10: Insurance as security or investment

Customers investing in insurance or mutual fund:

Response No. of respondanse

Yes 63

No 37

Fig.11:Customers investing in insurance or mutual fund

CONCLUSION

Insurance yield more than any other investment.

People prefer Insurance than Mutual Fund.

Dhanlaxmi Bank is operating in full force in Southern states of India.

Delhi’s people are less aware about Dhanlaxmi Bank.

Incorrect perception about insurance

Some prospects have already invested and are not interested in further investments

LIC is considered a safer option

Customers ignorant about the importance of insurance hence usually like to keep

money in Fixed Deposits.

RECOMMENDATIONS

Understanding the needs of customers and offering them superior products and services.

Building long lasting relationships with their partners.

Providing an enabling environment to foster growth.

And providing the learning for their employees.

The company should use new techniques of sales promotion

Create a positive perception about insurance.

Try to sell the product/plan which the consumer requires and not the plan where the

advisors benefit is higher.

BIBLIOGRAPHY

www.bajajallianz.com www.irdaindia.org www.dhanbank.comResearch Methodology By C.R. Kothari.

ANNEXURE

Q1) What is your occupation?

Q2) How much is your Income level?

Q3) In which sector you would like to invest your money?

Q4) Which sector you prefered, public or private?

Q5) Which insurance plan you prefer?

Q6) Are you aware about the dhanlaxmi bank?

Q7) Are you aware about the dhanlaxmi bank’s insurance & mutual fund prodcts?

Q8) Do you have a life insurance policy? If yes, then of which

company/companies?

Q9) Are you satisfied with your existing policy/policies?

Q10) Do you see insurance policies as an investment alternative or a

security option?

Q11) Do you like investing in life insurance policy or mutual funds?

Q12) According to you which technique, of getting information about various products, is

easily manageable?

Q10) Should Dhanlaxmi Bank take up new sales promotion program?

Q11) Do you think that private life insurance companies are as safe as LIC for taking a

policy?