SUMMER INTERNSHIP PROJECT REPORT ON

OPTIMISING INVESTMENT STRATEGIES FOR INSURANCE

COMPANIES

SUBMIITED BY
Vishakha Surendra Khengle
Roll no 20231006

FACULTY GUIDE
Dr. Sumana Chaudhuri

INDUSTRY MENTOR
Mr Zeal Chheda

Aditya Birla Capital (Life and Health Insurance)

10th May to 10th July
 ACKNOWLEDGEMENT

It is my proud privilege and duty to acknowledge the kind of help and guidance
received from several people in the preparation of this report. I am sincerely
grateful to them for sharing their truthful and views in a number of issues
related to the study.

I am thankful to Dr. C. Babu, Director, Durgadevi Saraf Institute of

Management Studies, for having taken interest in all the activities related to
my studies.

My sincere thanks to Zeal Chheda, Sr. Agency Partner Aditya Birla Life
Insurance for his valuable suggestions and guidance throughout the period of
this report.

I would like to express my special thanks to my faculty mentor Sumana

Chaudhari for their guidance and valuable suggestion, which helped me in
completing the project work on time.

Vishakha Surendra Khengle

 List of Table
Sr. No Title Page Page No
1 Executive Summary
2 Introduction
3
4
5
6
7
8
9
 Executive Summary

Insurance companies to optimize their investment approaches,

balancing risk and return while meeting regulatory requirements and
policyholders obligations. It mainly focuses on insurance firm that
either maximizes the utility of surplus, minimizes the probability of
ruin, or takes decisions within a mean-variance framework.
 Chapter – 1
Overview of Industry
1.1 WHAT IS INSURANCE ?

Insurance is a contract between an individual or business with an

insurance company to help provide financial protection and mitigate
the risks associated with certain situations or events. It help you and
your family from financial loss due to unexpected event, like
accident, illness, natural disaster, or other unexpected
circumstances. In the case of medical, dental or vision insurance, it
can also help keep you or your family healthy by offsetting – the cost
of routine care. The insurance contract itself is called a policy. The
policy outlines who or what will be covered under the contract, the
circumstances for which payments will be issued by the insurance
company, who will receive the payment, and how much they will
receive.

1.2 HISTORY OF INSURANCE

In 1818 Advent Life insurance business in India with the
establishment of the Oriental Life Insurance Company in Calcutta. In
1829, the Madras Equitable had begun transacting life insurance
business in Madras Presidency.

In 1912, The Indian Life Assurance Companies Act of 1912 was the
first statutory entity to regulate the life insurance business in the
country.

In 1928, The Indian Insurance Companies Act was enacted to enable

the government to collect statistical information about both life and
non-life insurance business transacted in India by Indian and foreign
insurers including provident insurance societies.

In 1938, with a view to protecting the interest of the insurance

public, the earlier legislation was consolidated and amended by the
insurance act, 1938 with comprehensive provisions for effective
control over the activities of insurers.

In 1950, 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.

In 1956, Life Insurance Corporation came into existence. 245 Indian

and foreign insurers and provident fund societies were taken by
central government and were nationalised.

In 1999, On the recommendation of the Malhotra committee report,

the Insurance Regulatory and Development Authority (IRDA) was
constituted as an autonomous body to regulate and develop the
insurance industry.
1.3 What is Life Insurance policy?

 Life Insurance Policy

Life insurance in a commonwealth of nations is a contract between

an insurance policy holder and an insurer or assurer, where the
insurer promises to pay a designated beneficiary a sum of money
upon the death of an insured person (often the policyholder).
Depending on the contract, other events such as terminal illness or
critical illness can also trigger payment. The policy holder typically
pays a premium, either regularly or as one lump sum. The benefits
may include other expenses, such as funeral expenses. Life policies
are legal contracts and the terms of each contract describe the
limitations of the insured events. Often, specific exclusions written
into the contract limit the liability of the insure, common examples
include claims relating to suicide, fraud, war, riot, and civil
commotion. Difficulties may arise where an event is not clearly
defined, For example, the insured knowingly incurred a risk by
consenting to an experimental medical procedure or taking
medication resulting in injury or death.
1.4 Types of Life insurance

1. Term Life Insurance:-

Term Life Insurance guarantees payment of a
stated death benefit to the insured’s beneficiaries if the insured
person dies during the specified term.
Example:- A 30-year old can get a term plan with s cover of Rs 1
crore for a 30-year term by paying a premium.

2. Whole Life Insurance:-

A Whole life insurance is the simplest form of
permanent life insurance, named because it provides coverage that
lasts your entire life as long as premium are paid.
Example:- If 25 years old takes a whole life plan at the age of 25
years, he will receive a lump sum payment at the age of 45.

3. Endowment Policy:-
An insurance policy that provides life coverage,
but that pays a sum of money if the policyholder is still alive after an
agreed period of time.
Example:- A Life insurance contract designed to pay a lump sum after
a specific term (on its “maturity”) or on death.

4. Money Back Policy:-

It’s a type of life insurance product that allows the
insured to receive regular returns, or as a lump-sum amount at a
defined point during the policy period.
Example:- Buys or Borrows Treasury bills from commercial banks, the
central bank will add cash to the accounts called reserves.

5. ULIP(Unit Linked Insurance Plans):-

ULIP is a life insurance policy that offers you security of
a life insurance and potential of investments returns.
Example:- If you start investing Rs. 100,000 a year in ULIP, your
available life cover in the policy will be Rs. 10 lakhs.

6. Children’s Policy:-
It’s a financial products offered by insurance companies. They are
designed to provide financial security of your child’s future, typically
focusing on education.
Example:-

7. Retirement Plans:-
It’s a plan designed to take care of your post-retirement days and
help you lead a stress-free life.
Example:- Employee Provident Fund (EPF), New Pension
Scheme(NPS), Public Provident Fund (PPF).
  Non-Life Insurance

1. Car Insurance:-
This protects you financially if your car is damaged
in an accident, stolen.
Example:- You accidently hit a mailbox while parking. Car insurance
covers the repairs to your car and the mailbox.

2. Bike Insurance:-
It is similar to car, but specifically for motorbikes. It
cover theft, damage caused by accidents.
Example:- Your motorbike is stolen from a parking lot. Bike insurance
reimburses you for the value of the bike.

3. Fire Insurance:-
Fire Insurance is a contract of insurance against the
loss/damage by accidental fire or other occurrences customarily
included under a fire policy.
Example:- If you have fire insurance worth ₹50,000 and your
property suffers loss of ₹80,000, then the insurance company will
only offer you ₹50,000 as compensation.

4. Home Insurance:-
Protects your home from financial losses due to fire,
theft, natural disaster.
Example:- A lighting strikes causes fire in your house. Home
insurance covers the cost of repairs your home.

5. Travel Insurance:-
Provides coverage for unexpected events during
travel, including: Medical emergencies, lost luggage.
Example:- You get sick during your vacation and require
hospitalization. Travel insurance covers your medical expenses.

6. Marine Insurance:-
Cover ships, cargo, and offshore structure against
perils like sinking, storms, piracy, and collsions.
Example:- A cargo ships carries furniture encounters a storm and
some containers are damaged. Marine insurance reimburse the
owner of the furniture for the lost items.

7. Commercial Insurance:-
Protects businesses from financial losses due to
various risks, such as: Property damage, Liability claims.
Example:- A customer slips and falls in a grocery store, injuring
themselves. They covers the legal costs and any compensation
awarded to the customer.

8. Indemnity Insurance:-
The insured for losses they are legally obligated to
pay to a third party. Its common profession for doctors and lawyers.
Example:- A doctor is sued for malpractices by his patient. Indemnity
insurance covers the doctors legal fees and compensation.
1.5 List of Life Insurance Companies:-
As of January 2024, IRDAI has recognized 26 Life Insurance
Companies

List is arranged chronologically based on their recognition by IRDAI

Sr Company Sector Headquarter Founded
1. Life insurance corporation of Govt. Mumbai 1956
India
2. HDFC Life Insurance Co. Ltd. Private Mumbai 2000
3. Max Life Insurance Co. Ltd. Private Delhi 2000
4. ICICI Prudential Life Private Mumbai 2000
Insurance Co. Ltd.
5. Kotak Mahindra Life Private Mumbai 2001
insurance Co. Ltd.
6. Aditya Birla Sun Life Private Mumbai 2000
Insurance co. ltd
7. TATA AIA Life insurance Co. Private Mumbai 2001
Ltd.
8. SBI Life insurance Co. Ltd. Public Mumbai 2001
9. Bajaj Allianz Life insurance Private Pune 2001
Co. Ltd.
10. PNB MetLife India Insurance Private Mumbai 2001
Co. Ltd.
11. Reliance Nippon Life Private Mumbai 2001
Insurance Company.
12. Aviva Life Insurance Private Gurugram 2002
Company India Ltd.
13. Sahara India Life insurance Private Lucknow 2004
Co. Ltd.
14. Shriram Life insurance Co. Private Hyderabad 2005
Ltd.
15. Bharati AXA Life insurance Private Mumbai 2008
Co. Ltd.
16. Future Generali India Life Private Mumbai 2007
insurance Co. Ltd.
17. Ageas Federal India Life Private Mumbai 2008
insurance Co. Ltd.
18. Canara HSBC Life insurance Private Gurugram 2008
Co. Ltd.
19. Bandhan Life insurance Co. Private Mumbai 2008
Ltd.
20. Premerica Life insurance Co. Private Mumbai 2008
Ltd.
21. Star Union Dai-Ichi Life Private Mumbai 2008
insurance Co. Ltd.
22. India First Life insurance Co. Private Mumbai 2009
Ltd.
23. Edelweiss Tokio Life Private Mumbai 2011
insurance Co. Ltd.
24. Credit Access Life insurance Private Bengaluru 2023
Co. Ltd.
25. Acko Life insurance Co. Ltd. Private Bengaluru 2023
26. Go Digital Life insurance Co. Private Pune 2023
Ltd.
 CHAPTER-2
COMPANY PROFILE

Aditya Birla Group:-

 The group’s growth was accelerated during the First World War
when the demand for jute sacks increased rapidly.
 During this period, the Birla family’s wealth increased from Rs.
20 lakh to Rs. 80 lakh.
 In 1919, the Birla became the first Indian Entrepreneurs to own
a jute mill, Birla Jute.
 In the next few years, they acquire several cotton mills and
started several sugar mills.
 In 1924, GD Birla Co-founded the newspaper Hindustan Times,
which he fully acquired in 1933.
 In 1942, he started Hindustan motors. After India’s
independence in 1947, he founded Grasim And Hindalco
Among other companies.
 The Aditya Birla Group is one of India’s Leading conglomerate
and has played a significant role in the country’s economic
development.The Group is known for its entrepreneurial spirit
and its commitment to social responsibility.
Aditya Birla Capital

Aditya Birla Capital Limited (“ABCL”) is the holding company for the
financial services businesses of the Aditya Birla Group. Through its
subsidiaries JVs. ABCL provides a comprehensive suite of financial
solutions across Loans, Investments, Insurance, and Payments to
serve the diverse needs of customers across their lifescycle. Powered
by about 47000 employees, the businesses of ABCL have a
nationwide reach with over 1,474 branches and more than 2,00,000
agents/ channel partners along with several bank partners.
Aditya Birla Sun Life Insurance

Aditya Birla Sun Life Insurance Company Limited (“ABSLI”)is a part of

Aditya Birla Capital Limited (“ABCL”). ABSLI was incorporated on
August 4th, 2000 and commenced operations on January 17th, 2001.

ABSLI is a 51:49 a joint venture between the Aditya Birla Group and
Sun Life Financial Inc., an international financial services organization
in Canada. ABSLI offers a range of products across the customer’s life
cycle, including children future plans, wealth protection plans,
traditional term plans and Unit Linked Insurance Plans (“ULIP”).

As of Mar 31st, 2024, total AUM of ABSLI stood at Rs 86,161 Crore

(23% increase YOY). ABSLI recorded a gross premium income of Rs.
17,260 crore in FY24 and registering a y-o-y growth of 15% in Gross
Premium with Individual Business,

FYP with Single Premium at 10% at Rs. 3,074 Crore. ABSLI has a
nationwide distribution presence through 360+ branches, 11
bancassurance partnrs, 6 distribution channels, over 6000+ direct
selling agents, other Corporate Agents and Brokers through its
website. The company has over 22,000 employees and 19.88 lakh
active customers.

Board Of Directors Of Aditya Birla Sun Life Insurance:

1. Kumar Mangalam Birla – Chairman

2. Vishakha Mulya – Non-Executive Director
3. Pinky Atul Mehta - Non-Executive Director
4. Krishna Kishore Maheshwari - Non-Executive Director
5. Sandeep Asthana - Non-Executive Director
6. Manjit Singh - Non-Executive Director
7. Ingrid Johnson - Non-Executive Director
8. Debabrate Sarakar – Independent Director
 Chapter 3.
Scope And Objective Of Project

Scope of project:-

1. Balancing the proportion of equities, bonds, cash, real estate,

and other asset classes to align with the insurer’s risk tolerance,
liability profile, and investment.
2. Selecting an investment approach (e.g., growth, value, income)
that aligns insurer’s risk profile and return expectations.
3. Investing in Insurance reduce the risks of idle money and
enhance risks.
4. Building a diversified portfolio of securities that collectively
meet the insurer’s investment objectives.
5. Comparing the insurer’s investment performance to industry
peers and relevant benchmarks.

Objectives of Project:-

1. Generate sufficient investment income in insurance cover

policyholder claims, operating expenses, and provide
competitive dividends or surplus.
2. Protect the insurer’s financial health by effectively managing
investment risks (market, credit, liquidity, operational) to
prevent insolvency.
3. Protect the company’s solvency and ensure that it can
withstand adverse market conditions.
4. Ensure that sufficient liquid assets are available to meet short
term liabilities.
5. Improve the company’s return to equity and overall financial
strength.
 Chapter 4

Review of Literatue
 Research Methodology

Research Methodology is divided in Two groups:-

1. Research Design
2. Sample Design

1. Research Design:-
Research design stands for advance planning
of methods to be adopted for collecting the relevant data and
the techniques to be used in their analysis keeping in the view
the objectives of research and the availability of time and
money. Research design in fact has a great bearing on reliability
of results arrived at.

The Research study carried out is descriptive and diagnostic in

nature. Descriptive research includes surveys and fact finding
and enquires of different kinds. The major purpose of these
types of research is description of states of affairs as if exists at
present. The main characteristics of this method is that the
researcher has no control over the variable; he can only report
what has happened or what is happening.

In this research we seek to measures items like:

 Preference of people among various investment options

and insurance policies
 Awareness of insurance among general public.
 Behaviour pattern of investors.

2. Sample Design:
 After research design is made, next step is to
design a sample and the sample will made after considering the
objectives of research and budgetary constraints.

Data Collection

In our research we are using secondary data and in that we used

various sources for collection of published and unpublished data with
the help of fact sheets of various companies, information broucher,
web sites.
 Data Analysis

Analysis of data means studying the tabulated material in order to

determine inherent facts or meaning. It involves breaking down of
complex factors into simple parts and putting the parts together in
new arrangements for the purpose of interpretation. It is a careful,
logical and critical examination of the result obtained after analysis,
keeping in view of the limitations of the sample chosen and tools
used for analysis.

1. No of Life Policy Holder

Table No: 1.1

Opinion Numbers
People with Insurance 80
People without insurance 20
Total 100
 People with insurance
People without insurance

Interpretation:
Majority of the respondents have insured their life to avoid the risk
of future. Out of 13% have adopted the life insurance as a tax saving
tool. It is noted that 22% of the respondents are not insured their
life, due to lack if awareness.

2. Insurance Provider

Name Of Policy Number Percentage

SBI 1 1.06
LIC 50 53.19
HDFC 15 15.95
JEEVAN REKSHA 2 2.12
IDBI FEDERAL 2 2.12
ICICI 6 6.38
AVIVA 12 12.76
TECH MAHINDRA 2 2.12
TATA 2 2.12
BAJAJ 1 1.06
STAR HEALTH 1 1.06
TOTAL 94 100

SBI
LIC
HDFC
JEEVAN REKSHA
IDBI FEDERAL
ICICI
AVIVA
TECH MAHINDRA
TATA
BAJAJ
STAR HEALTH

Interpretation:
According to the analysis, most of the policy holder preferred LIC,
because of treat worthiness and the awareness. LIC private sector
provider are very high as compared to other because other company
have less number of policy holder and market experience is low. So
the awareness about their products in the market is also very less.

3. Number of insurance policy opted

Opinion Numbers
One 78
Multiple 16(among the 78)
 One
Multiple

Interpretation:
Most of the respondent’s expectation is to avoid risk for future in
life. So we choose the opted insurance policy, more than 20% were
opted multiple insurance policy and they have more attracted tax
savings.

4. Time period of holding the policy

Policy Period Numbers Percentage

1-5 Year 46 58.97
6-10 Year 22 28.20
11-15 Year 6 7.69
16-20 Year 4 5.13
Total 78 100
 Numbers
50
45
40
35
30 Numbers
25
20
15
10
5
0
1-5 Year 6-10 Year 11-15 Year 16-20 Year

Interpretation:
The time period of holding an insurance policy has been increasing.
People prefer to have policies for a short term period. Where as only
5.13% of people have policy for long term period.

5. Amount Insured

Amount Numbers Percentage

1-5 Lakh 56 71.79
6-10 Lakh 16 20.51
11-15 Lakh 5 6.41
16-20 Lakh 0 0
21-25 Lakh 1 1.28
Total 78 100
 Numbers
60

50

40
Numbers
30

20

10

0
1-5 Lakh 6-10 Lakh 11-15 Lakh 16-20 Lakh 21-25 Lakh

Interpretation:
More number of insurance policy holder have invested 1-5 lakh
rupees in insurance. Which is almost 71.79% these people have
selected low amount of insurance due to the benefits and also they
do not prefer invest large amount in Insurance premium.

6. More Benefit Obtained From Insurance Policy

Opinion Numbers Percentage

Yes 37 47.43
No 41 52.56
Total 78 100
 Numbers
42

41

40

39 Numbers

38

37

36

35
Yes No

Interpretation:
Only 47.43% of people have obtained additional benefits from
insurance policy, while 52.56% of them have not obtained any
benefits. Because lack of awareness of the insurance policy and other
benefits.

7. Importance of Choosing Life Insurance Policy.

OPINION NUMBERS PERCENTAGE

Sum Assured 11 14.10
Scheme are good 6 7.69
Recommendation from 21 26.92
family and friends
Save Tax 10 12.82
Multi-Benefits 30 38.46
Total 78 100
 80
60
40
20
0
d s ax ts l
ed oo nd efi ta
sur g rf ie veT n To NUMBERS
As re Sa Be
ea an
d ti-
Su
m
em ly ul
h i M
Sc fa
m
m
fro
on
d ati
en
m
m
co
Re

Interpretation:
The insurance policy holder have been choosing insurance policy due
to multiple benefits. Which constitute about 38.46% which 14.10% of
insurance holders prefer to have it because the sum assured or
return of the insurance.

8. Results and opinion after investing in insurance

OPINION NUMBERS PERCENTAGE

Good 44 56.41
Average 34 43.58
Poor 0 0
Total 78 100
 45
40
35
30
25
Series1
20
15
10
5
0
Good Average Poor

Interpretation:
43.58% of them have an average opinion after investing in insurance.
The general public are to made more aware of the benefits of
investing in insurance.

9. Is there policy holder Aware of the income tax act 1961 while
opting the life insurance policy.

Opinion Numbers
Yes 50
No 28
Total 78
 Numbers

50
45
40
35 Numbers
30
25
20
15
10
5
0
Yes No

Interpretation:
1. 50 individuals are aware about the income tax act, 1961 while
opting the life insurance policy where as 28 respondents of the
study are unware of the act.
Key Findings
 Chapter 5

Conclusion And Recommendation

1. Insurance playing good roll in our human being. Previously

insurance was not popular.
2. But day by day insurance tenacity is becoming growing in
human mind.
3. Human think that insurance is not help for economy of life it
also help secure & safe of life.
4. The optimization of investment strategies is paramount for
insurance companies to ensure financial stability, maximize
returns, and meet long-term obligations.
5. By carefully considering factors such as liability structure, risk
tolerance, regulatory environment, and market conditions,
insurance can construct diversified portfolios that balance risk
and reward.
6. A dynamic and adaptive approach, incorporating advanced
analytics and technology, is essential to navigate the complex
and evolving investment landscape.
7. By leveraging data-driven insights and robust risk management
frameworks, insurers can identify new opportunities, mitigate
potential losses, and enhance overall performance.
Reference