nirav_sunil final ppt

7/27/2019 Nirav_Sunil Final PPt

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A SUMMER TRAINING PRESENTATIONon

INVESTORE BEHAVIOR TOWARDS INVESTING IN LIFE INSURANCEPRODUCT

INAHMEDABAD CITY

AtEDELWEISS FINANCIAL ADVISORS LTD.

Submitted to :- Gandhinagar Institute of Technology

Prepared By

Nirav Parmar -127150592024

Sunil Malav -127150592017

Guided by:-Prof. RATNA TRIVEDI


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Sr. No. Particular Slide

No.1. Objectives of the study 3

2. Literature review 4

3. Industry profile 6

4. Company profile 95. Research methodology 15

6. Questionnaire analysis And its Interpretation 19

7. Hypothesis Testing 32

8. Findings 349. Suggestions 35

10. Limitations of the study 36

11. Conclusion 37

12. Bibliography 38


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The following are the objectives of the Study:

To know the investor behavior about the product.To know about the investors need for the product.

To know about why the investors not taken any life insurance policy.To know about investors preference for investing the money.To know about what kind of Life insurance plan they prefer.


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Heyman and Rowland (2006)Point out that investment officers of publicly held PC companies wrestlewith the question of how best to contribute to shareholder value. Oneapproach is to manage the investments independent of the insuranceoperations, as if they were a closed-end investment company that happensto be funded by insurance underwriting. Another approach is to investfunds primarily to defease the firms liabilities and thus support theinsurance operations of a company whose principal value derives from itsinsurance activities. The authors emphasize the second approach. Theyargue that the investment policy of most insurance companies should havetwo primary objectives:1. Immunizing insurance reserves with a fixed-income portfolio .2. Earning abnormal returns on surplus in a responsible and

disciplined way. The latter goal means adhering to an asset allocationapproach that takes account of the risk-reward tradeoffs presented bya broad variety of investment types as well as the accountingtreatment of investment income.


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Liebenberg, Carson, and Hoyt (2009) examine life insurance policyloan demand in terms of four hypotheses that have been put forth in theliterature. In contrast to previous studies that examined aggregate data,the authors use detailed data from the Survey of Consumer Finances thatallow an alternative and in some cases more direct examination of policyloan demand based on individual household circumstances. Unlike prior studies, the authors find a significantly positive relation between loandemand and recent household expense or income shocks. By observingactual life insurance holdings and policy loan data for families, theauthors provide evidence in support of the policy loan emergency fundhypothesis.The findings are particularly relevant for insurers since the results

provide evidence of an increase in policy loan disintermediat ionfollowing expense and/or income shocks at the household level,conditions that are particularly prevalent during recessionary times due tounemployment or reduced work hours. Such a finding is fundamental for insurers as they account for the effects of economic conditions in their

estimates of policy loan demand.


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1818 - British introduced the life insurance to India with the establishment of the Oriental Life Insurance Company in Calcutta.

1850 - Non life insurance started with Triton Insurance Company.

1870 - Bombay Mutual Life Assurance Society is the first India owned life insurer.

1912 - The Indian Life Assurance company Act enacted to regulate thelife insurance business.

1938 - The Insurance Act was enacted.


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1956 - Nationalization took place. Government took over 245 Indianand foreign insurers and provident societies.

1972 - Non-life business nationalized, General Insurance Corporation(GIC) came into being.

1993 - Malhotra committee was constituted under the chairmanship of former RBI chief R. N. Malhotra to draw a blue print for insurance sector reforms.

1994 - Malhotra committee recommended reentry of private players.

1997 - IRDA (Insurance Regulatory and Development Authority) was set upas a regulator of the insurance market in India.


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2000 - IRDA started giving license to private insurers. ICICI Prudential,HDFC were first private players to sell insurance Policies.

2001 - Royal Sundaram was the first non-life private player to sell an insurance policy.

2002 - Bank allowed to sell insurance plans as TPAs enter the scene, insurers start setting non-life claims in the cashless mode.


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Edelweiss capital was started by two IIM graduates Mr. Rashesh Shahand Mr. Venkat Ramaswam i . The Company is operating in India as anIntegrated Investment Banking Company . Edelweiss strives to be athinking organization, trying to be innovative and imaginative. The

policy of the company ensures transparency and greater opportunities for all its clients

SNAPSHOTApproach - Client Focus, Execution orientation, Culture, ProfessionalIntegrity, Research Driven

Aim- building long term relationships with the clients and equipping theclients about the market knowledge so that they can address the day by day fastgrowing opportunities


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USP- The single minded focus on thought leadership and relentless pursuit of thenew and different is it in products, services or people, model of employeeownership

Culture- Entrepreneurial and result driven emphasizing confidentiality and

integrity

Operations - stock broking, research services, distribution of financialproducts, depository services, and proprietary trading , 47 per cent of itsrevenue is from treasury and wholesale financing

Research (POD) - 90 researchers, covers over 200 stocks across 19sectors that accounts for about 70% of the total market capitalization


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Offices - operates from 56 offices in 21 Indian cities, employs over 1600employees

Major clients- ESL focuses on the wholesale equity segment, providing broking services to Institutional and corporate clients and high net worth

individuals

Market Capitalization - Rs 5,500 crore (Rs 55 billion),

Equity Base - over Rs 2,000crore

Website - www.edelcap.com www.edelweiss.in
http://www.edelcap.com/http://www.edelweiss.in/http://www.edelweiss.in/http://www.edelcap.com/


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Name Edelweiss Financial Advisers ltd.

Industry : Finance & Investment

Corporate Office Edelweiss House,

Off C S T Road Kalinan ,Mumbai,Maharashtra-400098

Chairman Mr. Rashesh Shah ( Chairman , CEO)

BSE Code 532922

NSE Code : EDELWEISS

Auditor BSR & AssociatesRegistrars: Link Intime India Pvt Ltd

C-13 Pannalal Silk ,Mills Cmpd LBS Marg,Bhandup WestMumbai - 400 078

Number of clients 372000 peoplePhone : 91-22-22864400/4820

Fax : 91-22-22864278

E-mail [email protected]

Web : http://www.edelcap.com
mailto:[email protected]://www.edelcap.com/http://www.edelcap.com/mailto:[email protected]


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Mission: Providing high quality investment management services to a widespectrum of investors.Assessing investors acceptable risk parameters and endeavor to achievetheir financial goals.Adhering to a disciplined investment process to steadily grow our

investors assets.Committed to offering exemplary services to our customers and settingthe highest standards of ethics.

Vision: To be an innovative and universally renowned asset manager providing excellentinvestment solutions, exemplary services and setting the highest ethical standards.


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I. Investment banking

II. Capital markets

III. Asset management

IV. Housing finance

V. Insurance

VI. Commodity

VII. Treasury


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Research DesignTYPE OF DATA:-

Here we have use both the primary data and secondary data

Primary DataSecondary Data

Primary data are those, which are collected for the first time and thus

happen to be original in character.

Secondary data, on the other hand are those, which have already beencollected by someone in the past.


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EXPLORATORY RESEARCH

The major purposes of exploratory studies are the identification of problems, the more precise formulation of problems and the formulationsof new alternative courses of action. The design of exploratory studies is

characterized by a great amount of flexibility and ad-hoc veracity .

DESCRIPTIVE RESEARCH

The research design adopted in this study is DESCRIPTIVE RESEARCH .A descriptive research design is the one which is description of the state of affairs as it exists at present. It includes survey and fact finding enquiriesof different kinds. The researcher has no control over the variables. Weused this research design to find out the investors behaviors towardsinvesting in life insurance product .


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DATA SOURCE:

Primary data is collected from the Respondents directly .Respondents are the main source of getting information.

Secondary data are collected from the Books, magazines, differentreports, publishes, internet etc.

SAMPLING METHOD:

The samples are selected by using Convenience Sampling Method . Inconvenience sampling selection, as the name implies, the sampler chooses the sampling units on the basis of convenience .


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Sample Size 225

Target All people of Ahmedabad City

Location AHMEDABAD

Type of questionnaire Structured

No. of Questions involved 11


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1. Do you have any insurance policy? Yes [ ] No [ ]

Interpretation 1: According to the data maximum no. of people are aware with lifeinsurance policy and have a policy (here 71% people Have Policy). TodayIndians are aware with this investment because it covers risk of the lifeas well as gives better return on maturity .


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2. If you have any insurance policy than what is you purpose for buying it?[ ]Old age saving[ ]Family Needs[ ]Time to time Needs[ ]To Protect ones Family from Unfortunate circumstances


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Interpretation 2:

Most of the people buy insurance policy for to protect ones family fromunfortunate circumstances ,32% respondent to protect the own family fromunfortunate circumstances , 31% respondent for time to time needs becausetoday time is uncertain, 23% respondent take policy for their family needs,and 24% respondent for old age saving.


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3. If you have not taken any insurance policy then tick the reason?

why?[ ] I could not afford[ ] I dont see any benefit with it[ ] I dont understand that how it work [ ] I dont trust insurance companies

[ ] If other, please specify

Interpretation 3:The above questions analysis gives idea about that for what reasons theyare not taken any insurance policy, though this 13% respondent given for

both I could not afford and they dont see any benefits with it, 6%respondent for they dont understand that how it work, 14% respondentfor they dont trust on insurance company and 4% respondent for other reasons .so though this we says that most of the persons do not trustinsurance company.


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4. For whom you have purchased insurance policy? [ ] Self

[ ] Spouse[ ] Children[ ] Parents[ ] Dependent brother and/or sister

Interpretation 4:

In given Data most of the customers take the policy for own self 50% of customer are take the life insurance for own self , 19% of customer are purchased the insurance for spouse, 16% are tale for their children,25%are taken for parents and only 14% of response for the dependent

brother or/and sis ter. So in this data the response are good for purchasing policy for own self


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5. Which investment options do you prefer?

[ ] Fixed Deposit [ ] Insurance[ ] Gold / silver [ ] Equity[ ] Mutual Fund [ ] NSC[ ] PPF [ ]Government / private Bonds[ ] Other


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Interpretation 5: We Take the study of the 225 Sample and out of this most of the customer

prefer the fixed deposit other than the life insurance so the customer are

not much satisfied with the insurance .In other the customer prefer the NSC (National Saving Certificate) and PPF for investing the money.55%of the respondent prefer fixed deposit, 44% of the respondent prefer theinsurance so the most of the respondent prefer the fixed deposit andinsurance.


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6. When you are buying an insurance policy your decision is influenceby?

[ ]Family[ ]Friends[ ]Professional group[ ]Brand and advertisement[ ]Financial Advisor

Interpretation 6:

Insurance is now basic investment for consumers. But this is tradition of India thatwe do not believe on unknown people so when any one buy insurance policy thenhis or her decision is depend on family, friends and on other factors. In the studywe found that 51% of respondents believe on their family to buy insurance policy

but only 27% respondents decision depend on brand and advertisement of the

company. So, a/c to study, we see that family and friends play a big role to buy aninsurance policy


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7. How much money do you wish/afford to invest as insurance Premium? (per

annum) [ ] Less than 10,000 [ ] 11,000 to 20,000[ ]20,001 to 30,000 [ ] 30,001 to 40,000[ ]40,001 to 50,000 [ ]50,001 or above

Interpretation 7:Mostly people invest in insurance on the basis of their saving and accordingto their saving they purchase insurance policies. Here most of the peopleinvest 11000 Rs. to 20,000 Rs. and very less number of people invest huge

amount in insurance only 8% of people invest more than 50,000 ininsurance


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8. If you have any life insurance policy then which kind of plan would you

prefer? [ ]Term Plan [ ]Health insurance[ ] Retirement plan [ ] child Education plan[ ] Money back plan

Interpretation 8:

Most of respondents want mostly Money Back Plan and term plan. 44%respondents use Money back plan and term plan 35% respondents want to buyHealth insurance and retirement plan. People show their interest towards money

back plan because it provides both risk coverage for life and investment opportunityin securities. And 27% of customer want to buy the child education plan .


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9. Select the period listed below as per your preference to pay premium.

[ ] Monthly[ ] Quarterly[ ] Half Yearly[ ] Yearly

Interpretation 9:Insurance companies give a lot of facility to their loyal customers for payment of

premium. Customers also pay the premium in four modes monthly, Quarterly, half yearly and yearly. Here 16 % respondents pay in monthly mode, 18% respondents payQuarterly mode premium, 19% of Respondent pay in half-yearly mode premium and

only 47% of respondent want to pay premium on yearly bases


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10. What kind of return would you like to earn?

Fixed [ ] Flexible [ ]

Interpretation 10. Through this study we found that most of customer want fixed return thanthe flexible 69% of the customer prefer fixed return and 31% of thecustomer want flexible return. From the above question we analyze thatmost customer preference towards the fixed return.


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11. Are you satisfied with the return you are getting from the policy?[ ] Very Satisfied [ ] Satisfied[ ] Cant say [ ] Not much satisfied[ ]Dissatisfied

Interpretation 11:A/c to data, 31 % of respondent are satisfied with the return. About 21% arevery satisfied on their investments return 25% of customers are dont takethe decision about whether they satisfied or not.


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Que 7 & Que Age

Ho: Age is Independent on Insurance Premium Paid by The IndividualH1: Age is dependent On Insurance Premium Paid by The Individual

Interpretation 1: The above table shows us that the probability is 0.000 andon comparing it with Alpha 0.05, it can be seen that the chi-square is < Alfa.So we rejected the Ho.Therefore Age is dependent on insurance premium paid by the individual.

Value D.F Assump.Sign(2sides)

Pearson Chi-Square 68.665 a 27 .000

Likelihood Ratio 69.985 27 .000

N of Valid Cases224


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Que 7 & Que Income Income (monthly) * 7. How much money do you wish/afford to invest asinsurance Premium (per annum Cross tabulation

H0: Income Is Independent on insurance premium pay by the individual.H1: Income Is dependent on insurance premium pay by the individual.

Interpretation 1: The above table shows us that the probability is 0.000 andon comparing it with Alpha 0.05, it can be seen that the chi-square is < Alfa. Sowe rejected the Ho.

Therefore Income Is dependent on insurance premium pay by the individual

Value Df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 97.700 a 27 .000

Likelihood Ratio 94.946 27 .000

N of Valid Cases 224


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Now life insurance has become generic. People believe in Life InsuranceCompany only and therefore, everybody wants to go in for a policy with

LIC. It will take time to private companies to win the confidence of the people.As far as future decision making about the policy is concerned most of the

policy would go in for to protect ones family from unfortunatecircumstances. In this study we found that 32% of the people have insurance

policy to protect ones family from unfortunate circumstances.It has clearly come out that most of the people like to earn the fixed return69% of the respondent like to earn the fixed return.A/c to survey it is cleared that most of the people dont take insurance policy

because they dont trust on insurance companies, 14% of the respondent say

that they do not trust on insurance companies.Most of People influenced by family and financial advisors when they are

buying insurance policies.It has been clearly comes out that the most of the respondent prefer the term

plan and the money back plan 44% of the respondent prefer the term planand money back plan.


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The life insurance companies have to introduce that type of which is more protect the family from unfortunate circumstances

The life insurance companies have to introduce that type of policy which

provides the maximum fixed return to the policy holder.

The life insurance companies should try to win trust of the customer so thatthe customer purchases the life insurance product.

The life insurance companies should introduced the more term plan and themoney back plan which provide more benefit to the investors.


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Although every effort has been in to collect the relevant information through thesources available, still some relevant information could not be gathered.Busy Schedule of Concerned Executives:The concerned executives were having very busy schedule because of which theywere reluctant to give appointment.

Time:The time duration could not provide ample opportunity to study every detail of thecompany.

Unawareness:

Customers were unaware of many terms related to same while asking to them.

Confidential Information:As the company on account of confidential report has not disclosed some figures.

Moreover, in some cases separate accounts of division are not separatelymaintained thereby, leading to restrictions in study.


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At last here we conclude that the life insurance policy is most needed intodays competitive world.

In this study we conclude that the individual have to invest money because future is uncertain and all the persons has to done there financial planning.

The positive impact is most of the people want to buy the life insurance policy and they aware about the insurance.

Though this study we conclude that the individual have to save their money though the life insurance.

Though the overall project report we conclude that investor behavior towards investing in life insurance product is on the basis of old agesaving and to protect ones family from unfortunate circumstances

Though the overall study we found that the most investors prefer thefixed deposit for their savings.


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Books Referred: NARESH K MALHOTRA. (2008), MARKETING RESEARCH ,SOUTH ASIAN PERSPECTIVE: DORLING KINDERSLEY (Page no109 and 110)

Internet Resources : Search Sites , Websites of the organization www.edleweiss.com Other sites www.bimaonline.com, www.irdaindia.gov ,www.edelweissfin.com

Company Resources:

Product BrochuresInputs from company personnels .
http://www.edleweiss.com/http://www.irdaindia.gov/http://www.edelweissfin.com/http://www.edelweissfin.com/http://www.edelweissfin.com/http://www.edelweissfin.com/http://www.edelweissfin.com/http://www.edelweissfin.com/http://www.irdaindia.gov/http://www.irdaindia.gov/http://www.irdaindia.gov/http://www.irdaindia.gov/http://www.irdaindia.gov/http://www.edleweiss.com/http://www.edleweiss.com/http://www.edleweiss.com/http://www.edleweiss.com/http://www.edleweiss.com/


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