Declaration

We, the student of K.S. School of Business Management, hereby declare that the Report for Summer Project
entitled “Consumer behavior towards the life insurance products”is a result of our own work and our
indebtedness to other work publications, references, if any, have been duly acknowledged.

Place: Ahmedabad (Signature)

(Name of Student)
5215 Pandya Yash
5002 Ahir Jignesh

1
 Acknowledgement

We deeply express our profound gratitude and whole hearted thanks to our beloved K.S. School of Business
Management, Ahmedabad, who provided necessary facilities, guidance and endless encouragement, which
helped us soundly. Our college is a boon to all of us not only in completing our projects but also throughout the
course of study under the humanitarian grounds.

We have taken efforts in this project. However, it would not have been possible without the kind support and
help of Staff Members of Birla Sun Life Insurance Company Limited (BSLI). We would like to extend our
sincere thanks to all of them.

We are highly indebted toMr. JitendraBapna (Business Mentor)and MS. Vaishali Baijal (Business
Development Manager) for their guidance and constant supervision as well as for providing necessary
information regarding the project & also for their support in completing the project.
We would like to express our special gratitude and thanks to the Committee Members andBIRLA SUN LIFE
INSURANCE COMPANY LIMITED for giving us an opportunity to work with them and its workforce for
giving us such attention, time, support and guidance.
We wish and predict all great success in its endeavors to “Birla Sun Life Insurance Company Limited”.

Project Guide:-
Ms. Vaishali Baijal

2
 Preface

MBA is a stepping stone of management career, in order to achieve practical, positive and concrete result, the
classroom learning needs to be efficiently fitted to the realities and situation outside the classroom which is in
the market this particular what we learn in the management.
Every study is incomplete without having a well-planned and concrete exposure given to a student.
Management studies are not exceptions. The study of management which only has theoretical knowledge is just
like a wondering ship in ocean without a compass. So at this side it provides us sound basis to adopt the
theoretical knowledge and on the other hand it gives opportunity for exposures to real market situation. It gives
us the basis of practical experience, which serves us as a compass in the directionless ship, this enable the ship
to reach its destination against all odds from all of its rivals.

“An array of business solution stand testimony to the fact that good business value pillared by expertise,
can work wonders”

This project report refers to ‘Consumer Behavior towards Life Insurance Products’ and the project is
executed in Birla Sun Life Insurance Company Limited. It provides with a detailed insight into various
functions of insurance and how they works. This project is a compilation of information collected from various
Primary and secondary sources.

3
 Table of content

Sr. no. Particulars Page no.

1. Company of the industry 7
Overview of the industry 7
Company/product history 9
Definition/propose of the project 9
Organization structure 11
Performance of the company 13
13
14
15
15
16
2. Introduction to Birla sun life insurance 18
History of BSLI 18
Departments of BSLI 20
Distribution channels 26
Product segment of BSLI 27
Term plan 28
Traditional plan 28
Unit linked insurance plan 29
Riders offered by BSLI 30
Fund management of BSLI 31
3. Research Methodology 55
4. Data Analysis and Interpretation 57
Primary research on consumer behavior towards life insurance 57
products
5. Conclusion 75
6. Bibliography 76
7. Annexure 77

4
 Executive summery

As a part of our study curriculum it is necessary to do summer internship project. It provides us an opportunity
to have corporate exposure and also provide basic corporate market structure which leads to knowledge
advancement regarding market before going actual market. Our topic for summer internship is “consumer
behavior towards life insurance products”.
Our project begins with overview of insurance industry. Under this we have studied the history of insurance
industry, Importance of insurance in India, role of Insurance Regulatory Development Authority (IRDA), which
is apex body that regulates insurance industry and types of insurance.

The next part of our project includes the introduction to Birla Sun Life Insurance Company Limited. Birla Sun
Life Insurance Company Limited (BSLI) is a joint venture between the Aditya Birla Group, a well-known and
trusted name globally amongst Indian conglomerates and Sun Life Financial Inc, leading international financial
services organization from Canada. Under this part we have included department of BSLI, distribution
channels, products segment of BSLI, riders offered by BSLI and fund management of BSLI.

Research has been conducted to know the consumer behavior towards life insurance products, which includes
term plan, traditional plan and ULIPs. We took sample of 50 and we come into the contact of respondents of
Ahmedabad city by using the non- probability convenience sampling method. Primary data collected by survey
by use of structured questionnaire and secondary data collected from reference book, magazine and internet.
We have used statistical tests, Chi-square test and Friedman test. Chi-square test is used to study whether the
age of the respondents are related to their choice of particular fund of ULIPs. Friedman test is applied to know
whether the distributions of population of 6 factors that affect the investment decision of the respondents are
identical or not.

5
PART 1

6
 1. Overview of the industry
The Indian insurance sector has 52 insurance companies, of which 28 are in non-life insurance business and 24
in life insurance. India's life insurance sector is the biggest in the world with about 36crore policies and is
expected to increase at a compound annual growth rate (CAGR) of 12-15 per cent over the next five years.

The insurance industry plans to hike penetration levels to five per cent by 2020, and could top the US$ 1 trillion
mark in the next seven years. This bright outlook for the sector is primarily due to the Government of India's
efforts to strengthen the industry.
For instance, the Union Cabinet in July 2014 approved a proposal to relax foreign direct investment (FDI) limit
in the domestic insurance sector to 49 per cent from the previous 26 per cent, signaling the Centre's intent to
bring capital and investment into the sector.

History of insurance industry in India

The insurance business started with ocean shipping. The investment in a ship and cargo was considerable and if
the ship was lost, which there was a good possibility of, the ship owner could be wiped out. The idea of
insurance was developed among the ship owners to mitigate the risk of losing the ship and cargo. The ship
owner would pay other ship owners a fee, actually a healthy fee that the other owners would use to guarantee
that the ship owner would be compensated if his ship did not return. It was a great idea and caused an expansion
of ocean shipping that would not have been possible otherwise.

Pre-independence era
Modern insurance in India began in early 1800. It began with agencies of foreign companies starting marine
insurance business. The first life insurance company in India “The Oriental life insurance company ltd.” was an
English company started in 1818. This company however, failed in 1834. 1870 saw the enactment of the British
Insurance Act.
The first Indian insurance company “Bombay Mutual Assurance Society Ltd” was formed in 1870 in Mumbai.
This era however was dominated by foreign insurance offices which did good business in India, namely Albert
Life Assurance, Royal Insurance, Liverpool and London globe Insurance and Indian offices were up for hard
competition from the foreign companies.
The oldest insurance company in India “National Insurance Company Ltd.” was founded in 1906 and still in
business.

7
Life Insurance Companies Act, 1912 was the first statutory measure passed to regulate insurance business in
India. In 1938 the earlier legislation was consolidated and amended by insurance Act.
General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850
in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd was set up. This was the first company
to transact all classes of general insurance business.

Post-independence era
The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of
insurance companies and the level of competition was high. There were also allegations of unfair trade
practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was
issued on19thJanuary, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into
existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident
societies—245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance
sector was reopened to the private sector. The history of general insurance dates back to the Industrial
Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17thcentury. It came
to India as a legacy of British occupation.

Talking about the general insurance, 1957 saw the formation of the General Insurance Council, a wing of the
Insurance Association of India. The General Insurance Council framed a code of conduct for ensuring fair
conduct and sound business practices. In 1968, the Insurance Act was amended to regulate investments and set
minimum solvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of
the General Insurance Business (Nationalization) Act, general insurance business was nationalized with effect
from1stJanuary, 1973.
107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd.,
the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance
Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it
commence business on January 1sst 1973.This millennium has seen insurance come a full circle in a journey
extending to nearly 200 years.
The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it
been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN
Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector. The
objective was to complement the reforms initiated in the financial sector. The committee submitted its report in
1994 wherein, among other things, it recommended that the private sector be permitted to enter the insurance

8
industry. They stated that foreign companies are allowed to enter by floating Indian companies, preferably a
joint venture with Indian partners. Following the recommendations of the Malhotra Committee report, in 1999,
the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to
regulate and develop the insurance industry.

The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include
promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower
premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in
August 2000 with the invitation for application for registrations.
Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations
under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging
from registration of companies for carrying on insurance business to protection of policyholders’ interests. In
December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as
independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a
bill de-linking the four subsidiaries from GIC in July, 2002.
Today there are 28 general insurance companies including the ECGC and Agriculture Insurance Corporation of
India and 24 life insurance companies operating in the country.
The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together with banking
services, insurance services add about 7% to the country’s GDP. A well-developed and evolved insurance
sector is a boon for economic development as it provides long- term funds for infrastructure development at the
same time strengthening the risk taking ability of the country.

Importance of insurance in India

The business of Insurance essentially means defraying risks attached to any activity over time (including life)
and sharing the risks between various entities, both persons and organizations. Insurance companies are
important players in financial markets as they collect and invest large amounts of premium. Insurance products
are multipurpose and offer the following benefits:
1. Protection to the investors
2. Accumulate savings
3. Channelize savings into sectors needing huge long term investments.

9
 Contribution to Indian economy
Insurance is the only sector which garners long term savings
Insurers are increasingly introducing innovative products to meet the specific needs of the prospective
policyholders. An evolving insurance sector is of vital importance for economic growth.
Insurance companies receive, without much default, a steady cash stream of premium or contribution to pension
plans.
Liabilities of Insurance companies being long-term or contingent in nature, liquidity is excellent and their
investments are also long-term in nature. Since they offer more than the return on savings in the shape of life-
cover to the investors, the rate of return guaranteed in their insurance policies is relatively low. Consequently,
the need to seek high rates of returns on their investments is also low. The risk-return tradeoff is heavily tilted in
favor of risk.

As a combined result of all this, investments of insurance companies have been largely in bonds floated by GOI
(Government Of India), PSUs ( Public Sector Units), state governments, local bodies, corporate bodies and
mortgages of long term nature.

It generates Long term funds for infrastructure and strong positive correlation between development of
capital markets and insurance/pension sector

For GDP to grow at 8 to 10%, qualitative improvement in infrastructure is essential. Estimates of funds required
for development of infrastructure vary widely. An investment of 6, 19,600crore is anticipated in the next 5
years. Tenure of funding required for infrastructure normally ranges from 10 to 20 years.
The insurance industry also provides crucial financial intermediary services, transferring funds from the insured
to capital investment, critical for continued economic expansion and growth, simultaneously generating long-
term funds for infrastructure development. In fact infrastructure investments are ideal for asset-liability
matching for life insurance companies given their long term liability profile. According to preliminary estimates
published by the Reserve Bank of India, contribution of insurance funds to GDP is around 7%. Development of
the insurance sector is thus necessary to support continued economic transformation.
The insurance sector in India, which was opened up to private participation in the year 2000, has completed
over fifteen years in a liberalized environment. With an average annual growth of 37 per cent in the first year
premium in the life segment and 15.72 per cent growth in the nonlife segment, together with the largest number
of life insurance policies in force, the potential of the Indian insurance industry is still large.

10
Spread of financial services in rural areas and amongst socially less privileged
IRDA Regulations provide certain minimum business to be done
- in rural areas
- in the socially weaker sections
Life Insurance offices are spread over nearly 1400 centers presence of representative in every tehsil – deeper
penetration in rural areas.
Employment generation
Life insurance industry provides increased employment opportunities. Many agents depend on insurance for
their livelihood. Brokers, corporate agents, training establishments provide extra employment opportunities.
Many of these openings are in rural sectors.
Role of the Insurance Regulatory and Development Authority (IRDA)
Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous apex statutory body
which regulates and develops the insurance industry in India. It was constituted by a Parliament of India act
called Insurance Regulatory and Development Authority Act, 1999 and duly passed by the Government of
India.
The agency operates from its headquarters at Hyderabad, Telangana where it shifted from Delhi in 2001. IRDA
batted for a hike in the foreign direct investment (FDI) limit to 49 per cent in the insurance sector from the
erstwhile 26 per cent. The FDI limit in insurance sector was raised to 49% in July 2014.
The IRDA Act, 1999 was passed as per the major recommendation of the Malhotra Committee report (7
January, 1994) which recommended establishment of an independent regulatory authority for insurance sector
in India. Later, It was incorporated as a statutory body in April, 2000. The IRDA Act, 1999 also allows private
players to enter the insurance sector in India besides a maximum foreign equity of 26 per cent in a private
insurance company having operations in India. The Insurance Bill proposes to raise the FDI limit in insurance
sector to 49%. The bill was proposed by UPA government in July 2013, since then it was pending in the
RajyaSabha. On 12th march 2015, it was passed in the RajyaSabha also, thus giving the Parliament's approval
to the hike in capital of FDI from 26% to 49%. This will enable the foreign companies to buy up to 49% stake
in domestic insurance companies. The bill serves as an Authority to protect the interests of holders of insurance
policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected
therewith. IRDAI role is to protect rights of policy holders & they provide registration certification to life
insurance companies & responsible for renewal, modification, cancellation & suspension of this registered
certificate.

11
Organization Structure

Chairman

Chief Executive
Officer

Chief Distribution
Officer

Head Officer

General Manager

Regional Manager

Branch Head

Branch Manager

Sales Manager

Advisor

12
 Brokers or Broking Channel– Brokers are companies who can sell insurance products from multiple issuers.
In case of India, these entities are issued a formal broking license by IRDA to source and underwrite the
individual policies. Brokers are hence able to offer their end consumers a wider choice and a better overall
relationship. Most brokers have business interests that go beyond Life Insurance and include products like
Mutual Funds, Equity investments etc. Hence they become a one-stop shop for their big customer base.

 Corporate Agents Channel – Corporate agents are similar to individual agents except that these are companies
and their representatives selling insurance products instead of individual agents. As per IRDA mandate,
Corporate Agent license is issued to those organizations whose core business is NOT insurance sales. Again in
the Indian scenario the corporate agent can only sell products from one issuer.
 Bank assurance Channel – Banks have a huge customer base and given the context, they usually are in a good
position to recommend appropriate financial products to their clients. Life Insurance companies have also
leveraged banks through what is called the Banc assurance channel. Here a bank chooses to associate itself with
a Life Insurance player and trains its bankers, wealth managers etc to pitch the relevant products, thereby
earning a good fee income.

 Direct Channels – With growing awareness of Life Insurance, very many customers prefer to transact either
online or through phone/email channels. Though such customers have been far and few, there is a clear rise in
contribution of Direct Channels for simple products like Term Plans. Many have infect launched
dedicated Online Term Plans and in some cases Online ULIPs/ Traditional plans too.

PART 2

13
 Types of Insurance

Insurance

General Life Health

Insurance insurance Insurance

Fire Marine Motor Home Loan Traditional

Insurance Term Plan ULIPS
Insurance Insurance Insurance Plan

General Insurance:
General Insurance is basically an insurance policy that protects client against losses and damages other than those
covered by life insurance.

Besides life insurance there are different types of non-life insurance policies. Every asset has a value of its own and
the main aim of general insurance is to protect the economic value of assets. Nothing can be guaranteed on this
unpredictable planet. Our assets can be damaged or be victims of accidents and calamities at any time. So, we must
prepare ourselves to prevent the losses by insuring our assets with different insurance plans and policies.

 Marine Insurance: Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or
cargo by which property is transferred, acquired, or held between the points of origin and final destination.

 Motor Insurance: According to Motor Vehicles Act, every motor vehicle running on the road has to be
insured, if not with at least a liability policy. Generally, there are two types of motor insurance policy; one
covers the act of liability while the other covers all liability and damages caused to the vehicles.

14
 Fire Insurance: Insurance that is used to cover damage to a property caused by fire. Fire insurance is a
specialized form of insurance beyond property insurance, and is designed to cover the cost of replacement,
reconstruction or repair beyond what is covered by the property insurance policy. Policies cover damage to the
building itself, and May also cover damage to nearby structures, personal property and expenses associated with
not being able to live in or use the property if it is damaged.
 Home loan insurance: Home loan Insurance (also known as mortgage insurance) is an insurance policy
which compensates lenders or investors for losses due to the default of a mortgage loan. Mortgage insurance
can be either public or private depending upon the insurer. The policy is also known as a Mortgage Indemnity
Guarantee (MIG), particularly in the UK.

Life Insurance:
Life insurance has made its way in India over 100 years ago. It has been defined as a term of insurance where
the insured pay a certain amount, called premiums at specified time and in return the insurance companies
agrees to compensate or pay back a certain sum of money to the insured on specific terms and conditions related
to the duration of human life. Life insurance guarantees full protection against the risk of death of the insured.
On the death of the insured person, life insurance pays the full sum assured with bonuses as applicable while in
other saving schemes only the saved amount with interest is payable. In a sense, life insurance is superior to
other forms of savings.
How life insurance works
There are three parties in a life insurance transaction; the insurer, the insured, and the owner of the policy
(policyholder), although the owner and the insured are often the same person. For example, if John Smith buys
a policy on his own life, he is both the owner and the insured. But if Mary Smith, his wife, buys a policy on
John's life, she is the owner and he is the insured. The owner of the policy is called the grantee (he or she will
be the person who will pay for the policy). Another important person involved is the beneficiary.
The beneficiary is the person or persons who will receive the policy proceeds upon the death of the insured.
The beneficiary is not a party to the policy, but is designated by the owner, who may change
the beneficiary unless the policy has an irrevocable beneficiary designation.
Health Insurance
Health Insurance in India
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating
the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a
routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for
15
the health care benefits specified in the insurance agreement. The benefit is administered by a central
organization such as a government agency, private business, or not-for-profit entity.
Every life insurance company makes the investment in equity and debt market of the amount of premium it
receives through the Unit Linked Insurance Plan (ULIPs). So, the fund manager of every life insurance
company studies the equity and debt market in order to decide where and how much to invest. So, here the brief
overview of stock and debt market is presented.

16
 2. Introduction to Aditya Birla Sun Life Insurance Co. LTD

History of Birla Sun Life Insurance:

Established in 2000, Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya
Birla Group, a well-known and trusted name globally amongst Indian conglomerates and Sun Life Financial
Inc., leading international financial services organization from Canada. The local knowledge of the Aditya Birla
Group combined with the domain expertise of Sun Life Financial Inc., offers a formidable protection for its
customers' future.

With an experience of over 10 years, BSLI has contributed significantly to the growth and development of the
life insurance industry in India and currently ranks amongst the top 7 private life insurance companies in the
country.

Known for its innovation and creating industry benchmarks, BSLI has several firsts to its credit.It was the
first Indian Insurance Company to introduce "Free Look Period" and the same was made mandatory by IRDA
for all other life insurance companies.Additionally, BSLI pioneered the launch of Unit Linked Life Insurance
plans amongst the private players in India.
To establish credibility and further transparency, BSLI also enjoys the prestige to be the originator of practice to
disclose portfolio on monthly basis.

These category development initiatives have helped BSLI be closer to its policy holder’s expectations, which
gets further accentuated by the complete bouquet of insurance products (viz. pure term plan, life stage products,
health plan and retirement plan) that the company offers.

About Birla Sun Life Insurance

With an experience of over a decade, BSLI has contributed to the growth and development of the Indian life
insurance industry and is currently one of the leading life insurance companies in the country. BSLI has a
17
customer base of over two million policy holders. The Company offers a complete range of offerings
comprising protection solutions, children's future solutions, wealth with protection solutions, health and
wellness solutions, retirement solutions and savings with protection solutions. It has an extensive distribution
reach in over 500 cities through its network of over 638 branches, around 85,000 empanelled advisors and over
140 partnerships with corporate agents, brokers and banks. Birla Sun Life Insurance has total assets under
management
About Aditya Birla Financial Services Group (ABFSG)
Of Rs.26, 813Crores and a robust capital base of over Rs.2, 170Crores, as on 30th Jun, 2014.
Aditya Birla Financial Services Group (ABFSG) ranks among the top 5 fund managers in India (excluding LIC)
with an AUM of USD 20.4 billion. Having a strong presence across the life insurance, asset management,
NBFC, private equity, retail broking, distribution & wealth management, and general insurance broking
businesses, ABFSG is committed to serve the end-to-end financial services needs of its retail and corporate
customers. The seven companies representing ABFSG are: Birla Sun Life Insurance Company Ltd., Birla Sun
Life Asset Management Company Ltd., Aditya Birla Finance Ltd., Aditya Birla Capital Advisors Pvt. Ltd.,
Aditya Birla Money Ltd., Aditya Birla Money Mart Ltd. and Aditya Birla Insurance Brokers Ltd. In FY 2013-
14, ABFSG reported consolidated revenue from these businesses at Rs. 6,640 Crores (USD 1.1 billion) and
earnings before tax at Rs. 745Crore. Anchored by about 13,000 employees and trusted by over 5.3 million
customers, ABFSG has a nationwide reach through 1,500 points of presence and about 130,000 agents / channel
partners.
About Sun Life Financial
Sun Life Financial is a leading international financial services organization providing a diverse range of
protection and wealth products and services to individuals and corporate customers. Sun Life Financial and its
partners have operations in key markets worldwide, including Canada, the United States, the United Kingdom,
Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia
and Bermuda. As of June 30, 2018, the Sun Life Financial group of companies had total assets under
management of $684 billion.

18
 Departments of BSLI

MD & CEO

Sales- HR & Risk &

Acturial Marketing Deputy CEO
DSF/TPD training Legal

Information Rewards &

Investment Finance Operation
Technology recognition

1. Actuarial :
Actuarial team mainly works to design and price a product to create a product portfolio for the company as per
the needs and competitive positioning. They also ensure that the IRDA guidelines are adhered for each design.
2. Marketing:
Marketing is the voice of the company. They design and adopt marketing interventions to ensure maximum
brand recall/ association. They use all types of media i.e. TV, radio, Net, Social sites to increase the reach and
awareness of brand.
3. Deputy CEO:
MayankBathwal is the Chief Financial Officer for BSLI. In his current role he provides effective leadership to
the Information Technology, Investment, Finance, Operation and Rewards and recognition function towards
growing the business of the company and partners the CEO and the leadership team in managing the affairs of
the company.

Information Technology:

19
 The information technology department develops and implements IT related systems to improve the overall
efficiency of organization.

 Investment:
Their main task is to implement investment strategies for all BSLI funds. All investmentdecisions are
taken post adhering to IRDA norms and in best interest of the policyholder.

 Finance:
The financial complexity and sophistication of the insurance industry make it an exciting place for
accountants and financial professionals to work. Insurance companies, by virtue of having thousands of
small transactions, are numbers-oriented companies. Through its key departments of accounts, Planning,
Taxation & Finance, this function ensures the sustainability and profitability of the company.
 Operations:
This function is the backbone of the company. This includes processing of policies through new business,
underwriting and providing customer service.
Under operations, two things are included here:
 Procurement process of BSLI
 Processing of new business application form

Procurement process of BSLI

20
 Search for vendor (minimum 3 vendor)

Comparision of quotations sent by vendor's

Statement of comparision of quotations is sent to Head office/ approver

Selection of best quotation of vendor

For the new vendor, vendor code is created

Help desk (Ticket raise)

Purchase order is released to selected vendor by branch

Vendor accepts the order

After work completion branch will issue the work completion certificate

Head office will conduct the audit of the work done by vendor

Head office approve the work completion certificate and make payment to the vendor

Processing of new business application form

21
 Customer application form submitted by advisor or sales managemer to the branch
office

Log in is done by the operation department

Operation department scrutinize the application

Receipt Writer System ( RWS)

Entry receipt genetrating

Form scanning

Scanned form is uploaded in ENHIRA system

Coding or data cpturing is done in INGENIUM system and policy number is

generated

Finally policy is issued

After the entry receipt is generated, along with the above process another process i.e. processing of paying slip
is simultaneously working. In this process, after entry receipting, amount of premium which has been paid by
the client is deposited in CITI bank by branch. Then deposited amount is transferred to BSLI account and then
IT team of BSLI upload this amount in INGENIUM system and only after that the policy is issued to the client.
There are mainly four systems are installed in Birla Sun Life Insurance
A. Receipt Writer System
B. ENHIRA System
C. INGENIUM System
D. TALISMA System

A. Receipt Writer System:

When advisor or sales manager bring any new business to the branch, then with the help of this system a header
entry in made. Under the header entry following details is entered in the system:
 Detail of customer like his or her name, age, occupation, gender etc.
 Details of life insurance policy purchased by the client
22
 Bank details of customer
 Details about the documents submitted by the client
Receipt Writer System is also useful in generating the various reports like
 Report on number of application forms are processed
 Report on recruitments etc.
B. ENHIRA system:
This is a head office based system. With the help of this system application form is scanned and is sent to the
Head office.
There are sub parts of this system
a. HP Scan jet 5000
b. Paper port
c. Life flow
HP Scan jet 5000 scans the application form and paper port helps it in the process of scanning. 200 DPI (Dot
per Inch) is the standard size for scanning and scanning is only done in black and white color.
After scanning, life flow is used to upload the application form in ENHIRA system.
C. INGENIUM System:
INGENIUM System is mainly used for coding of details that ENHIRA system reflexes.
This system is also used for checking the policy status, fund value. This system is also useful in policy servicing
activities like Surrender, withdrawal, address change, change in nominee etc.
D. TALISMA System:
With the help of this system request is made for policy servicing activities and an interaction ID is created.
TALISMA and INGENIUM both systems are used for policy servicing activities, but the main difference is that
the TALISMA is used for making request for policy servicing activities and the actual processing is done with
the help of INGENIUM system.
E. Rewards and recognition:
This function creates motivation wave among the Sales Force. The rewards and recognition are designed to
achieve monetary benefits and reward good performance.

4) Direct Sales Force:

Direct Sales Force- DSF solicits business through Front Line sales. BSLI have a rich network of 540 branches
Pan India which help them serve their customers and distributors.
Advisor recruitment process

23
 The Sales Managers are responsible for recruiting the Advisors in the company. These advisors are the
commission agents who target the potential market for selling the Life Insurance Policies of Birla Sun Life
Insurance.

Sales manager mostly target the people who seemed to have a lot of contacts like restaurant owners, shop
owners, chartered accountants, business men and high profile marketing executive related to some other sector.
The reason for such approach is that these are the people who normally have a lot of contacts in the market.
They meet a large number of new people on daily bases. So, these are the people who are potentially capable of
generating policies regularly.
Sales managers explain them the benefits of becoming the advisors, as a source of regular and free income
without investing hours at work. The Potential Advisors were explained the quantity to income: They were
authorized to receive a guaranteed income of 10% to 35% of the first premium of any new policy that they
would be able to convert. A part from this they would also continue to receive at least 5% to 10% of the annual
premium of a policy that they generate, till the number of years the policyholder keep the policy active.
The other following benefits are also explained:
 Get to be your own boss
 Unlimited earning opportunity
 Secure your friends’ and family’s lives and join a noble profession
 Start with negligible/ low start up investment
 Have flexible working hours
These were the benefits that will attract any person who knows a large number of tax-payers, or knows people
who are financially capable of taking policy for themselves or for their family members.

Potential advisors are also explained the opportunities available in the market like as of know the penetration
level in the market is only 50%, so there are lots of opportunities available in the market for insurance selling.

Advisors are also explained the benefits of joining with BSLI compared to other life insurance companies like;
It is ranked as the 3rd most trusted life insurance company in India by Economic times in 2013.
It has provided 100% claims in 2012.
It is rated as the second best employers in India.
It is first to introduce the ULIPs.

24
 While recruiting advisors for BSLI sales managers have to look for the prospect that has to fulfill the below
mentioned criteria: - Age above 18 years. He/ She must be minimum H.S.C pass (as per specified by the
company). If the person satisfied the above mentioned points; he is eligible for the post of the advisor.

After convincing the advisor, application form is to be filled up by advisor and various documents are to be
submitted like PAN card, bank details, 2 Photos, 12th mark sheet and address proof. And after that a URN
(Unique Registration Number) is generated for advisor. After that, online 25 hours IC33 training is provided to
advisors and a training completion certificate is issued to them. Advisors appear for the exams conducted by
IRDA (Insurance Regulatory Development Authority) and after passing the exam; they can legally start selling
the insurance policies.

Company also conducts the NAIP (New Advisor Induction Program) for advisors. Under this program advisors
are given information about the various products offered by the company and sales manager goes with the
advisor in the open market and explains how to convince the clients to buy the policy.

5)HR & training:

HR to be a catalyst in partnering with business through continued effort to evolve a service oriented culture by
providing transparency in people practices and empowering workforce to achieve executional excellence. It also
ensures growth of employees through training and various development interventions.

6) Risk &Legal:
The work of risk and legal is to meet auditory requirement, legal requirements and regulatory requirements for
functioning in an ethical manner within life insurance domain

Distribution Channels in Life Insurance Companies

The key distribution channels that most Life Insurance companies have used are the following:
 Agency (agents) Channel – Agents have been the biggest driving force for the Life Insurance Industry. In most
markets, agents are certified individuals who represent a specific issuer, in some they are allowed to pitch
products from multiple companies. Since an agent usually prospects people within his/her own network, it
allows an issuer to drastically increase its distribution reach. Add to this that the agent is paid a commission
only upon a successful sale, and you would understand why this is usually a big channel. Since an agent talks to

25
his set of clients and prospects regularly, it’s easier for him to build a relationship and convert the sale over a
series of such interactions.

Product segment of BSLI

life Insurance

Traditional
Term Plan Plan ULIPs

Endowment Whole life Money Back

Pension Plan
Plan Plan Plan

Term Plan:
Term insurance policy covers only the risk of dying. Insurer pays the premium year on year to the insurance
company and protection is provided for the selected term. If the insured person dies during the term, the
insurance amount, called the Sum Assured, is paid out to the nominee. If insured person survive till the end of
the selected term, the policy normally expires without paying anything to the insured person. Since everything
that insured person pays goes towards covering the risk on your life, term insurance is the cheapest. There are
no investments clubbed with a pure term insurance plan.

26
Traditional Plan
These are plans that provide insurance and along with it return on investments.

A. Endowment Plans
Take a term plan and add an offer of some returns on the premiums insured person pays – that is an endowment
policy. If insured person survives at the end of the policy term, he/she gets the sum assured plus the returns and
if the insured person dies during the policy tenure, the nominee will get the sum assured plus some returns.
Under this policy premiums are high compared to the term plan. It is from these yearly premiums that the
insurance company covers the protection, invests to give some returns and deducts administrative expenses.
That makes the overall yield of an endowment plan somewhere between 4-7%.

B. Money-back plans
Money-back plans are variants of endowment plans with one difference – the payout can be staggered through
the policy term. Some part of the sum assured is returned to the policy holder at periodic intervals through the
policy tenure. In case of death, the full sum assured is paid out irrespective of the payouts already made. Bonus
is also calculated on the full sum assured and not the balance money left. Because of these two reasons,
premiums on money-back plans are higher than endowment plans.

C. Whole-life plans
Term plans, endowment plans and money back plans offer insurance cover till a specified age, generally 70
years. Whole-life plans provide cover throughout the whole life of insured person. Usually, the policyholder is
given an option to pay premiums till a certain age or a specified period (called maturity age). On reaching the
maturity age, the policyholder has the option to continue the cover till death without paying any premium or
enchasing the sum assured and bonuses.

D. Pension Plans
Pension plans are investment options that let the person set up an income stream in his/her post retirement years
by giving away the savings to an insurance company who invests it on behalf of policy holder for a fee. The
returns depend on a host of factors like how much contribution is made and the starting time and the number of
years of investment.

27
If the payment to policy holder (called annuity) starts immediately after buying a pension plan it is called an
immediate annuity contract. However, if the payout starts after some years of deferment, it is called a deferred
annuity.

Unit-linked insurance plans (ULIP)

To keep your money safe, most of these products will invest in debt. Unit-linked insurance plans give you
greater control on where your premium can be invested. Think of them like mutual funds. The annual premium
you pay can be invested in various types of funds that invest in debt and equity in a proportion that suits all
types of investors. You can switch from one fund plan to another freely and you can also monitor the
performance of your plan easily.

There are various charges to be aware of in a ULIP and is suitable for those who understand the stock market
well. Of late, ULIPs qualified as the most abused insurance plan.

Charges of ULIPs
The following charges are deducted from your policy towards the cost of benefits and administration services
provided by BSLI:

1) Administration charges: A fee is charged for administration of your policy every month. Administration
charges are deducted by cancelling units proportionately from each of the funds you have chosen.
2) Fund management charges: These charges are towards meeting expenses related to managing the fund.
This is charged as a percentage of the fund's value and is deducted before arriving at the net asset value of the
fund.

3) Mortality Charges: Depending upon the age, and the amount of cover, these charges are levied towards
providing a death cover to the insured.

4) Premium Allocation Charge: This charge is deducted as a fixed percentage of the premium received, and is
usually charged at a higher rate in the initial years of a policy. This charge varies depending upon whether the
policy is a single premium or regular premium policy, the size of the premium, premium frequency and
payment mode.

28
Riders offered by BSLI
Riders

Rider Name Kind Of Risk Major Benefit

Birla Sun Life Hospitalization for medically You can choose your benefit amount from Rs. 3,000
Surgical Care necessary surgery for a minimum to Rs. 30,000. The rider sum assured will be 50 times
Rider period of 24 hours. this benefit amount. In case of Major Surgery: for a
surgery you will be paid five times the chosen benefit
amount. Other Surgery: for any other valid surgical
hospitalization, the benefit will be equal to the chosen
benefit amount.

BSLI Hospital Daily cash benefit: In case of Hospital Cash benefit: Minimum daily cash benefit
Care Rider hospitalization for medically amount - Rs. 600/day. Maximum daily cash benefit
necessary treatment of any illness amount - Rs. 6,000/day. An additional 100% of the
or injury for a minimum period of 24 chosen daily cash benefit amount per day is paid for
hours will be paid from the first day each day of stay in the intensive care unit (ICU). A
for the duration of hospitalization. lump sum recuperating benefit is equivalent to 3
times the chosen daily cash benefit will be payable for
7 or more days of continuous hospitalization.

BSLI Waiver Future premiums will be waived if In case proposer becomes completely disabled due to
of Premium you are unable to pay your premium an illness or accident or proposer is diagnosed with
Rider in the event of financial difficulties. any of the specified critical illnesses or death of the
proposer (if not the life insured), then all the future
premiums of the base plan and the attached riders
will be waived throughout the rest of the policy term
or until the termination of the policy or till the
attained age 70 of the proposer whichever is earlier.

BSLI 1) Accidental Death Accidental Death: Rider sum assured paid.

Accidental 2) Accidental Disability Accidental Disability: % of rider sum assured paid that
Death and depends on nature
Disability of disability.
Rider

29
 BSLI Critical BSLI Critical Illness rider covers 4 100% of the rider sum assured on survival of 30 days
Illness Rider major illnesses - following the date of confirmed diagnosis.

First Heart Attack of Specified

Severity
Cancer of Specified Severity
Stroke Resulting In Permanent
Symptoms
Major Organ / Bone Marrow
Transplant

Riders are the additional benefits that you may buy and add to your policy at a nominal cost. They allow you to
enhance your insurance cover, qualitatively and quantitatively. To offer you comprehensive protection, we offer
a set of Riders that you can add to your BSLI solution and customized it based on your preferences at a nominal
cost.

Fund Management of BSLI

'Funds Management'
The management of the cash flow of a financial institution. The fund manager ensures that the maturity
schedules of the deposits coincide with the demand for loans. To do this, the manager looks at both the
liabilities and the assets which influence the bank’s ability to issue credit.
Investment Team:
One of BSLI’s main competitive advantages comes from the expertise and experience of their fund
management team who combine their individual skills to create a powerful team. Further, company’s research
team work adds value by ensuring their investment professionals are equipped with the latest market
information to make the best decisions for their customers.
The following investment funds are approved by IRDA.
1) Liquid Plus fund
2) Income Advantage fund
3) Assure fund
4) Protector fund
5) Builder fund
6) Enhancer fund
7) Creator fund
8) Magnifier fund
9) Maximizer fund

30
10) Multiplier fund
11) Super 20 fund
12) Pure Equity fund
13) Value & Momentum fund

1) Liquid Plus fund:(ULIF02807/10/11BSLLIQPLUS109)

Objective: To provide superior risk-adjusted returns with low volatility at a high level of safety and liquidity
through investments in high quality short-term fixed income instruments– up to one year maturity.
Strategy: Fund will invest in high quality short-term fixed income instruments – up to one year maturity. The
endeavor will be to optimize returns while providing liquidity and safety with very low risk profile.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 0% 100%
Equities & Equity Related Securities 0% 0%

Returns Period Actual BM

1 month 0.65% 0.71%
Absolute Return 3 month 1.93% 1.87%
6 month 3.98% 3.74%
1 Year 8.39% 7.76%
2 Year 8.46% 8.02%
3 Year 8.25% 7.95%
CAGR 4 Year - -
5 Year - -
Since Inception 8.10% 7.96%

Asset held as on 29th March, 2015: 51.45 Cr

Asset allocation
MMI, Deposits and CBLO: 100%

Asset allocation Ratings given by CRISIL on debt securities

31
2) Income Advantage fund: (ULIF01507/08/08BSLIINCADV109)
Objective: To provide capital preservation and regular income, at a high level of safety over a medium term
horizon by investing in high quality debt instruments.
Strategy: To actively manage the fund by building a portfolio of fixed income instruments with medium term
duration. The fund will invest in government securities, high rated corporate bonds, high quality money market
instruments and other fixed income securities. The quality of the assets purchased would aim to minimise the
credit risk and liquidity risk of the portfolio. The fund will maintain reasonable level of liquidity.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 100% 100%
Equities & Equity Related Securities 0% 0%

Returns Period Actual BM

1 month 0.33% 0.60%
Absolute Return 3 month 3.03% 2.42% Assets held on
6 month 8.81% 6.57% 29th March, 2015:
1 Year 14.67% 12.18% 541.25 Cr
2 Year 9.42% 8.18%
3 Year 9.99% 8.50% Asset allocation
CAGR 4 Year 9.49% 8.25% on 29th March,
5 Year 9.02% 7.58% 2015
Since Inception 11.10% 7.79% Corporate Debt
: 47.55%
Government
securities : 47.31%
MMI, Deposits and CBLO: 5.14%
32
 Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

3) Assure fund: (ULIF01008/07/05BSLIASSURE109)

Objective: To provide capital conservation, at a high level of safety and liquidity through judicious investments
in high quality short-term debt.
Strategy: To generate better return with low level of risk through investment into fixed interest securities
having short-term maturity profile.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 100% 100%
Equities & Equity Related Securities 0% 0%
Re Per A B
tur iod ct M
ns ua
l
Ab 1 0. 0.
33
 solute Return m
3
6
1
2
3
CAGR 4
5
Si

Asset held as on 29th March, 2015: 168.17 Cr

Asset allocation on 29th March,2015

Corporate Debt: 49.68%
MMI, Deposits, CBLO and others: 50.32%

Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

34
4) Protector fund: (ULIF00313/03/01BSLPROTECT109)
Objective: To generate consistent returns through active management of a fixed income portfolio and focus on
creating a long-term equity portfolio, which will enhance the yield of the composite portfolio with minimum
risk appetite.
Strategy: To invest in fixed income securities with marginal exposure to equity up to 10% at low level of risk.
This investment fund is suitable for those who want to preserve their capital and earn a steady return on
investment through higher exposure to debt securities.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 90% 100%
Equities & Equity Related Securities 0% 10%

Returns Period Protector BM

1 month -0.01% 0.14%
Absolute Return 3 month 3.02% 2.46%
6 month 8.70% 6.62%
1 Year 16.65% 13.51%
2 Year 10.93% 9.44%
3 Year 10.66% 9.25%
CAGR 4 Year 9.28% 8.42%
5 Year 8.56% 7.78%
Since Inception 8.73% 6.49%

35
Asset held as on 29th March, 2015: 428.74 Cr
Asset allocation
Government securities 45.93%
Corporate debt 40.83%
Equity 9.73%
MMI, Deposits, CBLO & Others 3.50%

Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

Sectorial allocation

36
5)Builder fund: (ULIF00113/03/01BSLBUILDER109)
Objective: To build capital and generate better returns at a moderate level of risk, over a medium or long-term
period through a balance of investment in equity and debt.
Strategy: To generate better returns with a moderate level of risk through active management of a fixed income
portfolio and focus on creating a long-term equity portfolio, which will enhance the yield of the composite
portfolio with low level of risk appetite.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 80% 90%
Equities & Equity Related Securities 10% 20%

Returns Period Actual BM

1 month -0.04% -0.31%
Absolute Return 3 month 3.41% 2.48%
6 month 9.23% 6.66%
1 Year 19.55% 14.85%
2 Year 13.34% 10.69%
3 Year 12.45% 9.99%
CAGR 4 Year 10.18% 8.56%
5 Year 9.39% 7.96%
37
 Since Inception 10.67% 7.50%

Asset held as on 29th March, 2015: 294.70 Cr

Asset allocation
Government securities 44.39%
Corporate debt 32.66%
Equity 19.31%
MMI, Deposits, CBLO & Others 3.65%

Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

Sectorial allocation

38
6) Enhancer Fund: (ULIF00213/03/01BSLENHANCE109)
Objective: To grow capital through enhanced returns over a medium to long-term period
Through investments in equity and debt instruments, thereby providing a good balance between risk and return.
It is suitable for individuals seeking higher returns with a balanced equity-debt exposure.
Strategy: To earn capital appreciation by maintaining a diversified equity portfolio and seek to earn regular
returns on the fixed income portfolio by active management resulting in wealth creation for policy owners.
Assets allocation Minimum Maximum
Debt Instruments, Money Market & Cash 65% 80%
Equities & Equity Related Securities 20% 35%

Returns Period Actual BM

1 month -0.48% -0.78%
Absolute Return 3 month 3.41% 2.44%
6 month 7.82% 6.57%
1 Year 18.48% 15.85%
2 Year 12.98% 11.62%
3 Year 11.89% 10.42%
CAGR 4 Year 9.19% 8.39%
5 Year 8.69% 7.83%
Since Inception 11.92% 8.53%

39
Asset held as on 29th March, 2015: 7132.64 Cr
Asset allocation
Government securities 28.32%
Corporate debt 35.94%
Equity 29.22%
MMI, Deposits, CBLO & Others 6.07%
Securitized Debt 0.46%

Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

7) Creator fund: (ULIF00704/02/04BSLCREATOR109)

40
Objective: To achieve optimum balance between growth and stability to provide long-term capital appreciation
with balanced level of risk by investing in fixed income securities and high quality equity security. This fund
option is for those who are willing to take average to high level of risk to earn attractive returns over a long
period of time.
Strategy: To invest into fixed income securities and maintaining diversified equity portfolio along with active
fund management of the policyholder’s wealth in the long run.
Assets allocation Minimum Maximum
Debt Instruments, Money Market & Cash 50% 70%
Equities & Equity Related Securities 30% 50%

Returns Period Actual BM

1 month -1.39% -1.69%
Absolute Return 3 month 3.93% 2.48%
6 month 10.17% 6.63%
1 Year 25.59% 18.51%
2 Year 17.97% 14.08%
3 Year 14.84% 11.83%
CAGR 4 Year 10.51% 8.57%
5 Year 9.84% 8.07%
Since Inception 13.33% 10.39%

Asset held as on 29th March, 2015: 440.65 Cr

Asset allocation
Government securities 30.66%
Corporate debt 18.15%
Equity 47.62%
MMI, Deposits, CBLO & Others 3.57%

41
 Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

Sectoral allocation

42
8) Magnifier fund: (ULIF00826/06/04BSLIIMAGNI109)
Objective: To maximize wealth by managing diversified portfolio.
Strategy: To invest in high quality equity security to provide long-term capital appreciation with high level of
risk. This fund option is suitable for those who want to have wealth maximization over long-term period with
equity market dynamics

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 10% 50%
Equities & Equity Related Securities 50% 90%

Returns Period Actual BM

1 month -2.24% -3.47%
Absolute Return 3 month 5.60% 2.37%
6 month 9.21% 6.06%
1 Year 30.85% 22.70%
2 Year 23.08% 18.76%
3 Year 17.86% 14.26%
CAGR 4 Year 10.46% 8.50%
5 Year 10.01% 8.18%
Since Inception 14.60% 7.53%

43
Asset held as on 29th March, 2015: 1165.78 Cr

Asset allocation
Government securities 0.18%
Corporate debt 0.08%
Equity 87.57%
MMI, Deposits, CBLO & Others 12.17%

Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

Sectorial allocation

44
9) Maximizerfund:(ULIF01101/06/07BSLIINMAXI109)
Objective: To provide long-term capital appreciation by actively managing a well-diversified equity portfolio
of fundamentally strong blue chip companies. Further, the fund seeks to provide a cushion against the sudden
volatility in the equities through some investments in short-term money market instruments.
Strategy: To build and actively manage a well-diversified equity portfolio of value and growth driven stocks by
following a research focused investment approach. While appreciating the high risk associated with equities, the
fund would attempt to maximize the risk-return pay off for the long-term advantage of the policyholders. The
fund will also explore the option of having exposure to quality mid-cap stocks. The non-equity portion of the
fund will be invested in good rated (P1/A1 and above) money market instruments and fixed deposits. The fund
will also maintain a reasonable level of liquidity.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 0% 20%
Equities & Equity Related Securities 80% 100%

Returns Period Actual BM

1 month -2.82% -3.93%
Absolute Return 3 month 5.57% 2.41%
6 month 10.5% 6.30%
1 Year 36.06% 24.45%
2 Year 25.53% 19.95%
3 Year 18.87% 14.93%
CAGR 4 Year 9.92% 8.49%
45
 5 Year 9.34% 8.18%
Since Inception 10.66% 8.16%

Asset held as on 29th March, 2015: 2461.23 Cr

Asset allocation
Equity 96.77%
MMI, Deposits, CBLO & Others 3.23%
Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

Sectorial allocation

46
10) Multiplierfund :( ULIF01217/10/07BSLIINMULTI109)
Objective: To provide long-term wealth maximization by actively managing a well-diversified equity portfolio,
predominantly comprising of companies whose market capitalization is close to Rs. 1000 crores and above.
Strategy: To build and actively manage a well-diversified equity portfolio of value and growth driven stocks by
following a research driven investment approach. The investments would be predominantly made in mid-cap
stocks, with an option to invest 30% in large-cap stocks as well. While appreciating the high risk associated
with equities, the fund would attempt to maximize the risk-return pay-off for the long-term advantage of the
policyholders. The fund will also maintain reasonable level of liquidity.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 0% 20%
Equities & Equity Related Securities 80% 100%

Returns Period Actual BM

1 month 0.23% -0.84%
Absolute Return 3 month 5.68% 2.84%
6 month 15.28% 12.08%
1 Year 54.03% 44.12%
2 Year 36.87% 28.12%
3 Year 24.77% 16.36%
CAGR 4 Year 16.82% 10.86%

47
 5 Year 13.73% 9.28%
Since Inception 11.23% 6.47%

Asset held as on 29th March, 2015: 493.49 Cr

Asset allocation
Equity 94.88%
MMI, Deposits, CBLO & Others 5.12%

Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

Sectorial allocation

48
11) Super 20 fund :( ULIF01723/06/09BSLSUPER20109)
Objective: To generate long-term capital appreciation for policyholders by making investments in
fundamentally strong and liquid large-cap companies.
Strategy: To build and actively manage an equity portfolio of 20 fundamentally strong large cap stocks in
terms of market capitalization by following an in-depth research-focused investment approach. The fund will
attempt to adequately diversify across sectors. The fund will invest in companies having financial strength,
robust, efficient and visionary management, enjoying competitive advantage along with good growth prospects
and adequate market liquidity. The fund will adopt a disciplined yet flexible long-term approach towards
investing with a focus on generating long-term capital appreciation. The non-equity portion of the fund will be
invested in high rated money market instruments and fixed deposits. The fund will also maintain reasonable
level of liquidity.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 0% 20%
Equities & Equity Related Securities 80% 100%

Returns Period Actual BM

1 month -4.23% -4.35%
Absolute Return
3 month 4.49% 1.36%
6 month 8.07% 4.17%

49
 1 Year 27.13% 21.44%
2 Year 23.10% 18.82%
3 Year 18.16% 14.65%
CAGR 4 Year 11.27% 7.95%
5 Year 11.71% 8.17%
Since Inception 14.20% 10.75%

Asset held as on 29th March, 2015: 631.62 Cr

Asset allocation
Equity 95.42%
MMI, Deposits, CBLO & Others 4.58%
Asset allocation Ratings given by CRISIL on debt securities

Performance of the fund compared to benchmark given by CRISIL

Sectorial allocation

50
12) Pure Equity fund: (ULIF02707/10/11BSLIPUREEQ109)
Objective: To provide long-term wealth creation by actively managing portfolio through
Investment in selective businesses. Fund will not invest in businesses that provide goods or
Services in gambling, lottery /contests, animal produce, liquor, tobacco, entertainment like films or hotels,
banks and financial institutions.
Strategy: To build and actively manage a well-diversified equity portfolio of value and growth driven
fundamentally strong companies by following a research-focused investment approach. Equity investments in
companies will be made in strict compliance with the objective of the fund. The fund will not invest in banks
and financial institutions and companies whose interest income exceeds 3% of total revenues. Investment in
leveraged-firms is restrained on the provision that heavily indebted companies ought to serve a considerable
amount of their revenue in interest payments.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 0% 20%
Equities & Equity Related Securities 80% 100%

Returns Period Actual

1 month 0.29%
Absolute Return 3 month 7.75%
6 month 11.17%
1 Year 49.73%

51
 2 Year 34.64%
3 Year 26.00%
CAGR 4 Year -
5 Year -
Since Inception 25.61%

Asset held as on 29th March, 2015: 17.88 Cr

Asset allocation
Equity 96.83%
MMI, Deposits, CBLO & Others 3.17%
Asset allocation

Sectorial allocation

52
13) Value & Momentum fund: (ULIF02907/10/11BSLIVALUEM109)
Objective: To provide long-term wealth maximization by managing a well-diversified equity portfolio
predominantly comprising of deep value stocks with strong price and earnings momentum.
Strategy: To build and manage a well-diversified equity portfolio of value and momentum
Driven stocks by following a prudent mix of qualitative and quantitative investment factors. This strategy has
outperformed the broader market indices over long-term. The fund would seek to identify companies, which
have attractive business fundamentals, competent management and prospects of robust future growth and are
yet available at a discount to their intrinsic value and display good momentum. The fund will also maintain
reasonable levels of liquidity.

Assets allocation Minimum Maximum

Debt Instruments, Money Market & Cash 0% 20%
Equities & Equity Related Securities 80% 100%

Returns Period Actual BM

1 month -2.36% -3.93%
Absolute Return 3 month -1.51% 2.41%
6 month 7.89% 6.30%
1 Year 40.18% 24.44%
2 Year 25.89% 19.94%
53
 3 Year 18.50% 14.93%
CAGR 4 Year - -
5 Year - -
Since Inception 18.27% 15.60%

Asset held as on 29th March, 2015: 44.56 Cr

Asset allocation
Corporate Debt 0.31%
Equity 88.68%
MMI, Deposits, CBLO &Others 11.00%
Asset allocation Ratings given by CRISIL on debt securities

54
PART 3

55
 SWOT ANALYSIS
The SWOT analysis was created by Albert S. Humphrey in the 1960s as a means to start figuring out where the
company fit in the market place. SWOT analysis stands for Strengths, Weaknesses, Opportunities and Threats.
It is an analysis of an organization’s strengths and weaknesses alongside the opportunities and threats present in
the external environment. The analysis involves the collection and portrayal of information about internal and
external factors which have, or may have, an impact on business.

It overall has 5 key benefits to an organization:

 Simple to do and practical to use in your company

 Easily understood
 Allows for a focused approach on internal and external factors impacting your business.
 Helps to identify what your organization’s future goals are.
 Allow to uncover the things that need more analysis.

The SWOT analysis for Birla Sun life is:

56
STRENGTHS
 Multi-channeldistribution

 Well diversified plans

 Superior investment and risk management framework

 Strong capital base

 Backed by Aditya Birla Brand and Sunlife financial services

WEAKNESS
 Company has not penetrated in the rural market.

 There is less plan for low income group

 Fees for the advisor is higher than other company

 Less advertising as compared to competitors

OPPORTUNITIES
 Good potential market

57
  Company can penetrate in rural market

 Alignment with government schemes

THREATS
 Old habits die hard: It’s still very difficult task to win the confidence of public towards private company.

 Competitors offering similar kind of insurance

 Economic crisis and instability.

INDUSTRY ANALYSIS
Porter’s five force model:
The five forces model was developed by Michael E. Porter to help companies assess the nature of an
industry’s competitiveness and develop corporate strategies accordingly. The framework allows a business
to identify and analyze the important forces that determine the profitability of an industry.

58
1. Threat of New Entrant
The average entrepreneur can’t come along and start a large insurance company. The threat of new entrants lies
within the insurance industry itself. Some companies have carved out niche areas in which they underwrite
insurance. These insurance companies are fearful of being squeezed out by the big players. Another threat for
many insurance companies is other financial services companies entering the market.

1. Power of Suppliers
The suppliers of capital might not pose a big threat, but the threat of suppliers luring away human capital does.
If a talented insurance underwriter is working for a smaller insurance company (or one in a niche industry),
there is the chance that person will be enticed away by larger companies looking to move into a particular
market.

2. Bargaining Power of Buyers

The individual doesn't pose much of a threat to the insurance industry. Large corporate clients have a lot more
bargaining power with insurance companies. Large corporate clients like airlines and pharmaceutical companies
pay millions of dollars a year in premiums. Insurance companies try extremely hard to get high-margin
corporate clients.

3. Availability of Substitutes
This one is pretty straight forward, for there are plenty of substitutes in the insurance industry. Most large
insurance companies offer similar suites of services. Whether it is auto, home, commercial, health or life
insurance, chances are there are competitors that can offer similar services. In some areas of insurance,
however, the availability of substitutes few Companies focusing on niche areas usually have a competitive
advantage, but this advantage depends entirely on the size of the niche and on whether there are any barriers
preventing other firms from entering.

4. Competitive Rivalry
The insurance industry is becoming highly competitive. The difference between one insurance company and
another is usually not that great. As a result, insurance has become more like a commodity - an area in which
the insurance company with the low cost structure, greater efficiency and better customer service will beat out
competitors. Insurance companies also use higher investment returns and a variety of insurance investment
59
products to try to lure in customers. In the long run, we're likely to see more consolidation in the insurance
industry. Larger companies prefer to take over or merge with other companies rather than spend the money to
market and advertise to people.

PART 4

60
 RESEARCH METHODOLOGY

Introduction:
Research Methodology is a way to find out the result of a given problem on a specific matter or problem that is
also referred as research problem. In Methodology, researcher uses different criteria for solving/searching the
given research problem. Different sources use different type of methods for solving the problem.

According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or
suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions;
and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis.
Data collection can be of two types:
 Primary Data Collection
 Secondary Data Collection

Primary Data Collection:

Primary research consists of a collection of original primary data collected by the researcher. It is often
undertaken after the researcher has gained some insight into the issue by reviewing secondary research or by
analyzing previously collected primary data. It can be accomplished through various methods, including
questionnaires and telephone interviews in market research, or experiments and direct observations in the
physical sciences, amongst others. The distinction between primary research and secondary research is crucial
among market-research professionals.An advantage of primary data is that it is specifically tailored to your
research needs. A disadvantage is that it is expensive to obtain as well as time consuming.For my research
project I have collected primary data through questionnaire method.
Secondary Data Collection:
Secondary data refers to data that was collected by someone other than the user. Common sources of secondary
data for social science include censuses, information collected by government departments, organizational
records and data that was originally collected for other research purposes.
Data Collection Methods:
 Collection of data is done by the primary source.
 Questionnaire and observation method is being used.
 Questionnaire formed was in such a way that to fulfill the objective of research.
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Research Design:
The research design refers to the overall strategy that you choose to integrate the different components of the
study in a coherent and logical way, thereby, ensuring you will effectively address the research problem; it
constitutes the blueprint for the collection, measurement, and analysis of data.

It would state the conceptual structure within which the research would be conducted. The research design
would facilitate and yield maximum information. The research design implemented here is Descriptive
Research.

Sampling:
Sampling is the process of selecting units (e.g., people, organizations) from a population of interest so that by
studying the sample we may fairly generalize our results back to the population from which they were chosen.
In research terms a sample is a group of people, objects, or items that are taken from a larger population for
measurement. The sample should be representative of the population to ensure that we can generalize the
findings from the research sample to the population as a whole.
For my research report I have used Random Sampling Method.

Sample size:
The sample was taken from the universe on random sampling basis in Pune. The respondents were currently
working or self-employed.
The sample size designed for this project is 50 keeping in mind the paucity of time.

Collection of the questionnaire

Sufficient time was given to the respondents to answer the questionnaire.
ANALYSIS AND INTERPRETATION

Data Analysis
The study has been conducted with the help of 50 respondents and their opinion has been taken for the analysis.
Most of the respondents are currently working and some are self-employed.
Some respondents did not want to answer the questionnaire, so they left it unanswered.
There are chances of biased information provided by the respondents.

62
Out of 50 respondents, male respondents are 34 and female respondents are 16

QUESTIONNAIRE ANALYSIS

Q.1 Do you have any RESPONSE % insurance policy?

YES Response
4 100% %

YES NO 0 152 0 76%

NO 48 24%

Interpretation:
Out of 200, the respondents who have an insurance policy are 76% and who don’t have an insurance policy are
24%. Most of them already have an insurance policy.

Q.2 If No, Are you interested in buying an insurance policy in the near future?

63
 Interested in buying insurance
0%

YES
NO

100%

Interpretation:
The respondents who do not have an insurance policy are 12 out of 200. All of them are interested in buying
insurance policy in the coming years.

Q.3If yes, which company insurance policy do you have?

COMPANIES RESPONSE %
LIC 80 50
Birla Sun life 4 3%
ICICI Prudential 12 9%
Bajaj Alliance 4 3%
HDFC Life Insurance 8 6%
SBI Life 28 20%
TOTAL 136 100%

64
 136
140 118
120
100
80
60 40
40 18 12
20 59% 6 3% 9% 6 3% 6% 20% 100%
0

RESPONSE %

Interpretation:
The study reveals that out of 200 respondents, 80 have an insurance policy. The maximum number of
respondents has taken policy from LIC that is 50% (20). LIC has the largest market share in insurance industry.
3% (1) of respondents has taken the policy from Birla Sunlife, 9% (3) from ICICI Prudential, 3% (1) from Bajaj
Alliance, 6% (2) from HDFC life insurance and 20% (7) has taken policy from SBI Life.

LIC is the market leader. LIC has been working in life insurance sector for more than 50 years. Private
companies like ICICI, HDFC etc. had started business from year 2000 onwards.

Q.4 Are you satisfied with your current insurance policy?

RESPONSE %
EXTREMELY 24 12%
SATISFIED
SATISFIED 52 26%
NEUTRAL 70 35%
DISSATISFIED 42 21%
EXTREMELY 12 6%
DISSATISFIED
TOTAL 200 100%

65
 200
180
160
140
120
100
80
60
40 RESPONSE
20
0 %

Interpretation:
The study shows that only 12% of the respondents were extremely satisfied, 9% were satisfied, 35% were
neutral, 21% were dissatisfied and 6% were extremely dissatisfied. By my observation, the reasons for their
dissatisfaction are high premium, less transparency and longer procedures.

Q.5 what amount of risk are you willing to take in your policy?

RISK RESPONSE %
Very High 12 6%
High 32 16%
Moderate 44 22%
Low 60 30%
Very Low 52 26%
TOTAL 200 100%

66
 200
180
160
140
120
100
RESPONSE
80
60 %
40
20
0

Interpretation:
The study shows that out of 200 respondents, 30% of the respondents tend to take very low risk and 26% of the
respondents tend to take low risk, 22% will take moderate risk, 16% will take high risk and only 6% with high
risk profile.
Most of the respondents have less surety of guaranteed returns so they have low risk profile.
Q.6what amount of premium are you ready to pay annually?

AMOUNT (in Rs) RESPONSE PERCENTAGE

5000-10000 32 16%
40%
10000-20000 72 36%
35%
30%
20000-30000 48 24%
25% 30000-40000 28 14%
20% 40000 & above 20 10%
15% TOTAL 200 100%
10%
5%
0%

Interpretation:

67
The study reveals that 16% of the respondents are ready to pay in the range of 5k-10k annually, 36% in the
range 10k-20k annually, 24% in the range of20k-30k annually, 14% in the range of 30k-40k annually and only
10% of the respondents are willing to pay above 40k.
Most of the respondents want to pay low premium annually because higher premium is not affordable for them.

Q.7 Till what duration is you willing to pay your premium?

NO. OF YEARS RESPONSE PERCENTAGE

10-15 years 48 24%
15-20 years 76 38%
20-25 years 40 20%
25-30 years 28 14%
30-35 years 4 4%
TOTAL 200 100%

Interpretation:
The study shows that 24% of the respondents are willing to pay for 10-15 years, 38% for 15-20 years, 20% for
20-25 years, 14% for 25-30 years, and only 4% for 30-35 years.
Most of the respondents want that the duration for paying the premium should be low.

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Q.8 what kind of Insurance policy will you prefer?

INSURANCE PLANS RESPONSE PERCENTAGE

ULIP 60 30%
Term Plan 88 44%
Child Plan 4 2%
Pension Plan 12 6%
Whole Life 36 18%
TOTAL 200 100%

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
ULIP Term Plan Child Plan Pension Plan Whole Life

Interpretation:
The Term plans were by far the most popular form of insurance among the respondents. On the other hand, very
few people took child plan. 30% of the respondents prefer to buy ULIP plan, 44% of the respondents prefer
term plan, 18% prefer whole life, 2% prefer child plan, and 6% prefer pension plan.

Q.9 what motivates you the most to buy an insurance policy?

RESPONSE
69 PERCENTAGE
 Family Security 60 30%
Retirement 32 16%
Children’s Future 16 8%
Investment 44 22%
Tax benefits 48 24%
TOTAL 200 100%

24%
30% Family Security
Retirement
Children’s Future
Investment

22% Tax benefits

16%

8%

Interpretation:
The study reveals that out of 50 respondents, 30% respondents are motivated to buy an insurance policy for
family security, 16% for retirement, 22% for investment purpose, 24% for tax benefits, and only 8% for
children’s future. Before liberalization, the main criteria to take life insurance were tax savings. But due to high
awareness people are mainly buying life insurance for tax benefits, investment and protection.

Q.10which factor will influence you to buy an insurance policy?

For this question the data analysis is done with the help of FACTOR ANALYSIS by using SPSS tool. Factor
analysis is a multivariate data reduction tool which requires all variables to be measured on a metric scale. In
marketing research we come across a large number of variables and managing the data becomes difficult.

70
Factor analysis is based on the principle of multi-colinearity between the variables. Those variables which have
high multi-colinearity will be combine into a single attribute.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling .558

Adequacy.

Bartlett's Test of Approx. Chi-Square 455.155

Sphericity
Df 45
Sig. .000

Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared

Loadings Loadings
Total % of Cumulative Total % of Cumulative Total % of Cumulative
Variance % Variance % Variance %
1 3.524 35.237 35.237 3.524 35.237 35.237 2.688 26.876 26.876

2 2.532 25.320 60.556 2.532 25.320 60.556 2.482 24.822 51.698

3 1.769 17.690 78.246 1.769 17.690 78.246 1.971 19.707 71.405

4 1.218 12.183 90.429 1.218 12.183 90.429 1.902 19.024 90.429

5 .449 4.486 94.915

6 .218 2.176 97.092

7 .102 1.023 98.115

8 .091 .907 99.022

9 .061 .613 99.635

10 .037 .365 100.000

Rotated Component Matrix

Component
1 2 3 4
Returns .959
Interest Rates .836
New Scheme Information .936
Ease of Buying .885
Insurance
Goodwill .911
Confidentiality of Info .956
Tax Benefit .953

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 Professionalism & .932
credibility of staff
Complaint Handling .975
Transparency .927
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 6 iterations.

Interpretation:
Given KMO value is .558

Chi square value is 455.15

And significant at level .000 which is less than 0.05

Therefore, KMO Bartlett’s test is significant indicating that factor analysis can be done.
From the table of Total variance Explained we find that at component 4 the cumulative % is 90.42 indicating
that 4 components will account for 90.42% variance as against 100% variance of all 10 variables.This indicates
that 10 variables can be combined into 4 components.

From the table of Rotated Component Matrix we observe that Interest rate (.836),New Scheme Information
(.936) and Ease of Buying insurance (.885). These will combine into one factor and will be called as
Convenience Factor.

Professionalism &credibility of staff (.932) and Complaint Handling (.975). These will combine into second
factor and will be called as Responsive Factor.
Goodwill (.911), Confidentiality of Info (.956) and Transparency (.927) these will combine into third factor
and will be called as Company Factor.Returns (.959) and Tax Benefits (.953). These will combine into forth
and will be called as Financial Factor.
LIMITATIONS OF THE STUDY

The limitations of my study are:

 The sample size taken is only 50 and as such is very small as compared to the universe, this is due to the
constraints of time and effort, and as such may not be enough to generalize the entire population, however it is
presumed that the sample represents the universe.
 Some of the respondents did not want to answer the questionnaire, so they left it unanswered.

72
 Enough care is taken in formulating the questionnaire; still some error may creep in.
 Time being a limiting factor and was not sufficient to gather options from majority of the respondents, who
form part of the universal sample.
 While every care is been taken to eliminate perceptual bias from the side of the researcher, however certain
element of bias might have set in research.

PART 5

73
FINDINGS
The findings of my study are:

74
 76% of the respondents have insurance policyand 24% of the respondents do not have the policy but they are
interested in buying the policy in the near future.

 The respondents who already have the policy, 59% of them have taken the policy from LIC.
Only 12% of the respondents are extremely satisfied with their current policy and 21% are dissatisfied.

 30% and 26% of the respondents tend to have very low and low risk profile.

 36% of the respondents want to pay the annual premium in the range of Rs.10000-Rs.20000.

 38% of the respondents want their premium paying term between 15-20 years.

 44% of the respondents prefer term plan & 30% of them prefer ULIP plan.

 Family security, Tax benefits & Investment mostly motivates them to buy a life insurance product.

 From the Factor Analysis, 10 factors are combined into 4 factors which are Convenience Factor, Responsive
Factor, Company Factor and Financial Factor.

SUGGESTIONS AND RECOMMENDATIONS

75
 According to my study, the company should focus on offering policies which gives more assurance in life.
 The company can penetrate in rural market as the brand is not known much to the people.
 The company can design the product which gives life benefit/ better returns.
 The company can gain the trust of the consumers through social media campaigns and direct marketing.

CONCLUSION
In our summer internship project, we have firstly taken the overview of insurance industry and rules and
regulations laid down by the IRDA (Insurance Regulatory Development Authority) which is controlling all the
insurance companies.

And then we have done the in-depth study of life insurance, in that we have studied how the life insurance
works, types of life insurance products etc.

We have also studied different functions of Birla Sun Life Insurance. In that we have made in depth study of
operation department, direct sales force and fund management function of Birla Sun Life Insurance.

We have also done the primary research on consumer behavior towards the different life insurance products,
conclusion and findings of which are presented above.

BIBLIOGRAPHY
 www.birlasunlife.com
 insurance.birlasunlife.com
 www.adityabirla.com
 www.bankbazar.com
 www.ccsenet.org
 Marketing Management – Philip Kotler, Keller, Koshy and Jha
76
 ANNEXURE

Questionnaire:
Name: Age:

Gender:

Male

Female

Q.1 Do you have any insurance policy?

Yes

No

Q.2 If No, Are you interested in buying an insurance policy in the near future?

77
 Yes

No

Q.3 If yes, which company insurance policy do you have?

LIC

Birla Sun life

ICICI Prudential

Bajaj Alliance

HDFC Life Insurance

SBI Life

Q.4 Are you satisfied with your current insurance policy?

Extremely Satisfied

Satisfied

Neither Satisfied nor Dissatisfied

Dissatisfied

Q.5What amount of risk are you willing to take in your policy?

(1 being the highest and 5 being the lowest)

1 2 3 4 5

Q.6What amount of premium are you ready to pay annually?

5000-10000

10000-20000

20000-30000

30000-40000

40000 & above

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Q.7 Till what duration are you willing to pay your premium?

10-15 years

15-20 years

20-25 years

25-30 years

30-35 years

Q.8 what kind of Insurance policy will you prefer?

ULIP

Term plan

Child plan

Pension plan

Whole life

Q.9 what motivates you the most to buy an insurance policy?

Family security

Retirement

Children’s future

Investment

Tax benefits

Q.10which factors will influence you to buy an insurance policy? (1 being strongly agree and 7 being strongly
disagree)

Returns ( )

Interest rates ( )

New scheme information ( )

Ease of buying insurance ( )

79
Goodwill ( )

Confidentiality of info ( )

Tax benefit ( )

Professionalism & credibility of staff ( )

Complaint handling ( )

Transparency ( )

80