CONTENTS

PREFACE
EXECUTIVE SUMMARY
INTRODUCTION TO INSURANCE 1.1
INTRODUCTION 1.2
FUNCTION OF LIFE INSURANCE 1.3
LIFE INSURANCE 1.4
ROLE OF INSURANCE 1.5
IMPORTANT OF INSURANCE 1.6
INSURANCE CYCLE
INTRODUCTION TO INDIAN INSURANCE INDUSTRY 2.1
INDIAN INSURANCE INDUSTRY 1.8
A BRIEF HISTORY OF INSURANCE
1.9
SECTOR
HOW BIG INSURANCE MARKET IS 1.10
INDIAN SCENERIO
INTRODUCTION OF TATA AIG 3.1
TATA GROUP 1.12
TATA GROUP IN INSURANCE 1.13
AIG
THE JOINT VENTURE 1.14
1.15

ABOUT THE TATA AIG 1.16

ORGANIZATION OF TATA AIG
INTRODUCTION TO THE RESEARCH STUDY 41
OBJECTIVE OF THE PROJECT 1.18
DATA ANALYSING 1.19
METHODOLOGY 1.20
QUESTIONAIRE DESIGNING 1.21
LIMITATION OF THE STUDY
RECOMMENDATION & BENEFIT 5.1
RECOMMENDATION TO THE
1.23
COMPANY
BENEFITS TO THE COMPANY
AND US
CONCLUSION & REFRENCE 6.1
CONCLUSION 1.25
QUESTIONAIRE
 INTRODUCTION TO INSURANCE

1.1. INTRODUCTION

"Insurance is a contract between two parties whereby one party called insurer undertakes in
exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of
money on the happening of a certain event." Insurance may be described as a social device to reduce
or eliminate risk of life and property. Under the plan of insurance, a large number of people associate
themselves by sharing risk, attached to individual. With the help of Insurance, large number of people
exposed to a similar risk makes contributions to a common fund out of which the losses suffered by
the unfortunate few, due to accidental events, are made good. Insurance is a tool by which fatalities
of a small number are compensated out of funds collected from plenteous. Gradually as competition
increased benefits given by industry to its customers increased by leaps and bounds. Insurance is a
basic form of risk management which provides protection against possible loss to life or physical
assets. Person who seeks protection against such loss is termed as insured, and company that
promises to honor claim, in case such loss is actually incurred by insured, is termed as Insurer. In
order to get insurance, insured is required to pay to insurance company a certain amount called
premium. Premium is collected by insurance companies which acts as trustee to pool created through
contributions made by persons seeking to protect themselves from common risk. Any loss to the
insured in case of happening of an uncertain event is paid out of this pool.

Insurance business is divided into four classes:

• Life Insurance

• Fire

• Marine

• Miscellaneous Insurance.

• Insurance provides:

• Protection to investor.
• Accumulation of savings.

• Channeling these savings into sectors needing huge long term investment.

1.2. FUNCTION OF INSURANCE:

Provide protection: The primary function of insurance is to provide protection against future risk,
accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide
for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk
with others.

Collective bearing of risk: Insurance is an instrument to share the financial loss of few among
many others. Insurance is a mean by which few losses are shared among larger number of people.
All the insured contribute the premiums towards a fund and out of which the persons exposed to a
particular risk is paid.

Assessment of risk: Insurance determines the probable volume of risk by evaluating various factors
that give rise to risk. Risk is the basis for determining the premium rate also.

Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty.
Insurance is device whereby the uncertain risks may be made more certain.

Small capital to cover larger risk: Insurance relieves the businessmen from security investments,
by paying small amount of premium against larger risks and uncertainty.

Contributes towards the development of industries: Insurance provides development

opportunity to those larger industries having more risks in their setting up. Even the financial
institutions may be prepared to give credit to sick industrial units which have insured their assets
including plant and machinery.
Means of savings and investment: Insurance serves as savings and investment, insurance is a
compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose
of availing income-tax exemptions also, people invest in insurance.

Source of earning foreign exchange: Insurance is an international business. The country can earn
foreign exchange by way of issue of marine insurance policies and various other ways.

Risk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with
the help of different types of policies under marine insurance cover.

1.3. LIFE INSURANCE:

Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a
premium paid undertakes to pay a fixed sum of money on The death of the insured or on the expiry
of a specified period of time Whichever is earlier. In case of life insurance, the payment for life
insurance policy is certain. The Event insured against is sure to happen only the time of its happening
is not known. So life insurance is known as „Life Assurance‟. The subject matter of insurance is life
of human being. Life insurance provides risk coverage to the life of a person. On death of the person
insurance offers protection against loss of income and compensate the titleholders of the policy.
1.4. ROLES OF THE LIFE INSURANCE:

Life insurance as an investment: -

Insurance products yield more than any other investment instruments and it also provides added
incentives or bonus offered by insurance companies.

Life insurance as risk cover: -

Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security
that no other form of invest can provide.

Life insurance as tax planning: -

Insurance serves as an excellent tax saving mechanism

1.5. IMPORTANCE OF THE LIFE INSURANCE:

Protection against untimely death: -

Life insurance provides protection to the dependents of the life insured and the family of the assured
in case of his untimely death. The dependents or family members get a fixed sum of money in case
of death of the assured.

Saving for old age: -

After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy
peace of mind and a sense of security in his/her old age.

Promotion of savings: -

Life insurance encourages people to save money compulsorily. When life policy is taken, the assured
is to pay premiums regularly to keep the policy in force and he cannot get back the premiums, only
surrender value can be returned to him. In case of surrender of policy, the policyholder gets the
surrendered value only after the expiry of duration of the policy.

Initiates investments: -

Life Insurance Corporation encourages and mobilizes the public savings and canalizes the same in
various investments for the economic development of the country. Life insurance is an important
tool for the mobilization and investment of small savings.

Credit worthiness: -

Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of
business.
Social Security: -

Life insurance is important for the society as a whole also. Life insurance enables a person to provide
for education and marriage of children and for construction of house. It helps a person to make
financial base for future.

Tax Benefit: -

Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C.

1.6. INSURANCE CYCLE:

Policy Renewal/Change Options/Application:-

The Insurance Cycle begins each year with the insurance offer. Actuarial documents are published
annually by the Risk Management Agency (RMA). The actuarial documents list the plan of
insurance, crop, type, variety, and practice that may be insured in a state and county, and show the
amounts of insurance, available insurance options, levels of coverage, price elections, applicable
premium rates, and subsidy amounts. The Special Provisions of Insurance list program calendar
dates, and general and special statements which may further define, limit, or modify coverage.

Sales Closing/Cancellation/Termination Dates:-

Insurance applications must be completed and signed no later than the sales closing date specified in
the crop actuarial documents. Applications signed after the crop sales closing date may be rejected
by the insurance provider.

Insurance coverage is continuous and can be cancelled by either the insurance provider or the
policyholder for the following crop year by providing a written notice to the other party no later than
the cancellation date specified in the crop policy. For a policyholder insured previous crop year, any
changes he or she wishes to make to the policy coverage must be made on or before the crop sales
closing date. The policy will automatically renew for the subsequent crop year unless the
policyholder cancels the policy in writing on or before the crop cancellation date. Insurance coverage
may be terminated by the insurance provider for the following crop year for nonpayment of
outstanding debt by providing a written notice to the policyholder no later than the termination date
specified in the crop policy. The insurance provider may terminate coverage on a crop if no premium
is earned for three consecutive years.

Acceptance:-

Upon receipt of a properly completed and timely submitted insurance application, the insurance
provider will accept and process the application, unless the applicant is determined to be ineligible
under the contract or Federal statute or regulation. The insurance provider will issue a summary of
coverage and the appropriate policy documents to the applicant. After the application is accepted,
the policyholder may not cancel the policy for the initial crop year.
Insurance Attaches: -

For annual crops, insurance attaches annually when planting begins on the insurance unit. The crop
must be planted on or before the crop's published final planting date unless late or prevented planting
provisions apply. If prevented planting provisions apply, and the crop cannot be timely planted due
to the causes specified in the crop provisions, such acreage may be eligible for a prevented planting
payment.

Acreage Reports:-

The policyholder must annually report for each insured crop in the county the number of insurable
and uninsurable acres planted or prevented from being planted if prevented planting is available for
the crop, the date the acreage was planted, share in the crop, the acreage location, farming practices
used, and types or varieties planted to the insurance provider on or before the applicable acreage
reporting date specified in the crop actuarial documents.

Summary of Coverage:-

The insurance provider will process a properly completed and timely filed acreage report, and issue
to the policyholder a summary of coverage that specifies the insured crop, the insured acres and
amount of insurance or guarantee for each insurance unit. The policyholder may make changes to
the filed acreage report, if permitted by the insurance provider.

Premium Billing:-

The annual premium is earned and payable at the time insurance coverage begins. The insurance
provider shall issue a premium billing based upon the information contained in the acreage report no
earlier than the premium billing date specified in the crop actuarial documents. The premium billing
will specify the amount of premium and any administrative fees that may be due. If the premium or
administrative fees are not paid by the date specified in the actuarial documents or policy, the
insurance provider may assess interest on the outstanding premium balance.

Notice of Damage or Loss: -

A written notice of damage or loss for each unit is to be filed by the policyholder within 72 hours of
the policyholder's initial discovery of damage or loss but not later than 15 days after the calendar
date for the end of the insurance period unless otherwise stated in the individual crop policy. The
policyholder should refer to the individual crop provisions for additional requirements in the event
of damage or loss. These notifications provide the opportunity for the insurance provider to inspect
the crop and determine the extent of damage or potential production before the crop is harvested or
otherwise disposed of.

Inspection:-

After the insurance provider receives the written notice of damage or loss, it will be processed and,
if necessary, a loss adjuster will be sent to inspect the damaged crop and gather pertinent information
concerning the damage. If the policyholder wishes to destroy or not harvest the crop,the loss adjuster
will gather the appropriate information, conduct an appraisal to establish the crop's remaining value
and complete any forms needed. If the crop has been harvested or will not be harvested by the end
of the insurance period, and the policyholder wishes to file a claim for indemnity, the loss adjuster
will gather the appropriate information and assist the policyholder in filing the claim for indemnity.
It is the policyholder's responsibility to establish the time, location, cause, and amount of any loss.

Indemnity Claim:-

After the claim for indemnity is processed by the insurance provider, an indemnity check and a
summary of indemnity payment will be issued showing any deductions to the amount of indemnity
for outstanding premium, interest, or administrative fees.

Contract Change Date:-

Changes to the insurance program may be made by RMA from one year to the next. The insurance
provider will notify the policyholder in writing of any changes to the policy, actuarial documents, or
the Special Provisions of Insurance prior to the calendar date for contract changes specified in the
crop policy. The policyholder will have the opportunity to review the changes and, if he/she desires,
continue the insurance coverage for the following crop year, change the policy coverage, or cancel
the insurance coverage. Any changes to the policy coverage that the policyholder makes must be
made no later than the crop sales closing date. If the policyholder wishes to cancel the policy, a
written notice must be submitted to the insurance provider on or before the crop cancellation date.
 INTRODUCTION TO INDIAN INSURANCE INDUSTRY

2.1. INDIAN INSURANCE INDUSTRY

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

Corporation Act, 1956 and General Insurance Business (Nationalization) Act, 1972, Insurance
Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large
population and the untapped market area of this population Insurance happens to be a very big
opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually.
Together with banking services, it adds about 7 per cent to the country‟s GDP .In spite of all this
growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of
Indian populations are without Life insurance cover and the Health insurance. This is an indicator
that growth potential for the insurance sector is immense in India. It was due to this immense growth
that the regulations were introduced in the insurance sector and in continuation “Malhotra
Committee” was constituted by the government in 1993 to examine the various aspects of the
industry. The key element of the reform process was Participation of overseas insurance companies
with 26% capital. Creating a more efficient and competitive financial system suitable for the
requirements of the economy was the main idea behind this reform. Since then the insurance industry
has gone through many sea changes .The competition LIC started facing from these companies were
threatening to the existence of LIC .since the liberalization of the industry the insurance industry has
never looked back and today stand as the one of the most competitive and exploring industry in India.
The entry of the private players and the increased use of the new distribution are in the limelight
today. The use of new distribution techniques and the IT tools has increased the scope of the industry
in the longer run.
2.2. A BRIEF HISTORY OF THE INSURANCE SECTOR:

The business of life insurance in India in its existing form started in India in the year 1818 with the
establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones
in the life insurance business in India are given in the following table.

Years Important milestones in the Indian life insurance business

The Indian Life Assurance Companies Act came into force for regulating the life
1912:
insurance business.

The Indian Insurance Companies Act was enacted for enabling the government to collect
statis information on both life and non-life insurance businesses.

The earlier legislation consolidated the Insurance Act with the aim of safeguarding the
interests of the insu public.

245 Indian and foreign insurers and provident societies were taken over by the central
government and got nationalized. LIC was formed by an Act of Parliament, viz. LIC
Act, 1956. It started off with a capi
Rs. 5 crore and that too from the Government of India.
Table: 1

The General insurance business in India, on the other hand, can trace its roots to the Triton

Insurance Company Ltd., the first general insurance company established in the year 1850 in

Calcutta by the British. Some of the important milestones in the general insurance business in India
are given in the following table:

Y Important milestones in the Indian general insurance

ears business
The Indian Mercantile Insurance Ltd. was set up which was
the first company of its type to transact all general insurance
business.
General Insurance Council, an arm of the Insurance
Association of India, framed a code of conduct for
guaranteeing fair conduct and sound business patterns.
The Insurance Act improved for regulating investments and
set minimal solvency levels and the Tariff Advisory Committee
was set up.
The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India. It was
with effect from 1st January 1973.
Table: 2

1996 : setting up of (interim) Insurance Regulatory Authority (IRA) Recommendations of the IRA.
1997 Mukherjee Committee Report submitted but not made public 1997 The Government gives
greater autonomy to LIC, GIC and its subsidiaries with regard to the restructuring of boards and
flexibility in investment norms aimed at channeling funds to the infrastructure sector. 1998 The
cabinet decides to allow 40% foreign equity in private insurance companies-
26% to foreign companies and 14% to NRI‟s, OCB‟s and FII‟s
1999: The Standing Committee headed by Murali Deora decides that foreign equity in private
insurance should be limited to 26%. The IRA bill is renamed the Insurance Regulatory and
Development Authority (IRDA) Bill. 1999 Cabinet clears IRDA Bill. 2000 President gives
Assent to the IRDA Bill.

2.3. INDIAN INSURANCE MARKET (HISTORY):

Insurance has a long history in India. Life Insurance in its current form was introduced in 1818 when
Oriental Life Insurance Company began its operations in India. General Insurance was however a
comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History
of Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalization b)
Nationalization and c) Post Nationalization. Life Insurance was the first to be nationalized in 1956.
Life Insurance Corporation of India was formed by consolidating the operations of various insurance
companies. General Insurance followed suit and was nationalized in 1973. General Insurance
Corporation of India was set up as the controlling body with New India, United India, National and
Oriental as its subsidiaries. The process of opening up the insurance sector was initiated against the
background of Economic Reform process which commenced from 1991. For this purpose Malhotra
Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory
Development Act (IRDA) was passed in 999. Resultantly Indian Insurance was opened for private
companies and Private Insurance Company effectively started operations from 2001.

2.4. HOW BIG IS THE INSURANCE MARKET?

The insurance sector was opened up for private participation four years ago. For years now, the
private players are active in the liberalized environment. The insurance market have witnessed
dynamic changes which includes presence of a fairly large number of insurers both life and non-life
segment. Most of the private insurance companies have formed joint venture partnering well
recognized foreign players across the globe. There are now 29 insurance companies operating in the
Indian market – 14 private life insurers, nine private non-life insurers and six public sector
companies. With many more joint ventures in the offing, the insurance industry in India today stands
at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed
scenario. There is pressure from both within the country and outside on the Government to increase
the foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV partners
to bring in funds for expansion. There are opportunities in the pensions sector where regulations are
being framed.

Less than 10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first license
for a standalone health company in the country as many more players wait to enter. The health
insurance sector has tremendous growth potential, and as it matures and new players enter, product
innovation and enhancement will increase. The deepening of the health database over time will also
allow players to develop and price products for larger segments of society. Insurance is a Rs.400
billion business in India, and together with banking services adds about 7% to India's Gap.

2.5 INDIAN SCENERIO:-

Indian economy is the 12th largest in the world, with a GDP of $1.25 trillion and 3rd largest in terms
of purchasing power parity. With factors like a stable 8-9 per cent annual growth, rising foreign
exchange reserves, a booming capital market and a rapidly expanding FDI inflows, it is on the hinge
of an ever increasing growth curve. Indians have a tendency to invest in properties and gold followed
by bank deposits. They selectively invest in shares also but the percentage is very small--4-5%. This
in itself is an indicator that growth potential for the insurance sector is immense. It‟s a business
growing at the rate of 15-20% per annum and presently is of the order of $47.9 billion. India is a vast
market for life insurance that is directly proportional to the growth in premiums and an increase in
life density. With the entry of private sector players backed by foreign expertise, Indian insurance
market has become more vibrant.Competition in this market is increasing with company‟s
continuous effort to lure the customers with new product offerings. However, the market share of
private insurance companies remains very low -- in the 10-15% range. Even to this day, Life
Insurance Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of
government still dominates the market, with price controls, limits on ownership, and other restraints.
The upward growth trend started from 2000 was mainly due to economic policies adopted by the
then Indian government. This year saw initiation of an era of economic liberalization and
globalization in the Indian economy followed by several reforms and long-term policies that created
a perfect roadmap for the success of Indian financial markets.
Figure: 1

The general insurance industry grew by 16% in 2006-07 as private insurers continued their robust
performance, while public sector players like New India Assurance and Oriental Insurance improved
their show. Despite continuous fall in business of government-owned National Insurance, the 12 non-
life insurers collected Rs 20,378 crore in first year premium in the last fiscal compared to Rs 17,531
crore collected in 2005-06, according to data compiled by regulator IRDA. New India Assurance
collected Rs 4,762 crore in premium and continued to lead the non-life sector by cornering 23.36%
of the market. National Insurance was at the second spot by collecting Rs 3,524 crore in premium, a
decline of 7%, but had a market pie of 17.29%. Oriental Insurance mopped up Rs 3,518 crore in
premium income after logging 16.6% growth in business to corner a market share of 17.26%.
Another PSU insurer United India grew by a modest 6.8% to collect Rs 3,147 crore in premium and
had 15.44% of the market. The eight private players expanded their business by 52% to collect Rs
5,427 crore in premium income and increased their combined market share to 26.6% from 20.2% a
year ago. ICICI Lombard led the private players by logging 80% growth in premium at Rs
1,592crore, followed by Bajaj Allianz, which grew by 50% to collect Rs 1,287 crore in premium.
ICICI Lombard had a market share of 7.81% and Bajaj Allianz had 6.31% of the market.
 INTRODUCTION TO TATA AIG

3.1 TATA AIG INSURANCE COMPANY

Tata Enterprises with 82 companies, spread over seven sectors and with an annual turnover
exceeding US $ 8.8 billion, employs more than 262,000 people. Tata Group has shown over years
that it is a value driven company and has pioneering contributions in various fields including
insurance, aviation, iron and steel. In terms of capital market performance as many as 40 listed Tata
companies account for nearly 5% of the total market capitalization of all listed companies. The Group
has had a long association with India's insurance sector having been the largest insurance company
in India prior to the nationalization of insurance.

3.2. TATA GROUP IN INSURANCE:

Tata AIG General Insurance Company Ltd, and Tata AIG Life Insurance Company Ltd.,
(collectively "Tata AIG") are joint venture companies between the Tata group India's most trusted
industrial house and American International Group, Inc. (AIG), the leading U. S. based international
insurance and financial services organization. The Late Sir Dorab Tata, was the founder Chairman
of New India Assurance Co. Ltd., a group company incorporated way back in 1919. Government of
India took over the management of this company as a part of nationalization of general insurance
companies in 1972. Not deterred by the move, Tata group have ventured into risk management
services having tied up with AIG group, back in 1977, with the incorporation of Tata AIG Risk
Management Services Pvt. Ltd. The Tata Group is one of India's largest and most respected business
conglomerates, with revenues in 2006-07 of $28.8 billion (Rs129,994 crore), the equivalent of about
3.2 per cent of the country's GDP, and a market capitalization of $72.2 billion as on December 6,
2007. Tata companies together employ some 289,500 people.

3.3. AIG:

American International Group, Inc. (AIG), is a major American insurance corporation based at the
American International Building in New York City. The British headquarters are located on
Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its
Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was the 18th-largest
company in the world.

Company Background: AIG’s history dates back to 1919, when Cornelius Vander Starr established
an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance
to the Chinese. • In 1962, Starr gave management of the company's less than successful U.S. holdings
to Maurice R. \"Hank\" Greenberg, who shifted the company's U.S. focus from personal insurance
to high.1969. American International Group, Inc is the leading U.S. based international insurance
and financial services organization and the largest underwriter of commercial and industrial
insurance in the United States. Its member companies write a wide range of commercial and personal
insurance products through a variety of distribution channels in over 130 countries and jurisdictions
throughout the world. AIG's Life Insurance operations comprise of the most extensive worldwide
network of any life insurer. AIG's global businesses also include financial services and asset
management, including aircraft leasing, financial products, trading and market making, consumer
finance, savings products.

3.4. THE JOINT VENTURE:

Tata AIG Life Insurance Co. Ltd. is capitalized at Rs. 185 crores of which 74 per cent has been
brought in by Tata Sons and the American partner brings in the balance 26 per cent. Mr.

George Oommen has been named managing director of Tata AIG Life. Tata-AIG plans to provide
broad array of life insurance plans to cover to both individuals and groups. The company
headquartered in Mumbai, with branch operations in Delhi, Chennai, Hyderabad, Bangalore
Calcutta, Pune and Chandigarh.

3.5. ABOUT TATA-AIG:

Tata AIG Insurance Solutions is one of the leading insurance companies that provide both life
insurance as well as general insurance. This pioneer company is a joint collaboration between the
American International Group, Inc. (AIG) and Tata Group. They own the company in the ratio of
26:74. It is a leading financial institution that has carved a niche for itself all over the world. Tata
AIG Insurance provides facilities to both corporate and individuals. Starting its operations on April
1, 2001, it seeks to serve different categories of people. It acquired its license for carrying out
operations in India on February 12, 2001. Tata AIG Insurance Solutions is one of the most prestigious
organizations in the business world. It employs thousands of employees and offers various
opportunities to people to build a prospective career. As a leading name in the financial world, it
identifies the potential and experience of the individual. This insurance company identifies the
clients‟ needs and works accordingly. It stresses on innovative aspect and opening of new markets.
It believes in new economy and latest Internet technology. Tata AIG Insurance offers a number of
products for the General
Insurance holders. General insurance products include:

• Individual insurance

• Small business insurance

• Corporate insurance

Tata AIG Insurance offers flexible life insurance to the individuals, business organization and other
association. For the corporate, there are various insurance products like group pensions, employee
benefits, work place solutions and credit life. For the individuals, Tata AIG Insurance offers various
products for adults, children and for retirement planning.
3.6 ORGANIZATION STRUCTURE OF TATA AIG:-
 INTRODUCTION OF THE RESEARCH STUDY

4.1. OBJECTIVE OF THE PROJECT:-

Main objective of the project is to find out the market potentialility of Tata AIG in Gwalior city.
Project is about to find out the competitors Tata AIG Life Insurance company. Nowadays all the
insurance companies in India are trying to establish themselves in the competitive market. They are
introducing innovative marketing strategies to survive in the market. Many other private companies
are looking to enter in the Indian insurance market.

To find out the market potentiality of Tata AIG in Gwalior city.

• Main competitors of Tata AIG.

• Which type of policies is preferable?

• Most preferable plans in Gwalior city.

• Which sector is most preferable public or private

• Targeting the right and potential customers

• Differentiating from other companies

 DATA ANALYSING
a. Age wise classification:

Age No Of Respondent

18 – 25 11

26 – 30 22

31 – 45 44

46 – to above 23

Interpretation: -

This chart shows that 44 people belong to age group of 31-45. So we can say adult more prefer
insurance.
b) Gender wise classification:

Gender No Of Respondent

Male 66

Female 34

Interpretation: -

This chart shows gender by classification that 66% male and 34% female have respondent .
a. Occupation Wise classification:

Occupation No Of Respondent

Serviceman 40

Businessman 25

Student 20

Housewive 15

Interpretation: -

This charts depicts that 40% servicemen and25% business men are respondent in my report.
b. Income wise classification:

Income No of Members

40k – 70k 17

70k – 1 Lake 41

1 Lake to 3 Lakes 28

3 Lacks 14

Interpretation: - 41% of people have tack insurance and is ranked number one by that percent of
respondent.
Que. 1 Are you Insured?

INSURED N0 of respondent
YES 72
NO 28
TOTAL 100

INSURED
80
70
60
50
40
30
20
10
0
YES NO
Series 1 72 28

Interpretation: -

That The 72% Respondent Have Insured It’s Mean People Have Aware To The Insurance.
Que. 2 Which kind of policies do you have?

NO POLICIES N0 of Respondent PARCENTAGE

1 LIFE 18 25%
INSURANCE
2
HEALTH 8 11%

3 INSURANCE
GENERAL 10 14%
4 INSURANCE
5 ALL OF THEM 36 50%
TOTAL 72 100%

Interpretation: -

It is clear from the chart that 50% people come to take all policies it’s mean customer have more
aware to the all type of insurance.
Que. 3 Are you aware all the plans and updates from company?

PLANS AND UPDATES N0 of Respondent PARCENTAGE

YES 48 67%
NO 24 33%
TOTAL 72 100%

Interpretation: -

It is clear from the chart that 48 people say yes and 24say no . It’s mean customer have more aware
to the all plans and updates for the company.
Que. 4 Are you satisfy of the plans these company?

SATISFACTION N0 of Respondent PARCENTAGE

YES 56 78%
NO 16 22%
TOTAL 72 100%

Interpretation: -

It is clear from the chart that 78% people say yes and 22% say no . It’s mean customer have more
satisfy to the plans for the company.

Que. 5 How do you come to know about these company product?

 NO SOURCE NO OF PARCENTAGE
RESPONDENT
1 NEWS PAPER 14 19%
2 AGENT 32 45%
3 ADVERTISMENT 14 19%
4 MOUTH OF SPREAD 12 17%

5 TOTAL 72 100%

News paper Agent Advertisment Mouth of spread

Series 1 14 32 14 12

Interpretation: -

This chart shows that agent is the most communicational tool for insurance company.

4.3. METHODOLOGY:
Research is totally based on primary data. Secondary data can be used only for the reference.
Research has been done by primary data collection, and primary data has been collected by meeting
with the people in Gwalior. Data collection has been done through by giving structured questioner.
This study will be based on sampling. This is an exploratory type of research. The study was aimed
at measuring the customer’s preference for life insurance companies and the comparison of various
insurance policies of the various companies on basis of various parameters based on customer’s
responses in Gwalior region only. The survey was done on hundred general residents of the selected
region.Methods adopted for surveys 1. Field survey method 2. Personal interview technique 3.
Secondary sources viz company database. The data collected are represented into suitable tabular
forms for drawing inferences. Quantitative techniques like averages, percentages, range, two-way
tables, chi- square tests analysis are applied as per the requirement.Thelevel of preference, perception
of the customers about the product and company.

4.4. Questionnaire Designing:

The project is on “Market Potential Study of Tata AIG in Gwalior city”. To know the market
potentiality of Tata AIG a questionnaire has been prepared. The questionnaire is having both open
ended and close ended questions. It is also having ranking, multiple choice and check list type of
questions. First part of the questionnaire is the demographic part. Questionnaire has been prepared
in such a way that we can understand insurance policies are dependable on the occupation of a person
or income level of a person. Which type of investment do they prefer? For it cluster analysis will be
used. Nowadays private players are giving a good rate of return rather than the public player. So in
which sector (private or public) do they like to invest and what is the reason behind that? To get to
know the reason Likert scale has been used. To get to know how much Tata AIG is preferable in
Gwalior city a ranking scale has been used where name of different major Insurance Companies have
been given and according to the ranking given by citizen we can get to know the potentiality of Tata
AIG in Gwalior city. There is different type of insurance policies in the market. Which type of
policies do they prefer can understand from the questionnaire. Which life insurance policies of Tata
AIG are most preferable we can get from it. To know all of these cluster analysis will be used.
Sample questionnaire has been attached with

4.5. LIMITATION OF THE STUDY:

• Time limitation

• Research has been done only in Gwalior.

• Companies did not disclose their secrets data and strategies.

• Possibility of Error in data collection.

• Possibility of Error in analysis of data due to small sample size.

• Respondents error

• Limited resources
 RECOMMENDATION AND BENEFIT

5.1. RECOMMENDATIONS TO THE COMPANY:

Being the best product player in the private sector, but still survey TATA AIG needs to improvement
regarding its premium charges and advertisement to its target customers.

A) Premium charges

Owing to its high premium charges (Tata AIG Apex Plan, Premium RS. 90000/-) customers
perception about the company’s product has become that its only for the upper middle class people.
Whereas TATA AIG do has some policy with low premium but the charges of allocation are too
high. So we would like to suggest slowing down its premium charges to some extend by reducing
administration charges and other charges.

b) Advertisement:

During survey we have found that due to lack of advertisements about the products and agents selling
the products in which they get high commissions customers are somewhere mislead and they know
about very few products though TATA AIG has wide range of variety of the products. So we would
recommend TATA AIG to invest more in advertisement in form of TV commercials, pamphlets and
hoardings.

c) Wrong perception:

AIG is on the edge of filing bankruptcy. So Tata AIG is also going to on the brink of filling
bankruptcy. But insurance in India is a highly regulated industry. Any company that wants to set up
an insurance business has to follow very stringent norms given by the Insurance Regulatory &
Development Authority (IRDA). So company should take positive measure to remove this wrong
perception from the people.

d) Sample size:
For this research study only hundred sample size has been taken. The result will be more appropriate
if a large sample size is considered.

5.2. BENEFITS TO THE COMPANY AND US:

During the survey time sales have been done. It is a win-win Situation for both company and me.
The benefits of this summer internship program are discussed below.

1. Benefit to the company:

a) This survey has been done in Gwalior region on comparison of TATAAIG‟s product and its
competitor can give an idea of this position in the market. As TATA AIG leads in most of
the parameters so it should continue to serve in the same manner.

b) The survey also shows the customers perception about TATA AIG‟s life Insurance product
with which it can improve its impression better than now. c) The recommendation has given
in this report will help TATA AIG to position its product properly to the target customers d)
Moreover the sales has been done during this internship have done a good business for the
company.

2. Benefit to us:

a) Doing internship in TATA AIG have given me immense experience in the insurance industry
for these fourteen weeks.

b) Interaction with the customers for survey and sales has developed our marketing skills.

c) Working in the office premises has given exposure to corporate world and an experience in
working in corporate pressure
 CONCLUSION AND REFERENCE

6.1 CONCLUSION

Indian insurance sector is likely to register unprecedented growth of 200% and attain a size of Rs.
2000 billion ($51.2 billion) by 2009-10, in which a private sector insurance business will achieve a
growth rate of 140% as a result of aggressive marketing technique being adopted by them against
35-40% growth rate of state owned insurance companies. The rural market offers tremendous growth
opportunities for insurance companies and insurers should develop viable and cost-effective
distribution channels; build consumer awareness and confidence.

The state owned insurance companies such as LIC and GIC have limited number of policies to offer
to their subscribers while in case of private insurance companies, their policy numbers are many
more and the premium amount as well as the maturity period is much competitive as against those
of government insurance companies. The private sector insurance players have started exploring the
rural markets in which until recently, the state owned companies had the monopoly.

Here it can be concluded that the summer internship program, done for partial fulfillment of the MBA
course in ICFAI University, in TATA AIG Life Insurance Co. Ltd. has been completed successfully.

Following are the achievements done during the summer internship from 24th February 2009 to 23rd
May 2009.

a) Survey done with interest of TATA AIG has been conducted successfully and results are discussed
above.

b) Sales done during the time have done great business to the company.

c) The experience gained during the internship has sharpen my skills and given a corporate exposure.
6.2. RFERENCES

For the references different books, journals, and newspapers have been used and different websites
have been used.

Name of websites:

• www.tata-aig.com/lifeinsurance, access on 8th April 2009

• www.tata-aiggeneral.com, access on 8thApril 2009

• www.tata-aig-life.com, access on 8thApril 2009

• www.mouthshut.com/product-reviews/Tata_AIG_General_Insuranceaccess on 10th April

2009

• www.irdaindia.org/duties/htmlaccess on 15 April 2009

• www.mydigitalfc.com/tata-aig-eyes-10-growth-motor-insurance-556.htm, access on
16thApril 2009

• www.economy watch.com/insurance-overviewaccess on 12 May 2009

• www.managementparadise.com/29381-distribution-channels-tata-aig.html, access on 12
May 2009

• www.andhra.net/27-Tata-AIG-General-60949.asp.htmaccess on 14th May 2009

• www.marketresearch.com/product/disply.asp?productid=1475505access on 15thMay 2009

Name of book and journal:

• Insurance Industry (ICFAI Publication)

• Business Research Method (ICFAI publication)

• Tata AIG Life Insurance Company Ltd, India, CGAP Working Group on Micro insurance

• Good and Bad Practices, Case Study No 14, James Roth and Vijay Athreye-September 2005

• Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to

Swaraj, Tapen Sinha, CRIS Discussion Paper Series –2002.X

 QUESTIONNAIRE

Market Potential study of Tata AIG in Delhi City

Dear Sir/Madam,

We are conducting a survey on Market potential study of Tata AIG in Delhi by Insurance
organizations. We hope for your kind coordination.

Name:
………………………………………………………………………………………………

Age: ………………………… Sex: Male [ ] Female [ ]

Name and address of the organization:

…………………………………………………………….
……………………………………………………………………………………........................
.............………………………………………………

Contact Number: ………………………………………

E-mail address:
……………………………………………………………………………………...........

1. Family Members: (Please tick)

a)1-4 [ ] b) 4-8 [ ] c) 8-12 [ ]

d) 12-16 [ ] e) 16> [ ]

2. Number of dependent family members: (Please Tick)

a) 1-2 [ ] b) 2-4 [ ] c) 4-6 [ ]

d) 6-8 [ ] e) More: …………………………

3. Occupation: (Please Tick)

a) Service [ ] b) Business [ ] c) Professional [ ]

b) d) Any other: ………………………………………...

4. Annual Income: (Please Tick)

a) 50000-100000 [ ] b) 100000-300000 [ ] c) 300000-500000 [ ]

c) 500000-1000000 [ ] e) 1000000 [ ]

5. In which would you like to invest? (Please Tick)

a) Fixed deposit [ ] b) Post office [ ] c) Mutual fund [ ]

d) Share buying [ ] e) Insurance policy [ ]

6. Do you have any insurance policy? (Please Tick)

a) Yes [ ] b) No [ ]

7. Which sector do you prefer? (Please Tick)

a) Public Sector [ ]

b) Private Players [ ]

8. Do you have any Insurance policy in the Following companies? (Please Tick)

a) LIC [ ] b) Tata AIG [ ] c) Birla Sun life [ ]

 c) ICICI [ ] e) Max New York [ ] f) Any Other: …………

9. Which type of policy do you prefer? (Please Tick)

a) Life Insurance [ ] b) Vehicle Insurance [ ] c) Pension plan [

]

d) Medi claim [ ] e) Any Other: ……………………

Que.10 How do you come to know about these company product?

a. News paper

b. Agent
c. Advertisement
d. Mouth of spread
e.

Que. 11 Are you satisfy of the plans these company?

a. Yes b. No

Any Comments:

………………………………………............

………………………………................................

…………………………………………………………………………………………….

………………..

Thank you, for your kind co-operation.

Signature: …………………………………..

Date: ………………………………………..