Internship Project Report shriram life insurance.pdf PDF

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An Internship report on “Consumer Buying Behaviour towards Life Insurance in Shriram Life Insurance”

Submitted in partial fulfilment of the requirement of the

Master of Business Administration program Offered by Jain (Deemed-to-be University) during the year 2019 – 21 Submitted by

Harshaa Modi

USN NO: 19MBAR0276 SECTION: MHR Under the Guidance of Dr. Nishant Singh Assistant Professor (OB & HRM) No.17, Sheshadri Road, Gandhi Nagar, Bengaluru – 560009, India Tel: +91 80 4684 0400 E-mail: [email protected], Website: www.cms.ac.in

ACKNOWLEDGMENT I take this opportunity to express my gratitude to everyone who supported me throughout the course of the Internship at Shriram Life Insurance. I am thankful for their valuable guidance, constructive criticism and friendly advice during the project work. I am sincerely grateful to them for sharing their truthful and illuminating views on a number of issues related to the study.

I gratefully acknowledge my indebtedness to my mentor Dr. Nishant Singh, Professor, CMS Business School for his meticulous guidance and support throughout the study.

I express my sincere thanks to Mr. Manish Jha Vice President of SLIC Digital Channel, Mr.Vikas Surendran AGM-Digital Business, Mr.Dilip Kumar, Area Manager – AP & T and Ms. Shikha Upadhyay, mentor during the internship for providing me with valuable insights and required facilities for the successful completion of my study. Their support and guidance at Shriram Life Insurance., helped me understand and learn how the digital platform has a long way in the coming years. I express my deep gratitude to my family and dear friends for their co-operation and support.

Name: - Harshaa Modi Reg.No: 19MBAR0276

TABLE OF CONTENT

S.NO

TITLE

1.

Executive Summary

2.

Industry Profile 1. History of Insurance 2. Types of Insurance 3. List of Insurance Companies 4. Market in Life Insurance

3.

Company Profile – Shriram Life Insurance

1. Shriram Group 2. Vision Mission of Shriram Group 3. History of SLIC 4. Vision & Mission of SLIC 5. Foreign Partner of SLIC 6. Benefits of SLIC 7. Documentation of SLIC 8. STP of SLIC 9. SWOT Analysis of SLIC 10.Porters Five Force Model 11.Products by SLIC 4.

Research Methodology 1. Objectives of study 2. Sources of Data

PAGE NO

3. Sampling Technique 4. Sample design 5. Sample Size 5.

Data Analysis and Interpretation

6.

Results and Learning Outcomes 1. Results 2. Conclusion

7.

Bibliography

8.

Annexure -1

EXECUTIVE SUMMARY “Insuring

Dreams”,

this

is

exactly

what

we

at

Shriram

Life

do.

Shriram Life has emerged out of a parent company whose philosophy revolves around the Aam Aadmi (common man), not in papers, but in actuality. With a sole motivation to serve the marginalised section, every single member of the Shriram family strives towards creating a better world, for himself/herself and for those around him/her. For a world, where business means profits and self-centric service, our work-values might sound a bit farfetched. Understandably, the doubt is genuine and undeniable. So here, let us have a glance into

the

background

of

Shriram

Life

and

the

Shriram

Group.

Commencing business in 2006, Shriram life was incorporated in the year of 2005, with constant support from Shriram Group and Sanlam Group, a 90-year-old South African Insurance firm. We work with the primary intention of bringing a positive change in the lives of our fellow beings while adhering to high service standards at the same time. The philosophy of putting the common man first is apparent in the way the Shriram Group functions. Its humble environment with no monumental expenditure on luxury is in sync with its working culture. Acknowledging our efforts, many accolades have been bestowed upon us. Like every other family, the Shriram family also has elders whom we look upon, who guide each and every step of ours, ensuring smooth and effective functioning. The leaders are also known for their simplicity and down-to-earth approach. R.Thyagarajan, the founder of Shriram Group, Padma Bhushan awardee, is the living example of honest and effective business principles. With the same unwavering commitment and equal enthusiasm, Shriram Life is stepping into the online world, making the process of buying insurance even simpler and customer-centric. Under the impactful leadership and visionary approach of Mr. Manoj Jain, Mr. Cassie Kromhout and Mrs. Akhila Srinivasan, the family of Shriram Life is working towards making insurance buying simpler, faster and easier and to help customers in the better management of their funds and in increasing their funds through the beneficial and suitable life insurance plans.

Life of human is a completely essential asset and existence insurance is very essential as it insures the life of human i.e. Offers protection to an individual and his circle of relatives when uncertainty arises. Life Insurance is not only a protection it is also a savings. Shriram Life Insurance plays a very critical position in the person welfare by way of offering coverage to thousands and thousands of people while the human life is at hazard or at uncertainty time. The study at present has been selected with an objective of examining the consumer behaviour and various factors affecting the buying behaviour of Life insurance in Shriram Life Insurance. The data collected for the study is a primary data and the sample size is 50 respondents. Insurance policy should spread awareness about their policy, returns, premium, goodwill etc. and also they should have innovative products where this information was provided by the previous research papers. Insurance is not only for tax saving but also for financial security, risks, uncertainty etc.

CHAPTER -1 OVERVIEW OF INDUSTRY

1. INDUSTRY PROFILE

1.1 WHAT IS INSURANCE Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Insurance is a collective bearing of risk. Insurance spreads the risks and losses of few people among a large number of people as people prefer small fixed liability instead of big uncertain and changing liability. Insurance is a scheme of economic cooperation by which members of the community share the unavoidable risks. Insurance can be 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 Insure or Insurant pays in exchange a fixed sum known as premium. The insurer and the insurant are also known as Assurer or Underwriter and Assurant, respectively. The document which embodies the contract is called the policy.

1.2 ORIGIN OF INSURANCE Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear risk of the caravan trade by giving loans that had to be later repaid with interest when the goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status to the practice that, perhaps, was how insurance made its beginning. Life insurance had its origins in ancient Rome, where citizens formed burial clubs that would meet the funeral expenses of its members as well as help survivors by making some payments. As European civilization progressed, its social institutions and welfare practices also got more and more refined. With the discovery of new lands, sea routes and the consequent growth in trade, medieval guilds took it upon themselves to protect their member traders from loss on account of fire, shipwrecks and the like. Since most of the trade took place by sea, there was also the fear of pirates. So these guilds even offered ransom for members held captive by pirates. Burial expenses and support in times of sickness and poverty were other services offered. Essentially, all these revolved around the concept of insurance or risk coverage.

That's how old these concepts are, really. 10 In 1347, in Genoa, European maritime nations entered into the earliest known insurance contract and decided to accept marine insurance as a practice.

THE FIRST STEP Insurance as we know it today owes its existence to 17th century England. In fact, it began taking shape in 1688 at a rather interesting place called Lloyd's Coffee House in London, where merchants, ship-owners and underwriters met to discuss and transact business. By the end of the 18th century, Lloyd's had brewed enough business to become one of the first modern insurance companies. ENTER COMPANIES The first stock companies to get into the business of insurance were chartered in England in 1720. The year 1735 saw the birth of the first insurance company in the American colonies in Charleston, SC. In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance corporation in America for the benefit of ministers and their dependents. However, it was after 1840 that life insurance really took off in a big way. The trigger: reducing opposition from religious groups. THE GROWING YEARS The 19th century saw huge developments in the field of insurance, with newer products being devised to meet the growing needs of urbanization and industrialization. In 1835, the infamous New York fire drew people's attention to the need to provide for sudden and large losses. Two years later, Massachusetts became the first state to require companies by law to maintain such reserves. The great Chicago fire of 1871 further emphasized how fires can cause huge losses in densely populated modern cities. The practice of reinsurance, wherein the risks are spread among several companies, was devised specifically for such situations. There were more offshoots of the process of industrialization. In 1897, the British government passed the Workmen's Compensation Act, which made it mandatory for a company to insure its employees against industrial accidents. With the advent of the automobile, public liability insurance, which first made its appearance in the 1880s, gained importance and acceptance.

In the 19th century, many societies were founded to insure the life and health of their members, while fraternal orders provided low-cost, members-only insurance. Even today, such fraternal orders continue to provide insurance coverage to members as do most labour organizations. Many employers sponsor group insurance policies for their employees, providing not just life insurance, but sickness and accident benefits and old-age pensions. Employees contribute a certain percentage of the premium for these policies.

IN INDIA Insurance in India can be traced back to the Vedas. For instance, Yogakshema, the name of Life Insurance Corporation of India's corporate headquarters, is derived from the Rig Veda. The term suggests that a form of "community insurance" was prevalent around 1000 BC and practised by the Aryans. Burial societies of the kind found in ancient Rome were formed in the Buddhist period to help families build houses, protect widows and children. Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in 1870. Other companies like Oriental, Bharat and Empire of India were also set up in the 1870- 90s. It was during the Swadeshi movement in the early 20th century that insurance witnessed a big boom in India with several more companies being set up. As these companies grew, the government began to exercise control on them. The Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act of 1938 that looked into investments, expenditure and management of these companies' funds. By the mid- 1950s, there were around 170 insurance companies and 80 provident fund societies in the country's life insurance scene. However, in the absence of regulatory systems, scams and irregularities were almost a way of life at most of these companies. As a result, the government decided nationalise the life assurance business in India. The Life Insurance Corporation of India was set up in 1956 to take over around 250 life companies. For years thereafter, insurance remained a monopoly of the public sector. It was only after seven years of deliberation and debate – after the RN Malhotra Committee report of 1994 became the first serious document calling for the re-opening up of the insurance sector to private players that the sector was finally opened up to private players in 2001. The Insurance Regulatory & Development Authority, an autonomous insurance regulator set up in 2000, has extensive powers to oversee the insurance business and regulate in a manner that will safeguard the interests of the insured.

1.3 TYPES OF INSURANCE

1.4 LIFE INSURANCE Life Insurance is defined as a contract between the policy holder and the insurance company, where the life insurance company pays a specific sum to the insured individual's family upon his death. The life insurance sum is paid in exchange for a specific amount of premium. Life is beautiful, but also uncertain. Whatever you do, however smart and hard you work, and you are never sure what life has in store for you. It is therefore important that you do not leave anything to chance, especially ‘life insurance’. As death is the only certain thing in life, apart from taxes, it pays to insure it well in advance.

1.5 BENEFITS OF LIFE INSURANCE

Life insurance is designed to minimize the impact of the financial loss your family may incur upon your demise. The benefits of such plans are fourfold, aptly contained within the acronym “LIFE”: 1. Liability Free Life insurance gives your family the power to be independent and self-reliant. A good term plan can help them repay financial liabilities like home loan, auto loan, personal loan, or a loan on credit card. The term plan may also cover hospitalization charges and critical illness treatment, giving you a comprehensive protection package 2. Income Replacement If you are the sole breadwinner in your family, a life insurance plan becomes can provide a guaranteed income to your family every month, making sure that their everyday life is not disrupted and they remain financially stable. 3. Education and other expenses for dependents The pay-outs from life insurance can help to pay the bills for the education of your children, as well as expenses for their wedding or medical costs if any. 4. Immediate Expenses after Demise It will also help your family cover a part of essential expenses immediately after your demise, such as funeral costs and/or medical bills.

1.6 TYPES OF LIFE INSURANCE POLCIIES



Term Life Insurance: - Term life insurance lasts for a set number of years before it expires. If you die before the term is up, a set amount of money, known as the death benefit, is paid to your designated beneficiary .Term life is considered the simplest, most accessible insurance policy. When you make your payments (known as your premium), you’re paying for the death benefit that goes to your beneficiaries in the event of your death. The death benefit can be paid out as a lump sum, a monthly payment, or an annuity. Most people elect to receive their death benefit as a lump sum.



Universal Life Insurance: - Universal life insurance has a cash value, just like a whole life insurance policy. Your premiums go toward both the cash value and the death benefit. But there’s a twist: You can change the premium and death benefit amounts without getting a new policy. Basically, although you have a minimum premium to keep the policy in force, you can use the cash value to pay that premium. That means if you have enough money in the cash value, you can use that to skip premium payments entirely, letting the accrued interest do the work.

 Variable Life Insurance: - Variable life insurance is similar to whole life insurance in that they both have a cash value, but the functions of the cash values are quite different. With a whole life insurance policy, the cash value component is a savings account. That’s why, although the growth might be small compared to other investment options, there is a guaranteed minimum rate. It also includes dividend payments from the life insurance company.



Simplified Issue Life Insurance: - Typically when you apply for life insurance, you go through a paramedical exam as part of the underwriting process so the insurer can find out how risky you are to insure. The exam helps them set your premium rate.

With simplified issue life insurance you can skip the medical exam. That’s the "simplified" part of this policy type. This is also known as a "no exam policy.” You’re not out of the woods completely, though. You don’t need to go through the medical exam, but you do need to fill out a health questionnaire, answering questions like if you smoke, have been diagnosed with serious illnesses, and so on.



Guaranteed Issue Life Insurance: - Guaranteed issue life insurance takes the concept of simplified issue life insurance — forgoing the health exam — a step further in that you don’t have to answer any questions about your health, either. As long as you can pay the premium, the insurer will cover you, needing only your age, sex, a nd state of residence.



Endowment Plan: It is a life insurance policies which is payable to the insured if he/she is alive till the policy maturity date. These endowment plans also offer benefits like bonus monthly, which is paid in maturity or else to the nominee under the death benefit. It is also known as traditional insurance and the risk involved is lower.



ULIP: In this, the part of insurance plan will go towards the mutual fund investments and remaining will be going to the death benefit purpose. An individual also can invest in different funds offered by the company depending on his risk management or involved.



Whole Life Insurance: It is not for a specified term; instead it covers the whole life of an individual in this. The sum assured is decided when the policy is being purchased and is paid to the nominee when the insured person will die. In this, withdrawal can also be done after the premium payment period.



Child’s Policy: It provides financial protection to the children throughout their lives by Investment + insurance policies. It helps to secure the child’s future for their education and marriages. During the policy term, if the insured child’s parent dies then the payment is done immediately by the insurance company.



Money-Back: After the payment of policy, it provides certain percentage on sum assured which is also known as survival benefit. They are also eligible to receive.



Retirement Plan: It is also called as a Pension plans. It is a policy where it combines both investment and insurance. A little portion of amount is used for the retirement purpose of the policyholder and the remaining lump-sum amount or monthly payment will be given to the policyholder when he retires.

1.7 LIST OF LIFE INSURANCE COMPANIES

S. No.

1

Life Insurance Companies in India

Claim Settlement Ratio

Aditya Birla Sun Life Insurance

97.15%

Company

2

AEGON Life Insurance Company

96.45%

3

Aviva Life Insurance Company

96.06%

Bajaj Allianz Life Insurance

95.01%

4

5

6

7

8

Company

Bhart...