A RESEARCH PROJECT ON

“STUDY OF PORTFOLIO MANGEMENT IN INSURANCE COMPANY”

A PROJECT SUBMITTED TO
DR. HOMI BHABHA STATE UNIVERSITY FOR PARTIAL
COMPLETION OF THE DEGREE OF BACHELOR OF BANKING AND
INSURANCE UNDER THE FACULTY OF COMMERCE SUBMITTED BY
LOKESH PARSHURAM SINGH
T.Y.B.B.I. SEM V
ROLL NO.83
UNDER THE GUIDANCE OF
PROF Dr JHARNA KALRA
[MMS, M.COM)]
SYDENHAM COLLEGE OF COMMERCE AND ECONOMICSB-ROAD,
CHURCHGATE MUMBAI-400020
OCTOBER 2023
 Certificate

This is to certify that Mr. LOKESH PARSHURAM SINGH

has worked and duly completed his Project work forth degree of masters in commerce
under the faculty of commerce in the subject of the Project and his is entitled, “STUDY
OF PORTFOLIO MANGEMENT IN INSURANCE COMPANY” Under my
supervision. I further certify that the entire work has been done by the learner Under my
guidance, no part of it has been submitted previously for any Degree or Diploma of any
University. It is his own work and facts reported by his personal findings and
investigations.

Seal of the college Name: Dr Jharna Kalra

Signature:

Date of Submission:
 Declaration by Learner
I the undersigned Mr. LOKESH PARSHURAM SINGH hereby declare that the work
Embodied in this project work titled “STUDY OF PORTFOLIO MANGEMENT IN
INSURANCE COMPANY”
Forms my own contribution to the research work carried out under the guidance of Dr.
Jharna Kalra is a result of my own research work and has not been previously submitted
to any other University for any other Degree/ Diploma to this or any University. Wherever
reference has been made to previous works of others it has been clearly indicated As such
and included in the bibliography. I, hereby further declare that all information of this
document has been obtained and presented In accordance with academic rules andethical
conduct.

Name: Lokesh Parshuram Singh

Signature:
Certified by
Dr. Jharna kalra
Signature
 CERTIFICATE
I Certify that the project entitled “STUDY OF PORTFOLIO MANGEMENT IN
INSURANCE COMPANY”
Submitted to DR. HOMI BHABHA STATE UNIVERSITY of Commerce for (Bachelor
of Banking and Insurance) is the record of independent research work carried out by
LOKESH PARSHURAM SINGH (Roll No. 83) Student of T.Y.B.B.I. SEM-V,
SYDENHAM COLLEGEOF COMMERCE AND ECONOMICS, under my supervision
and guidance. This information submitted is true and original to the best of my
Knowledge.

[External Examiner] [Internal Examiner]

Principle
DR. Shriniwas . S. Dhure
Cource Co- Ordinator
Dr. Jharna Kalra
 Acknowledgment
To list who all have helped me is difficult because they are so numerous and the depth is
so enormous. I would like to acknowledge the following as being idealistic channels and
fresh dimension in the Completion of this project. I take this opportunity to thank the DR.
HOMI BHABHA STATE UNIVERSITY for giving me the chance to do this Project. I
would like to thank my Principle, Dr. Shriniwas S. Dhure for providing the necessary
facilities required for the completion of this project. I take this opportunity to thank our
Coordinator, Dr. Syed Mubashar Hasan for his moral support and guidance. I would also
like to express my sincere gratitude towards my project guide Dr. Jharna Kalra whose
guidance and Care made the project successful .
I would like to thank my College Library, for having provided various reference books
and Magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped me
in the completion of the project especially my Parents and Peers who supported me
throughout my project
1 Introduction 1
1.1 What is portfolio? 6
1.2 What is portfolio management? 7
1.3 Why is portfolio management required? 11
1.4 What are the objectives of portfolio management? 14
1.5 History 16
1.6 Portfolio management Process 19
1.7 Tools & methods of portfolio management 22
1.8 Advantages & Disadvantages 23
1.9 Portfolio management process 24
1.10 Portfolio manager 26
1.11 Characteristics 28
2 Chapter 2 42

Literature review
3 Chapter 3 48

Research methodology
3.1 Meaning of research 49
3.2 Types of research 49
3.3 Research design 51
3.4 Types of data collection 51
3.5 Significance of the project 62

Objective of project 63
3.6
3.7 Scope of study 65
3.8 Limitations of project 66
4 Chapter 4 67
4.1 Conclusion 68
4.2 Findings & suggestions 72
5 Chapter 5 80
5.1 Bibliography 87
5.2 Refrence 91
 CHAPTER 1
INTRODUCTION

Stock exchange operations are peculiar in nature and most of the Investors feel
insecure in managing their investment on the stock market because it is difficult for
an individual to identify companies which have growth prospects for investment.
Further due to volatile nature of the markets, it requires constant reshuffling of
portfolios to capitalize on the growth opportunities.

Even after identifying the growth oriented companies and their securities, the trading
practices are also complicated, making it a difficult task for investors to trade in all
the exchange and follow up on post trading formalities.

Investors choose to hold groups of securities rather than single security that offer the
greater expected returns. They believe that a combination of securities held togethe
r will give a beneficial result if they are grouped in a manner to secure higher return
after taking into consideration the risk element. That is why professional investment
advice through portfolio management service can help the investors to make an
intelligent and informed choice between alternative investments opportunities
without the worry of post trading hassles

This reading provides an overview of portfolio management and the asset

management industry, including types of investors and investment plans and
products. A portfolio approach is important to investors in achieving their financial
objectives. We outline the steps in the portfolio management process in managing a
client’s investment portfolio. We next compare the financial needs of different types
of investors: individual and institutional investors. We then describe both defined
contribution and defined benefit pension plans. The asset management1 industry,
which serves as a critical link between providers and seekers of investment capital
around the world, is broadly discussed. Finally, we describe mutual funds and other
types of pooled investment products offered by asset managers.
Before Going To Know Brief About PM In Insurance Industries, Firstly We
Should Need To Know That The Following...

 What is Portfolio?

 What is Portfolio management?

 Why is portfolio management required?

 What are the objectives of portfolio management ?

 Who should invest in portfolio management services (PMS)?

 Different ways to manage any portfolio

 Portfolio management process

 Tools and methods of portfolio management

 Factors to considers before investing in portfolio management services

 Fig 1: PORTFOLIO MANAGEMENT

What Is A Portfolio?

A portfolio can be defined as different investments tools

namely stocks, shares, mutual funds, bonds, cash all combined together depending
specifically on the investor’s income, budget, risk appetite and the holding period.
It is formed in such a way that it stabilizes the risk of non-performance of different
pools of investments.

What Is Portfolio Management?

 Portfolio Management is defined as the art and science of making decisions about the investment
mix and policy, matching investments to objectives, asset allocation for individuals and
institutions, and balancing risk against performance.

 Simply put it, someone has given you their hard-earned money and you need to help them increase
the capital in the best of diversified ways. This should be in a way in which the risk-return ratio is
aptly maintained considering the profits in mind and the holding period of investments.

 Portfolio management refers to managing an individual’s investments in the form of bonds, shares,
cash, mutual funds etc so that he earns the maximum profits within the stipulated time frame. It is
the art of managing the money of an individual under the expert guidance of portfolio managers.

 It is the detailed SWOT analysis (strengths, weaknesses, opportunities, and threats) of an

investment avenue, which could be in the form of debt/equity, domestic/international, with the goal
of maximizing return at a given appetite for risk.
 Portfolio Management is the process of creating and managing an appropriate portfolio of
investments. It is an art and science of choosing a suitable mix of investments in accordance with
financial goals and risk tolerance of the investor. The term portfolio management is also known as
“Asset management’’ or “Wealth management’’.

 Portfolio management aims at increasing return on investment and maximizing the wealth of
investors through deciding an optimal portfolio. Portfolio simply refers to various investment tools
like shares, bonds, mutual funds, stock, FDs, and cash equivalents in which people invest their
money to generate income.

 Portfolio management serves the purpose of maximum returns at minimum risk within the given
time frame. It performs the SWOT analysis of an investment avenue before including it in the
portfolio. There are different types of portfolio management like active, passive, discretionary, and
non-discretionary portfolio management.

Why is portfolio management required?

The portfolio management process helps you determine the most appropriate investment plan based
on your income, capital, financial goals, age, and risk appetite.

With the right portfolio management services, you can build wealth over the long term. Portfolio
managers offer customized solutions and recommend the most beneficial products based on your
requirements and objectives.

What are the objectives of portfolio management?

The objectives of portfolio management are as follows:

• Creating wealth through capital appreciation
• Protecting your earnings from market volatility
• Maximizing returns on investment (ROI)
• Offering flexibility within your investment portfolio
• Improving the proficiency of your investments
• Allocating available resources optimally
• Optimizing the risk.
• It is aptly put as the customization of the investment needs catered by the portfolio managers as per
the defined requirements.
• Portfolio management helps in providing the best options for investments to individuals as per the
defined criterions of their income, budget, age, holding period and risk taking capacity.

• This is mainly done by the Portfolio managers who understand the investors’ financial needs and
accordingly suggest the investment policy that would have maximum returns with minimum risks
involved. Aptly put, it is risk reduction through diversification.

• This is the method preferred by those who believe in having liquidity in investments so that one
can get the money back when needed.

• Some of the portfolio management schemes are also done for tax saving purposes.

• It helps the investors maintain the purchasing power.

• The portfolio management’s objective is buying or reinvesting of growth securities for capital
growth.
• Portfolio management has the objective of assisting in taking the best possible advantage of good
opportunities.
• Its objective is to minimize the tax burden that proves favourable tax shelter to the investor
• An important objective of portfolio management is offering stable returns
• Portfolio management is designed with the objective of portfolio diversification
• The objective of portfolio management is ensuring flexibility to the investment portfolio
• One of the objectives of portfolio management is the minimization of risk It helps to keep the
investment absolutely safe irrespective of other factors.
 Fig2: Types of portfolio management

TYPES OF PORTFOLIO MANAGEMENT

Discretionary Portfolio Management

The fund manager takes complete discretion in investment decisions for the
customer. The investment manager takes all the buy and sale decision and use them
to make the best out of it. This strategy can be offered by only experts who possess
a great level of knowledge in this field.

 One of the biggest advantages of this type of portfolio management is that they make
our lives in terms of investment decision.

 All the burden and hassle of decision making is transferred to an expert.

 Discretionary Portfolio Management

 Financial advisory

 Investment advise

 Investor requires high knowledge

Discretionary portfolio management

In this form, the individual authorizes the portfolio manager to take care of his financial needs on
his behalf.

A Discretionary portfolio mandate allows you to have a highly dedicated and professional team
oversee the management of your portfolios on a day-to-day basis.

Fig 3:Discretionary portfolio management

 Non-discretionary

 Full freedom

 Required high knowledge

 Easy to handle

 Medium to high returns

 Non-discretionary portfolio management is a type of asset management. Here, the

manager acts as a financial adviser for the individual. The manager states the
advantages and disadvantages of the options. Finally, the individual owns the
discretion.
 The merit of this type of portfolio management is that the manager gives you the
choices and individuals get to choose their decisions

Passive Portfolio Management

• Unstable

• Low cost

• Low risk

• Medium gains

• Long term

• It is the form which involves only tracking the index.

• Passive portfolio management is not concerned about beating the market because the
proponent subscribe to the efficient market hypothesis

• Investors who seek to reduce risk often prefer passive portfolio management.
• Passive strategy is one of the low-cost strategies to execute.

• These strategies provide better gains in the long term

Investors who implement an active management approach use fund managers or brokers to buy and
sell stocks in an attempt to outperform a specific index, such as the Standard & Poor's 500 Index
or the Russell 1000 Index.

An actively managed investment fund has an individual portfolio manager, co-managers, or a team
of managers actively making investment decisions for the fund.

The success of an actively managed fund depends on a combination of in-depth research, market
forecasting, and the expertise of the portfolio manager or management team.

Portfolio managers engaged in active investing pay close attention to market trends, shifts in the
economy, changes to the political landscape, and news that affects companies. This data is used to
time the purchase or sale of investments in an effort to take advantage of irregularities. Active
managers claim that these processes will boost the potential for returns higher than those achieved
by simply mimicking the holdings on a particular index.

Trying to beat the market inevitably involves additional market risk. Indexing eliminates this
particular risk, as there is no possibility of human error in terms of stock selection. Index funds are
also traded less frequently, which means that they incur lower expense ratios and are more tax-
efficient than actively managed funds.

Active Portfolio Management

 Constant

 High Market

 Flexible

 High Risk

 Requires high knowledge


This includes a team of members who take active decisions based on hard core research before investing the
corpus into any investment avenue. (E.G. Close ended funds).

• Active portfolio management needs a greater level of market knowledge. The fund manager who
aims at using an active strategy expects a market return. The active strategy requires a constant
evaluation and quantitative analysis of the market. Furthermore, it requires a clear understanding
of the business cycle.

• Active portfolio management ensures a greater level of market returns

• Active strategies are suitable for investors with great market knowledge and experience. It is suitable for
an investor with a greater risk appetite.
• Another benefit of active portfolio management is that the fund manager has better flexibility.

Passive portfolio management, also referred to as index fund management, aims to duplicate the
return of a particular market index or benchmark. Managers buy the same stocks that are listed on
the index, using the same weighting that they represent in the index.

A passive strategy portfolio can be structured as an exchange-traded fund (ETF), a mutual fund,
or a unit investment trust. Index funds are branded as passively managed because each has a
portfolio manager whose job is to replicate the index rather than select the assets purchased or
sold.

The management fees assessed on passive portfolios or funds are typically far lower than active management
strategies.

How Does Passive Portfolio Management Differ from Active?

Passive management is a set-it-and-forget-it long-term strategy. Often referred to as indexing or
index investing, it aims to duplicate the return of a particular market index or benchmark and may
involve investing in one or more exchange-traded (ETF) index funds. Active management involves
attempting to beat the performance of an index by actively buying and selling individual stocks
and other assets. Closed-end funds are generally actively managed.

What Is Asset Allocation?

Asset allocation involves choosing the proper weights of different asset classes to be held in a portfolio.
Stocks, bonds, and cash are often the three most usual asset classes, but others also

include real estate, commodities, currencies, and crypto. Within each of these there are sub-asset
classes that also play into a portfolio’s allocation. For instance, how much weight should be given
to domestic vs. foreign stocks or bonds? How much to growth stocks vs. value stocks? And so on.

What Is Diversification?
Diversification involves owning assets and asset classes that are not tightly correlated with one
another. This way, if one asset class goes down, the other asset classes might not. This provides a
cushion to your portfolio. Moreover, financial mathematics shows that proper diversification can
increase a portfolio's overall expected return while at the same time reducing its riskines
Understanding the History of the Modern Portfolio.
 The evolution of the modern portfolio from its humble beginnings

When talking about investment portfolios, very few people are confused by the term. An investment
portfolio is a collection of income-producing assets that have been bought to meet a financial goal.
If you went back 50 years in a time machine, however, no one would have the slightest clue what
you were talking about. It is amazing that something as fundamental as an investment portfolio
didn't exist until the late 1960s. The idea of investment portfolios has become so ingrained that we
can't imagine a world without them, but it wasn't always this way.

KEY TAKEAWAYS

An investment portfolio refers to a grouping of financial assets—such as stocks, bonds, commodities,

currencies, and funds—that an investor purchases to produce income and meet financial goals.
What we know as the modern portfolio evolved through the efforts of various economists who
proposed different investment theories.
In 1938, John Burr Williams' book, The Theory of Investment Value, proposed that the value of a
stock should equal the current value of its future dividends.
Harry Markowitz is a Nobel Prize-winning economist who is credited with developing the modern
portfolio theory in 1952.1

Markowitz devised a method to mathematically match an investor's risk tolerance and reward
expectations to create an ideal portfolio that focuses on the diversification of asset classes and
securities

Who should invest in portfolio management services (PMS)?

 The following individuals are recommended to opt for professional investment analysis and
portfolio management services.

• Individuals who do not have the time to regularly monitor their investment portfolios and
make the required modifications.

•
Those who have limited knowledge about the investment markets and do not understand the
influence of market movements on different asset classes.

•
Those who are looking to invest in different asset classes, such as stocks, bonds, commodities,
mutual funds, and others but do not have the required knowledge and expertise.

Different ways to manage any portfolio

Portfolio managers may adopt various ways to manage investment portfolios. Some of these are
as follows:

Asset allocation
Your money is invested in market-related and fixed-income securities to minimize risk while
maximizing ROI. The asset allocation depends on your risk profile and financial objectives.

Diversification

The investment portfolio is diversified across various products and is revamped to achieve the
ideal balance between risk and reward. It can deliver risk-adjusted returns over the long term.

Rebalancing
The investment portfolio is regularly monitored to rebalance the instruments to align with
changing market conditions. It aims to include assets that deliver higher profits at minimal losses.

Portfolio Management Process

• Estimate potential returns and related investment risks
Identify suitable goals, such as capital appreciation or stable ROI
•

• Asset allocation to achieve the optimal risk-reward ratio

 • Determine investment strategies that align with your investment horizon and risk profile

• Conduct extensive research and analyse various financial instruments to make informed
investment decisions

• Regularly monitor and evaluate the portfolio to maximize capital efficiency

• Rebalance the asset allocation to maximize returns

The Portfolio Management process: -

The portfolio management process has four phases.

The first is the inventory phase, which includes the collection of project and organizational data
in order to support the second phase, the evaluation phase.

In the evaluation phase the previously collected data are analysed and reviewed.
 The third phase, the alignment phase, makes it possible to establish metrics and balances of the
portfolio of projects.

The last step, the management phase, means the efficient coordination of the various projects.

Portfolio management process is an ongoing way of managing a client’s portfolio of assets.

There are various components and sub-components of the process that ensure a portfolio is
tailored to meet the client’s investment objectives well within his constraints. Portfolio
managers need to chart out specific strategies for portfolio management to maintain the
risk-return trade-off.

STEPS OF THE PORTFOLIO MANAGEMENT PROCESS

PLANNING:

This is the most crucial step as it lays down the foundation of the entire process. It
comprises of these tasks:
1. Identification of Objectives and Constraints: The identification of client’s investment objectives
and any constraints is the foremost task in the planning stage. Any desired outcomes that the client
has regarding return and risk are the investment objectives. Any limitations on the investment
decisions or choices are the constraints. Both are specified at this stage.
2. Investment Policy Statement: Once the objectives and constraints are identified, the next task is
to draft an investment policy statement.
3. Capital Market Expectations: The third step in the planning stage is to form expectations
regarding capital markets. Risk and return of various asset classes are forecasted over the long term
to choose portfolios that either maximizes the expected return for certain levels of risk or minimize
the portfolio risk for certain levels of expected return.
4. Asset Allocation Strategy: This is the last task in the planning stage.
5. Strategic Asset Allocation: The investment policy statement and the capital market expectations
are combined to determine the long-term weights of the target asset classes, also known as strategic
asset allocation.
6. Tactical Asset Allocation: Any short-term change in the portfolio strategy as a result of the change
in circumstances of the investor or the market expectations is tactical asset allocation. If the changes
become permanent and the policy statement is updated to reflect the changes, there is a chance that
the temporary tactical allocation becomes the new strategic portfolio allocation.
7. Assess the Current Situation: Planning for the future requires having a clear understanding of an
investor’s current situation in relation to where they want to be. That requires a thorough
assessment of current assets, liabilities, cash flow, and investments in light of the investor's most
important goals. Goals need to be clearly defined and quantified so that the assessment can identify
any gaps between the current investment strategy and the stated goals. This step needs to include a
frank discussion about the investor’s values, beliefs, and priorities, all of which set the course for
developing an investment strategy.

8. Step 2: Establish Investment Objectives: Establishing investment objectives centre’s on

identifying the investor’s risk-return profile. Determining how much risk an investor is willing and
able to assume, and how much volatility the investor can withstand, is key to formulating a portfolio
strategy that can deliver the required returns with an acceptable level of risk. Once an acceptable
risk-return profile is developed, benchmarks can be established for tracking the portfolio’s
performance. Tracking the portfolio’s performance against benchmarks allows smaller adjustments
to be made along the way.

9. Step 3: Determine Asset Allocation: Using the risk-return profile, an investor can develop an asset
allocation strategy. Selecting from various asset classes and investment options, the investor can
allocate assets in a way that achieves optimum diversification while targeting the expected returns.
The investor can also assign percentages to various asset classes, including stocks, bonds, cash,
and alternative investments, based on an acceptable range of volatility for the portfolio. The asset
allocation strategy is based on a snapshot of the investor’s current situation and goals and is usually
adjusted as life changes occur. For example, the closer an investor gets to their retirement target
date, the more the allocation may change to reflect less tolerance for volatility and risk.

10. Step 4: Select Investment Options: Individual investments are selected based on the parameters
of the asset allocation strategy. The specific investment type selected depends in large part on the
investor’s preference for active or passive management. An actively managed portfolio might
include individual stocks and bonds if there are sufficient assets to achieve optimum diversification,
which is typically over $1 million in assets. Smaller portfolios can achieve the proper
diversification through professionally managed funds, such as mutual funds or exchangetraded
funds. An investor might construct a passively managed portfolio with index funds selected from
the various asset classes and economic sectors.
11. Step 5: Monitor, Measure, and Rebalance: After implementing a portfolio plan, the management
process begins. This includes monitoring the investments and measuring the portfolio’s
performance relative to the benchmarks. It is necessary to report investment performance at regular
intervals, typically quarterly, and to review the portfolio plan annually. Once a year, the investor’s
situation and goals get a review to determine if there have been any significant changes. The
portfolio review then determines if the allocation is still on target to track the investor’s risk-reward
profile. If it is not, then the portfolio can be rebalanced, selling investments that have reached their
targets, and buying investments that offer greater upside potential.
When investing for lifelong goals, the portfolio planning process never stops. As investors move
through their life stages, changes may occur, such as job changes, births, divorce, deaths, or shrinking
time horizons, which may require adjustments to their goals, risk-reward profiles or asset allocations.
As changes occur, or as market or economic conditions dictate, the portfolio planning process begins
anew, following each of the five steps to ensure that the right investment strategy is in place.

Execution:

Once the planning stage is completed, execution of the planned portfolio is the next step. This
consists of these decisions:

1. Portfolio Selection: The expectation of the capital markets is combined with decided investment
allocation strategy to choose specific assets for the investor’s portfolio. Generally, the portfolio
managers use the portfolio optimization technique while deciding the portfolio composition.
2. Portfolio Implementation: Once the portfolio composition is finalized, the portfolio is executed.
Portfolio executions are equally important as high transaction costs can reduce the performance of
the portfolio. Transaction costs include both explicit costs like taxes, fees, commissions, etc. and
implicit costs like bid-ask spread, opportunity costs, market price impacts, etc. Hence, the
execution of the portfolio needs to be appropriately timed and well-managed.

Feedback:
 Any changes required due to the feedback are analyzed carefully to make sure that they are as per
the long-run considerations. The feedback stage has the following two sub-components:

1. Monitoring and Rebalancing: The portfolio manager needs to monitor and evaluate risk exposures
of the portfolio and compares it with the strategic asset allocation. This is required to ensure that
investment objectives and constraints are being achieved. The manager monitors the investor’s
circumstances, economic fundamentals and market conditions. Portfolio rebalancing should also
consider taxes and transaction costs

1. Performance Evaluation: The investment performance of the portfolio must be evaluated regularly
to measure the achievement of objectives and the skill of the portfolio manager. Both absolute
returns and relative returns can be used as a measure of performance while analysing the
performance of the portfolio.

Tools and methods of portfolio management

Generally, scoring techniques are adopted to arrive at accurate financial decisions to increase ROI
and make strategic decisions for investment project portfolio management. The two common
scoring techniques are as follows:
 Simple Additive Weighting (SAW) Method

It uses regular arithmetic operations like multiplication and addition. The attribute values are
numerical and comparable. Weight Product Method

• The weights are exponents linked to each attribute value. The method assigns positive power for benefit
attributes and negative power for cost attributes.

• The steps to derive scores and weights are as follows:

• Scoring the alternatives to reflect the performance of each option against every attribute

• Identification of applicable non-monetary attributes

• Calculating the weighted scores

• Testing the results for accuracy

• Interpreting the results

• Providing weight to the attributes based on their comparative importance

Factors to consider before investing in PMS

• One of the most important things to consider is understanding what portfolio management is before availing
of such services. Some of the other factors to consider are as follows:

• Such services come at a cost like performance fees, management charges, exit and entry loads, brokerage,
and much more.

• Analyze risks like interest rates, inflation, market, and others.

• To make an informed decision, evaluate the past performance of the portfolio manager to determine how
much returns they have delivered.
• Ensure the chosen service provider offers transparent investment philosophy and decision-making
procedure and gives regular updates on your portfolio.

• Understand the investment strategies adopted by the PMS to ensure it aligns with your financial goals
and requirements.

• Determine the quality of the portfolio manager based on factors like experience, qualifications, and
historical performance.

• Make sure the chosen PMS is registered with the Securities and Exchange Board of India (SEBI).

• Efficiently managing your investment portfolio helps build an ideal asset mix based on your goals,
risk profile, income, investment horizon, and age. With an experienced and expert portfolio
manager, you may reduce the potential risks and maximize returns with customized solutions.

What Are the Benefits of Portfolio Management?

• Minimize Risks to Maximize Business Impact: Risk is inherent in every venture, but PPM can
help identify and mitigate risks before they become issues. A standardized approach to decision
making can also help companies look out for less obvious risks by comparing new potential
projects to similar efforts from the past.

“Although the word ‘risk’ has a strong negative connotation, it is unavoidable at times. Because of
the likelihood, type, and impact of various risks, you must explore options through an effective
risk management plan to keep projects on track,” says Daniel Carter, Debt Advisor at IVA Advice.
He continues, “Risks have financial and program repercussions, and reducing them helps you avoid
underestimating the gross effort required for prospective and ongoing initiatives.”
• Improve Speed of Project Completion: By implementing a standardized approach to
decisionmaking, you reduce the time it takes to prioritize and choose projects and, consequently,
the time it takes to complete them. “We’ve seen about a 15 percent decrease in the average length
of our projects since using a portfolio project management strategy and collaborative PPM
software,” says John Li, CTO on Portfolio Project Management for Fig Loans. “Almost every
piece of our projects goes more quickly, from project choice to strategy planning and execution.
Now that we have information flowing in and out of one integrated source, management and key
players can better tie our project strategy to the actual execution. In a nutshell, with the key players
all having a clear vision of tasks and strategy, we complete more projects on time and within
budget.”
• Allow for Greater Budget Alignment: Create a realistic outline for the costs for all potential
projects, and use these projections to help assess project readiness. “The PPM method can help
identify budget discrepancies between planned and actual activity in real time, which allows you
to minimize financial risks after a project has started,” says Carter. “PPM software can warn you
of non-viable effort overexposure by highlighting possible money overruns, scheduling delays,
and technological flaws. It keeps these risks from manifesting themselves throughout project
delivery, leaving you with higher-value, lower-risk initiatives.”

• Optimize Resource Management: By engaging in project portfolio management, you can

determine all necessary resources you’ll need for potential projects. With this information, you can
decide whether you can take on the project, based on your bandwidth.
• “Competent resource allocation allows your company to make the most of its available resources
and skills by directing them to the most important tasks,” says Daniel Foley, an SEO specialist at
CloudTech24. “For example, resource profiling provides an updated skills inventory, which helps
to ensure that peak demand periods are not affected by a skills shortfall. It assesses the capability
and redistributes skill across several tasks in scientifically calculated proportions. Project demand
can be forecasted to this resource capacity, which allows you to focus your resources on worthy
projects without over- or unburdening them.”

Encourage Collaborative Decision Making: Project portfolio management can help encourage
collaboration between PPM experts, project managers, and program managers when it’s time to
pick projects. Because PPM emphasizes decision making based on data, team members don’t have
to lean on personal preference for their partnerships, which can fortify relationships and trust over
the course of their work together.
• Demonstrate Project Value to Stakeholders: Executives will gain visibility into why teams have
prioritized certain projects over others. “If you present a portfolio of projects rather than just
individual projects, communication may improve by helping bridge the gap between managers on
those projects and the executives who fund them,” says Miles.

• Increase Project Success Rate: By using PPM, you’ll be able to focus on and sequence projects
that deliver maximum success for both the individual project and your organization as a whole. In
turn, this can provide a competitive advantage, since you’ll have a reliable system of selecting
projects that leaves little room for risk, delays, or failed projects. “PPM tends to gain management’s
attention on every stage of project progress, which helps us perform better. Proper project
management reduces the risk of the project failing by carrying out too many tasks simultaneously,”
says Olga Voronkova, Digital Marketing Strategist at KeyUA.
•

Joe Pusz, the Founder and CEO of The PMO Squad, weighs in on the benefits of PPM: “The
benefit of a well-executed PPM strategy is delivering on projects that will provide the most return
on investment for the organization. Far too often, a manager initiates a project because a leader
wants localized improvement within their department, even when the project provides minimal
value to the greater organization.

• “While ROI is a direct benefit of proper PPM, indirect benefits include happy employees and
highperforming teams. Resource utilization is directly impacted by poor PPM choices and
frequently leads to low morale and lack of confidence in leadership. When you assign team
members to too many projects without a proper PPM evaluation, the resource bears the burden of
extra hours, reduced quality, and ultimately, a poor performance evaluation,” he says.

• That said, Zucker explains that the benefits of PPM are neither binary nor automatic. You don’t
simply reap or not reap the benefits; you don’t instantly see results. Instead, realizing the extent
of PPM benefits depends on your organization’s level of discipline, as well as dedication and
continual adaptation to the processes you set in place.

• “The benefits of developing and maturing a PPM process represent a continuum,” Zucker says.
 “At one extreme is chaos; money is spent on projects with no control, alignment, or accountability.
At the other end of the spectrum, there would be an efficient and transparent process. The enterprise
can effectively manage its investments to ensure alignment and maximize its investments. There
would be transparency into the status of projects and programs so that appropriate corrective
actions would be taken if there are problems.”

History of portfolio management

Investing in corporate securities is profitable as well as exciting. One should not forget the element
of risks from investing in individual security. Risk arises when there is a possibility of variation
around expected return from the security. As all securities carry varying degrees of risks, holding
more than one security at a time enables an investor to spread his risks.

The investor hopes that even if one security incurs a loss the rest will provide some protection from

an extreme loss. Thus, portfolios or combination of securities are thought of as a device to spread

risk over many securities. In this context, portfolio is defined as the composite set of ownership

rights to financial assets in which the investor wishes to invest.

In olden days, the traditional portfolio managers diversified funds over securities of large number of
 companies based on intuition. They had no real knowledge of implementing risk reduction.

Since 1950, a body of knowledge has been built up which quantifies the expected risk and also the
riskiness of the portfolio. The portfolio theory has been developed to provide the management a
technique to evaluate the merits and demerits of investment portfolio.

Definition of portfolio management.

Portfolio management can be defined as the process of selecting a bunch of securities that provides
the investing agency a maximum return for a given level of risk or alternatively ensures minimum
risk for a given level of return.

Investment portfolio composing securities that yield a maximum return for given levels of risk or
minimum risk for given levels of returns are termed as “efficient portfolio”.

The investors, through portfolio management, attempt to maximize their expected return consistent
with individually acceptable portfolio risk.

Portfolio management thus refers to investment of funds in such combination of different securities
in which the total risk of portfolio is minimized while expecting maximum return from it.

As returns and prices of all securities do not move exactly together, variability in one security will
be offset by the reverse variability in some other security. Ultimately, the overall risk of the investor
will be less affected.

Steps involved in Portfolio management process.

Portfolio management involves complex process which the following steps to be followed carefully.

1. Identification of objectives and constraints.

2. Selection of the asset mix.
3. Formulation of portfolio strategy
4. Security analysis
5. Portfolio execution
6. Portfolio revision
7. Portfolio evaluation.
 Now each of these steps can be discussed in detail.

1. Identification of objectives and constraints

The primary step in the portfolio management process is to identify the limitations and objectives.
The portfolio management should focus on the objectives and constraints of an investor in first
place. The objective of an Investor may be income with minimum amount of risk, capital
appreciation or for future provisions. The relative importance of these objectives should be clearly
defined.

2. Selection of the asset mix

The next major step in portfolio management process is identifying different assets that can be included in
portfolio in order to spread risk and minimize loss.

In this step, the relationship between securities has to be clearly specified. Portfolio may contain
the mix of Preference shares, equity shares, bonds etc. The percentage of the mix depends upon
the risk tolerance and investment limit of the investor.

3. Formulation of portfolio strategy

After certain asset mix is chosen, the next step in the portfolio management process is formulation
of an appropriate portfolio strategy. There are two choices for the formulation of portfolio strategy,
namely

i. an active portfolio strategy

 a passive portfolio strategy.

An active portfolio strategy attempts to earn a superior risk adjusted return by adopting to market
timing, switching from one sector to another sector according to market condition, security
selection or a combination of all of these.

A passive portfolio strategy on the other hand has a pre-determined level of exposure to risk. The portfolio
is broadly diversified and maintained strictly.

ii.
4. Security analysis
 In this step, an investor actively involves himself in selecting securities.

Security analysis requires the sources of information on the basis of which analysis is made.
Securities for the portfolio are analyzed taking into account of their price, possible return, risks
associated with it etc. As the return on investment is linked to the risk associated with the security,
security analysis helps to understand the nature and extent of risk of a particular security in the
market.

Security analysis involves both micro analysis and macro analysis. For example, analysing one script
is micro analysis. On the other hand, macro analysis is the analysis of market of securities.
Fundamental analysis and technical analysis help to identify the securities that can be included in
portfolio of an investor.

5. Portfolio execution
When selection of securities for investment is complete the execution of portfolio plan takes the next
stage in a portfolio management process. Portfolio execution is related to buying and selling of
specified securities in given amounts. As portfolio execution has a bearing on investment results, it
is considered one of the important steps in portfolio management.

6. Portfolio revision
Portfolio revision is one of the most important steps in portfolio management. A portfolio manager
has to constantly monitor and review scripts according to the market condition. Revision of portfolio
includes adding or removing scripts, shifting from one stock to another or from stocks to bonds and
vice versa.

7. Performance evaluation
Evaluating the performance of portfolio is another important step in portfolio management. Portfolio
manager has to assess the performance of portfolio over a selected period of time. Performance
evaluation includes assessing the relative merits and demerits of portfolio, risk and return criteria,
adherence of the portfolio management to publicly stated investment objectives or some combination
of these factors.

The quantitative measurement of actual return realized and the risk borne by the portfolio over the
period of investment is called for while evaluating risk and return criteria. They are compared against
the objective norms to assess the relative performance of the portfolio.
 Performance evaluation gives a useful feedback to improve the quality of the portfolio management
process on a continuing basis.

Advantages of portfolio management

• Makes Right Investment Choice
Portfolio management is a tool that helps the investor in choosing the right portfolio of assets. It
enables in making more informed decisions regarding investment plans in accordance with the
goals and objectives.

• Maximizes Return
Maximizing the return is one of the important roles played by portfolio investment. It provides a
structured framework for analyses and selecting the best class of assets. Investors are able to earn
high returns with limited funds.

• Avoids Disaster
Portfolio management avoids the disaster of facing huge risks by investors. It guides in investing
among different classes of assets instead of investing only in one type of asset. If an investor invests
in only one type of security and supposes it fails, then the investor will suffer huge losses which
could be avoided if he might have invested among different assets.

• Track Performance
Portfolio management helps management in tracking the performance of their portfolio of
investments. A consolidated investment held within the portfolio can be evaluated in a better way
and any of its failures can be easily detected.

• Manages Liquidity
Portfolio management enables investors in arranging their investment in a systematic manner.
Investors can choose assets in such a pattern where they can sell some of them easily whenever
they need funds.

• Avoids Risk
Investment in securities is quite risky due to the volatility of the security market which increases
the chance of losses. Portfolio management helps in reducing the risk through diversification of
risk among large peoples.
• Improves Financial Understanding
It helps in improving the financial knowledge of investors. While managing their portfolio they
came across numerous financial concepts and learn how a financial market works which will
enhance the overall financial understanding.

Disadvantages of portfolio management in insurance company.

• Risk of Over Diversification
Sometimes portfolio managers invest funds among large categories of assets whose control
becomes impossible. In his efforts to diversify the risk it goes beyond the limit to manage
efficiently. Loss arising in such situations is quite high and can bring serious repercussions.

• No Downside Protection
Portfolio management only reduces the risk through diversification but does not provide full
protection. At times of market crash, the concept of portfolio management becomes obsolete.

• Faulty Forecasting
Portfolio management uses historical data for evaluating the returns of securities for investment
purposes. Sometimes the historical data collected is incorrect or unreliable which leads to wrong
forecasts.
• Inappropriate Allocation of Resources:
 Time and money are two fundamental resources for businesses of any size, and PPM uses both.
“Depending on the size of the business, portfolio project management may be an unnecessary use of
financial and labour resources. If your business includes fewer than five employees or doesn’t deal
with in-depth projects often, you may not need PPM. Only invest if the widened management scope
will help your business grow and increase revenue,” says Li.

• Difficult Decisions:

Prioritization can be very difficult, and sometimes you need to make tough decisions. If your
portfolio management team is unable to make those decisions or is not empowered to do so, it can
lead to decreased efficiency within the organization.

• Removes Project Expertise from Decisions:

The managers on your projects have intimate knowledge of your processes and the projects
themselves, and adopting portfolio management methodology can remove their voice from the

discussion. Standardized decision making, while efficient, ignores the experience of your team
leaders, who might have knowledge of minute technical details that the portfolio manager may be
unaware of.
•
Time Spent on Administrative Tasks:

Properly managing a project portfolio takes a lot of time — not including the actual project
management. A portfolio manager must spend time reviewing current priorities and ensuring that
things are still on track, as well as creating reports, writing emails, and holding meetings. Issues
such as scope creep on a single project can also affect a portfolio manager’s time investment by
necessitating frequent re-evaluation. “Even the smallest project changes can put a strain on budgets
and cause delays,” says Carter.

• Cost:
Everything costs money, from PPM software solutions to human resources. More products, more team
members, and more managers means more monthly fees and salaries paid.
•

Difficulty of Securing Executive Buy-In:

Many factors can lead to a lack of executive buy-in, including a lack of visibility and poor communication. It
can be tough to get leaders on your side, but ultimately, having the support of the executive team will lead to
greater success for your portfolio processes.

Portfolio management services (PMS)

Portfolio Management Services (PMS), service offered by the Portfolio Manager, is an investment
portfolio in stocks, fixed income, debt, cash, structured products and other individual securities,
managed by a professional money manager that can potentially be tailored to meet specific
investment objectives.

Portfolio management service is the science and art of creating investment decisions. Certainly, it
helps to set an objective regarding the investment, allocate assets of an individual and manage risk
against the portfolio performance.

Portfolio management service is one of the widely known investment services. Most of the
stockbroking companies and investment consultancies offer PMS service with minute alterations.
PMS (portfolio management service) is a kind of 360° investment service for the investors. The PMS
 service usually assists investors during each level of investing and ensures robust returns as well.

Needs of PMS:

Portfolio management presents the best investment plan to the individuals as per their income,
budget, age and ability to undertake risks. Portfolio management minimizes the risks involved in
investing and also increases the chance of making profits.

Portfolio management presents the best investment plan to the individuals as per their income,
budget, age and ability to undertake risks.

Portfolio management minimizes the risks involved in investing and also increases the chance of
making profits.

Portfolio managers understand the client’s financial needs and suggest the best and unique
investment policy for them with minimum risks involved.

Portfolio management enables the portfolio managers to provide customized investment solutions
to clients as per their needs and requirements.

As in the current scenario the effectiveness of PMS is required. As the PMS gives

Investment management is the professional management of various securities (shares, Portfolio

(finance) means a collection of investments held by an institution or a privatePortfolio (finance) means
a collection of investments held by an institution
 Fig 4: Portfolio Management

PORTFOLIO MANAGER

A portfolio manager is a person or group of people responsible for investing a mutual, exchange
traded or closed-end fund’s assets, implementing its investment strategy, and managing day-today
portfolio trading. A portfolio manager is one of the most important factors to consider when
looking at fund investing. Portfolio management can be active or passive, and historical
performance records indicate that only a minority of active fund managers consistently beat the
market.1

KEY TAKEAWAYS

• A portfolio manager is a person or group of people responsible for investing a fund’s assets,
implementing the fund’s investment strategies, and managing day-to-day portfolio management.
• Portfolio managers can take an active or passive management role.
• The ability to originate ideas and to employ excellent research skills are just two factors that
influence a portfolio manager’s success.

Fig: 5 Portfolio Manager

Understanding a Portfolio Manager's Role

A portfolio manager holds great influence on a fund, no matter if that fund is a closed or open
mutual fund, hedge fund, venture capital fund or exchange-traded fund. The manager of the fund's
portfolio will directly affect the overall returns of the fund. Portfolio managers are thus usually
experienced investors, brokers, or traders, with strong backgrounds in financial management and
track records of sustained success.

A portfolio manager, regardless of background, is either an active or passive manager. If a manager

takes a passive approach, their investment strategy mirrors a specific market index. Using that
market index as a benchmark is extremely important since an investor should expect to see similar
returns over the long term.

Conversely, a manager can take an active approach to investing, which means that they attempt to
consistently beat average market returns. In this scenario, the portfolio manager themselves is
extremely important, since their investment style directly results in the fund's returns. Potential
investors should look at an active fund's marketing material for more information on the
investment approach.

Characteristics of a Good Portfolio Manager

Regardless of the investment approach, all portfolio managers need to have very specific qualities
in order to be successful. The first is ideation. If the portfolio manager is active, then the ability
to have original investment insight is paramount. With over 7,000 active funds to choose from,
active investors need to be smart about where they look.2 If the manager takes a passive approach,
the originating insight comes in the form of the market index they've decided to mirror. Passive
managers must make smart choices about the index.

Additionally, the way in which a portfolio manager conducts research is very important. Active
managers make a list of thousands of companies and pair it down to a list of a few hundred. The
shortlist is then given to fund analysts to analyze the fundamentals of the potential investments,
after which the portfolio manager assesses the companies and makes an investment decision.
Passive managers also conduct research by looking at the various market indices and choosing
the one best-suited for the fund.

Risk management at the portfolio level--what we can learn from insurance

companies

Abstract:

Organizations often burden each project with bearing not only the cost associated with managing
risks, but also with including in their budget the cost of the potential risk outcomes. If all costs for
all potential risks are included in the project budget, the project will become cost prohibitive. If
statistical analysis is done and probability of occurrence is used to come up with a risk “insurance
policy”, then some of the project in the organizations will be over budget – because they were hit
with more negative impacts than statistically expected, while others will be under budget –
because they were hit with fewer than statistically expected risk event related costs.

What becomes important to the organization is that risks are properly identified and managed, and
that the organization is not taking more project risks that it can bear. The proposal is to make the
risk contingency budget like an insurance policy that is held for all projects at the portfolio level.
 In effect, what the organization wants is that whereas individual projects may come over or under
their risk budget, at the project portfolio level the risk related expenditures are always under or at
budget.

Whereas we are not advocating stopping risk management at the project level, the model proposed
in this paper is one where project risks management is done at the portfolio level using lessons
learned from the insurance company. Both the mitigation strategies and the cost of potential
outcomes are shared by all the projects within the portfolio. Thus, Portfolio management will aid
in selecting the right mix of projects for an organization, and be used to manage the risks
associated with the mix of projects within the portfolio.

Project Portfolio Management Defined

Portfolio management ensures that the collection of projects chosen and completed meets the
goals of the organization.

Project portfolio management has six major responsibilities:

1. Determining a viable project mix, one that is capable of meeting the goals of the organization
2. Balancing the portfolio, to ensure a mix of projects that balances short term vs. long term, risk vs.
reward, research vs. development, etc.
3. Monitoring the planning and execution of the chosen projects
4. Analyzing portfolio performance and ways to improve it
5. Evaluating new opportunities against the current portfolio and comparatively to each other, taking
into account the organization's project execution capacity
6. Providing information and recommendations to decision makers at all levels (Kendall & Rollins,
2003)

Project Portfolio Management and Risk

The idea of having risk management at the portfolio level is not new. How many high-risk projects
does the company want or is capable of sustaining? This factor must be known by the portfolio
manager and taken into account when assessing the portfolio and making recommendations. If the
company's cash flow situation suddenly becomes very poor, the portfolio will need to be balanced
differently. If the company's shareholders expect huge breakthroughs in product development or
new markets, the risk and reward factors in the portfolio need to reflect these expectations.
(Kendall & Rollins, 2003)

Strategic selection of projects MUST include assessment of the overall risk included in the
portfolio. Too much risk in the strategic project portfolio spells a risky organizational strategy as
the company will be betting its future on uncertain outcomes. Too little risk may be a measure of
not enough strategic thinking. The organization might believe that “nothing ventured, nothing
lost” – but often nothing gained. In a competitive business environment not taking any risks often
means being left behind as you see your consumer base being taken away from you by innovative
competitors. However, risk must be commensurate with rewards. A project that contributes with
very high risks and very low return in most cases is not a wise investment.

The difference in the model that is being proposed here is at the portfolio level, the Project
Portfolio Manager / Program Management Office is not only going to have an active role in the
risk identification, but also in the qualitative and quantitative risk analysis, the risk response
planning, and especially, the risk monitoring and control. These roles are not commonly part of
project portfolio management.

Risk Management and Insurance

Risk Management is the process of measuring, or assessing risk and then developing strategies to
manage the risk. In general, the strategies employed include transferring the risk to another party,
avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the
consequences of a particular risk. (Wikipedia)

Insurance, in law and economics, is a form of risk management primarily used to hedge against
the risk of potential financial loss. Insurance is defined as the equitable transfer of the risk of a
potential loss, from one entity to another, in exchange for a premium and duty of care. (Wikipedia)

The objectives of Project Risk Management are to increase the probability and impact of positive
events, and decrease the probability and impact of events adverse to the project. (PMI, 2004)

There are two major segments for the Insurance Industry: Property & Casualty, and Life & Health.
Property & Casualty Insurance covers damage to or loss of policyholders' property and legal
liability for damages caused to other people or their property. Property/casualty insurance includes
auto, homeowners and commercial insurance.5 For this time of insurance, the companies gather
as much information as they can regarding the location where the insured asset resides and has
the actuarial department performing statistical analysis on the information. A large insurance
company in the Northeast has a database containing all of the fault lines, flood planes, etc. for the
United States. When a person wants to insure a property, the database is consulted to see what risk
factors threaten the property.

The risk factors determine whether or not the property is insured, and what the premiums will be.
For auto insurance the companies have statistics about theft and accidents in the area where the
car is going to be housed, as well as information about the drivers to be insured. A car housed in
East Las Vegas will pay additional insurance when compared to the same car if it was housed in
Henderson, 5 miles away. A $75 fine on a moving violation, translates to $150 additional insurance
a year for several years. This is because the insurance company in order to minimize the risk in
their portfolio performs quantitative risk analysis.

Life Insurance is a policy that combines protection against premature death with a savings account
either as cash value or as investments in stocks, bonds, and money market mutual funds. (III, no
date) Death is only one of two certainties in life. So how can insurance companies make money
while providing life insurance? The key once again lies in information, statistical analysis, and
learning from adverse events. When you apply for a life insurance policy, the company finds out
information about the health risk factors such as smoking, dangerous hobbies (e.g., skydiving) or
occupation (e.g., test pilot), life expectancy for your location, etc. In the early 1980's AIDS was
virtually unknown. Individuals diagnosed as HIV positive or with AIDS where able to obtain
insurance policies, which the companies had to pay when the insured died prematurely. Insurance
companies learned from this, and for more than 10 years now insurance companies require for
applicants to take an HIV test before they will insure them.

The policies in the Health Insurance sector provide benefits packages that policyholders pay a
premium to enjoy health care services, and include fixed-fee policies and managed care networks.
In this sector, the insurance companies struggle to keep costs down and make money. As a result
of escalating health care costs, insurance companies increase their health insurance premiums
yearly. This shows that whereas the insurance companies have been unable to control the
escalating costs, they still manage the risk in their portfolio in this line of business.

Insurance companies are profitable. Property and casualty insurers netted $40.5 billion in profits
and increased the industry surplus to more than $400 billion in 2004. Canada's insurance
companies are coming off a record year, with $2.63 billion in profit in 2003, a 673 per cent
increase over the previous year. So they are managing the risk in their portfolio effectively and
there is much that we can learn for project risk management.

Conventional insurance works by pooling the risks of many people or firms, all of whom might
claim but in practice only a few actually do. The cost of providing assistance to those that claim
is spread over all the potential claimants, thus making the insurance affordable to all.5 The basic
tenet of this paper is that for project management, the pooling of risks should be done at the
portfolio level, thus making project risk management affordable for all projects.

The Project Portfolio “Insurance Company” Initiative

When the organization implements the Project Portfolio Insurance Initiative being proposed here,
Project Managers continue to manage the risk at the project level, but Portfolio Managers manage
the risk at the portfolio level. Individual projects assess their risk factors; perform qualitative and
quantitative risk analysis which will help determine the “insurance” premium that they must
contribute to the project portfolio for the portfolio risk management.

Since the risk is being actively managed at a higher level, risk factors and risk assessment are
consistent for all projects. The insurance premiums are collected from individual projects based
on information and statistical analysis rather than on best guesses.

Because the organization actively manages the projects within the portfolio, lessons learned are
collected for all projects, which include risk information, such as risks identified for the project,
risks successfully managed, and identification of successful and unsuccessful risk management
strategies. Moreover, lessons learned information collected and warehoused at the portfolio level.
The portfolio manager or program management office will be responsible for the maintenance and
update of the Lessons Learned Database, which at project initiation all project managers will be
able to consult to help identify potential project risk factors and strategies. Lessons learned
become institutional rather than individual.
In this model, Risk monitoring and risk analysis at the portfolio level. However, statistical analysis
of risks still continues to be performed at the project level, but additional analysis performed at
the portfolio level. This way common risk factors shared by multiple projects can be identified,
and shared strategies can be implemented. This way risk management and response costs can be
reduced.

An important part of this model, the financial management of the pooled funds for risk events is
done at the portfolio level. The goal is to have at the portfolio level sufficient funds to cover the
risk events that do happen without overburdening individual projects. Unlike insurance
companies, the goal is not to make a profit on the insurance premiums, but to collect sufficient
money to cover all the risk adverse impacts that happen to the projects within the portfolio. Most
important, funds associated with risk management, risk response, and risk contingency are not
part of the project P&L.

It is important to remember that having the financial coverage performed at the Portfolio level
does not relieve the Project Manager from managing risks. This is the same as when you take auto
insurance – just because you have insurance, it does not mean that you drive recklessly or you
leave your car unlocked with the keys in the ignition!

The project manager can concentrate on managing the project and its risks, rather than worrying
about whether s/he can improve project profitability by not spending the risk management budget.
Thus, the project budget and project profitability are not separated from the risk management.

Since the project portfolio is aligned with the organization strategic direction, it has the attention
of senior management. Therefore, risk management will get higher executive level of attention.
With more fact based, more focused portfolio risk management; projects in the portfolio will have
a better probability of achieving positive, rather than adverse, outcomes.

Case study of portfolio management in insurance company

The development of a strategic asset allocation (SAA) for long-horizon institutional investors like
university endowments raises special challenges. These include supporting spending policies while
ensuring the long-term sustainability of the endowment and establishing optimal exposure to
illiquid investment strategies in the context of a diversified portfolio.

Large university endowments typically have significant exposure to illiquid asset classes. The
exposure to illiquid asset classes impacts the portfolio’s overall liquidity profile and requires a
comprehensive liquidity management approach to ensure liquidity needs can be met in a timely
fashion. In addition, capital market conditions and asset prices change, resulting in a need to
change asset allocation exposures and/or rebalance the portfolio to maintain a profile close to the
strategic asset allocation.

Derivatives are often used by institutions to manage liquidity needs and implement asset allocation
changes. The cash-efficient nature of derivatives and their high levels of liquidity in many markets
make them suitable tools for portfolio rebalancing, tactical exposure changes, and satisfying
shortterm liquidity needs—all while maintaining desired portfolio exposures.

This case study explores these issues from the perspective of a large university endowment
undertaking a review of its asset allocation and then implementing proposed allocation changes
and a tactical overlay program. Rebalancing needs for the endowment arise as market moves result
in the drift of the endowment’s asset allocation.

The case is divided into two major sections. The first section addresses issues relating to asset
allocation and liquidity management. The case introduces a framework to support management of
liquidity and cash needs in an orderly and timely manner while avoiding disruption to underlying
managers and potentially capturing an illiquidity premium. Such concepts as time-to-cash tables
and liquidity budgets are explored in detail. Aspects relating to rebalancing and maintaining a risk
profile similar to the portfolio’s strategic asset allocation over time are also covered.
 The second section explores the use of derivatives in portfolio construction from a tactical asset
allocation (TAA) overlay and rebalancing perspective. The suitability of futures, total return
swaps, and exchange-traded funds (ETFs) is discussed based on their characteristics, associated
costs, and desired portfolio objectives. The case also presents a cost–benefit analysis of derivatives
and cash markets for implementing rebalancing decisions. Environmental, social, and governance
(ESG) considerations arising in the normal course of investing are also explored.

Learning Outcomes
• The member should be able to:
• discuss tools for managing portfolio liquidity risk;

• discuss capture of the illiquidity premium as an investment objective;

• analyze asset allocation and portfolio construction in relation to liquidity needs and risk and return
requirements and recommend actions to address identified needs;

• analyze actions in asset manager selection with respect to the Code of Ethics and Standards of
Professional Conduct;

• analyze the costs and benefits of derivatives versus cash market techniques for establishing or
modifying asset class or risk exposures;

• demonstrate the use of derivatives overlays in tactical asset allocation and rebalancing.

Summary
The QU endowment case study covers important aspects of institutional portfolio management
involving the illiquidity premium capture, liquidity management, asset allocation, and the use of
derivatives versus the cash market for tactical asset allocation and portfolio rebalancing. In
addition, the case examines potential ethical violations in manager selection that can arise in the
course of business.

From an asset allocation perspective, the case highlights potential risk and rewards associated with
increasing exposure to illiquidity risk through investments like private equity and private real
estate. Although this exposure is expected to generate higher returns and more-efficient portfolios
in the long-run, significant uncertainties are involved both from a modeling and implementation
perspective. Finally, the case highlights social considerations that may arise with investing.

A portfolio approach to investing could be preferable to simply investing in individual securities.

The problem with focusing on individual securities is that this approach may lead to the investor
“putting all her eggs in one basket.”

Portfolios provide important diversification benefits, allowing risk to be reduced without

necessarily affecting or compromising return.

Understanding the needs of your client and preparing an investment policy statement represent the
first steps of the portfolio management process. Those steps are followed by asset allocation,
security analysis, portfolio construction, portfolio monitoring and rebalancing, and performance
measurement and reporting.

Types of investors include individual and institutional investors. Institutional investors include
defined benefit pension plans, endowments and foundations, banks, insurance companies, and
sovereign wealth funds.

The asset management industry is an integral component of the global financial services sector.
Asset managers offer either active management, passive management, or both. Asset managers are
typically categorized as traditional or alternative, although the line between traditional and
alternative has blurred.

Three key trends in the asset management industry include the growth of passive investing, “big
data” in the investment process, and robo-advisers in the wealth management industry.

Investors use different types of investment products in their portfolios. These include mutual funds,
separately managed accounts, exchange-traded funds, hedge funds, and private equity and venture
capital funds.
The performance of the investment from “cradle to grave” is critical for the success of the
company.
 Chapter 2

Literature review
Abstract:
The generation of priority vectors from pairwise comparison matrices is an essential part of the
Analytic Hierarchy Process. Perhaps the most popular approach for deriving the priority weights
is the right eigenvalue method (REV) which was proposed by Saaty. Despite its popularity some
shortcomings of the REV have been reported in literature. Among the alternative approaches one
can find the statistical estimation techniques, methods founded on constrained optimization models
and models based on fuzzy description of decision maker preferences. In this paper new
optimization techniques for deriving priority weights are introduced. In the proposed approach,
the constrained optimization models are based on the same idea which underlies the REV. The
properties of the resulting prioritization techniques are studied via computer simulations. This
study demonstrates that the new methods perform very well in comparison with other popular
techniques known from literature. What is especially important, the new approach provides the
decision maker with a meaningful index that can be used to measure consistency of his/her
judgments. The new index is closely related to the well-known Saaty’s consistency index CI, but
in difference to the latter, it can be applied to both reciprocal as well as nonreciprocal comparison
matrices. Hence the new index can be considered as a natural extension of the CI to all types of
matrices. Some additional advantages resulting from the new approach are discussed and
illustrated by numerical examples.

Highlights:
► New approach for deriving priority weights from comparison matrix (CM) is proposed. ►
Resulting new prioritization methods demonstrate very good performance. ► Related naturally
meaningful index of consistency (IC) is introduced. ► The IC can be treated as natural extension
of Saaty’s CI to all types of the CM. ► Some important modifications in the CM acceptance
approach are proposed.
 Chapter 3
Research Methodology

3.1 MEANING OF RESEARCH:

The word ‘Research’ is derived from the French word ‘Researcher’ meaning to search back.
Broadly research refers to a search for knowledge. Research is an attempt to find answers to
problems both theoretical and practical, through the application of specific methods.

3.2 TYPES OF RESEARCH:

Pure Research:

Often pure research is called ‘theoretical ‘basic’, or ‘fundamental’ research. It is not directly
concerned with solving marketing problems. Primarily it aims at improving academic knowledge
about the subject matter.

Applied Research:

Applied research also called as ‘decisional’ research directly deals with commercial problems.
Applied research may relate to locating reasons for fall in sales or to introduce a new brand product.
Applied research can be of two types problem solving and problem oriented research.

Empirical Research:

Empirical research uses “empirical evidence”. It is a way of gaining knowledge by means of direct
and indirect observation or experience. It derives knowledge from actual experience rather than
from theory or belief.

Scientific and Social Research:

Scientific research is application of scientific method to the investigation of relationship among
neutral phenomenon or to solve a medical or technical problem. This type of research requires
huge capital investment but provides significant results. Social research is conducted by social
scientists following a systematic plan.

Historical Research:

Historical research is objective evaluation and synthesis of evidence and facts helping the
researcher to draw conclusions relating to the past. Historical research is commonly used in both
business research and social research.

Exploratory Research:

Exploratory research is undertaken when not much is known about the problem or how similar
problems were solved in the past. In exploratory research data is collected through observation
and interviews.

Descriptive Research:
Descriptive research is undertaken to describe the characteristics of the variables of interest in
a situation. Descriptive research is of great utility in the study of new subjects and issues.

Causal Research:
Research that involves finding the effect of one thing on another or the effect of one variable on
another is called Causal Research. Causal research establishes cause and effect relationships
between variables.

3.1 RESEARCH DESIGN

MEANING:
After deciding the basic aspects of research project i.e. formulating research problem, objective of
research, data requirement, sample design, etc. and before the commencement of work of research
project, the researcher has to prepare research design.

TYPES OF DATA COLLECTION

PRIMARY DATA-

MEANING:

Primary data constitute first-handed information which is collected for the first time in order to
solve research problem. It is the data collected from primary sources which are original sources.
The researcher himself collects primary data or collects it through trained assistants. Such data are
not collected earlier by anybody for any other purpose. It is fresh data collected for the first time
directly from the respondents.

ADVANTAGES/BENEFITS OF PRIMARY DATA:

Provides first-hand information as primary data are collected directly from the respondents. Data
are collected from the original source and hence primary data provide first-hand information.

Availability of detailed information: Here, researcher gets detailed information with the help of
projective techniques. The researcher uses well drafted questionnaire and well trained staff for the
collection of primary data.

Information is collected directly from the respondents. Cross-questioning is also possible for
verification of information supplied.

● Accurate and reliable data available: The data collected are accurate as it is collected
from primary sources. The researcher checks the accuracy of data during the interviews. The data
collected are reliable as it is collected directly from the primary sources. Latest data are collected
from the respondents and such data are accurate and reliable.

● Availability of specific data: Here, researcher collects data exactly as per the specific
needs of research project. As a result, data collected are specific and facilitate the completion of
research project in time.
 ● Acts as supplement to secondary data: Primary data are superior to secondary data as
such data are collected for the first time and also by using proper method. Such primary data are
reliable and dependable. Conclusions are drawn from the primary data analysis. Primary data are
more specific accurate, reliable and comprehensive. It supports secondary data used in the research
project.

• Additional information from respondents: Interviewers collect additional/supplementary

information from respondents and note such information for the benefit of researcher. An
interviewer can bring flexibility in the data collection work. Additional information can be used
fruitfully by the researcher while drawing conclusions.

● Improves the quality of research work: Primary data provide first hand, reliable and
comprehensive information about the subject of research work. Such data improve the quality of
research work and make the research work result-oriented and useful for solving the business
problem.

● Miscellaneous Advantages:Helps in formulation of hypothesis. Flexibility in data collection. Helps to

overcome resistance of respondents

DISADVANTAGES/LIMITATIONS OF PRIMARY DATA:

• Primary data collection is costly/expensive as lengthy procedure, interviews, questionnaire, etc.

are required to be prepared.
• Primary data collection is time consuming due to huge paper work involved.
• Supervision and control are also required during the process of primary data collection for
reliability of data collected (e.g. respondents).
• The bias of interviewers or other (e.g. respondents) connected with data collection work may be
reflected in the primary data collected. This makes primary data collection defective.
• Poor response from the respondents may bring limitations to primary data collected. Respondent
may be bias and supply inadequate information.
• Primary data collected need further processing (editing, coding, tabulation, etc.) for drawing
conclusions. This processing of primary data is time consuming.
• Primary data collection involves huge paper work.

• Sampling error is possible in primary data collection

SOURCES/METHODS OF PRIMARY DATA COLLECTION:

Data directly collected by a researcher is known as primary data. The methods/sources used for
collecting primary data may be:

Observation Method:

Observation method (observational research) is one extensively used method of primary data
collection. Observation research means gathering of primary data by observing relevant people,
actions and situations. Observation is a process of nothing people, objects and occurrences rather
than directly asking for information.

Experimental Method:

Experimental research is best suited for gathering casual information. It tries to explain cause-
andeffect relationships. Experimentation method is used extensively in scientific research and also
used in marketing research. It has two types of setting:

Field Setting:

Field experiments are conducted at the market place but the purposes are not known to the
participants in the experiment. Field experiments are used rarely due to higher costs and longer
time involved.

Laboratory Setting:

Experimentation is also possible under laboratory setting. The laboratory experimentation method
is accurate but laboratory experiments are more artificial due to controlled conditions.

Interview Method:

Interview method of data collection is used extensively in economic/ business/ market surveys.
Personal/ face to face interview is one popular and extensively used method of primary data
collection for marketing research (MR). The backbone of personal interview is the questionnaire
prepared for specific survey.
Survey Method:

In addition to personal interview, primary data for marketing research is collected through survey
method. The following methods are used extensively under survey method of primary data
collection:

Telephonic Survey Method:

Telephonic survey/ Telephonic interview is one useful method of field investigation and data
collection. It is popular alternative to personal interview. Here, telephone is used as a medium of
communication as there is only vocal interface between the interviewer and respondent.

Mail Survey Method:

Mail survey also called mail interview is one method of data collection through field investigation.
Here, questionnaire is prepared for the collection of specific information required for research
purpose. The questionnaire is sent by post (mail) to potential respondents with a request to
complete the same and return by post to the mailing company research agency. Mail/ post office
is used as a medium for the conduct of survey and hence it is rightly called mail survey

E-mail Survey Method:

Under e-mail (Electronic mail) survey, the researcher sends a questionnaire to a respondent via
email. Sample respondents are selected via e-mail. This kind of survey was started in late 1980s.
Email survey is quick and economical. It is easily acceptable to computer friendly younger
generation.

Internet Survey Method:

Internet survey is quick and also economical. It has high speed and wide coverage. Internet
research can be as representative and effective as other traditional, especially because the internet
population continues to grow.

Social Media Survey Method:

Social media is the collection of online communication channels dedicated to community-based

input, interaction, content-sharing and collaboration. Social media depends on mobile based and
web-based technology.
Media Listening Survey Method:

Media listening is a process of using social media channels to track, gather and store the
information and data individuals, groups, or organisations. The process has become simple with
readily available outlets such as news sites, blogs, social networking sites, message boards, video/
photo sharing sites, wikis, and forums and so on.

SECONDARY DATA:

MEANING:

Along with primary data, secondary data are also useful in marketing research. Such data are
collected by some other agency for some other purpose.

Secondary data are easily and readily available in the published form and are used for the conduct
of research activity.

ADVANTAGES OF SECONDARY DATA:

Secondary data are available easily, quickly and economically. Such data are economical and
reasonably reliable. No paper work is involved in the collection work.

Secondary data can be used directly and naturally there is economy of time in the use of the data.
Processing of secondary data is not necessary as it is available in processed form.

Secondary data are available on all aspects of marketing problem.

It is not possible to complete research project without using available secondary data as secondary
data act as a good supplement of primary data.

Secondary data are also useful for evaluating the research findings.

There is considerable time saving in the collection of secondary data. There are no sampling errors
in secondary data.
Secondary data supplement and support primary data as such data are not collected but are taken
from published data.

Secondary data support the primary data used in research work.

Secondary data are used extensively in exploratory research.

LIMITATIONS OF SECONDARY DATA:

Data available may be out-dated: Secondary data are available in published form after a long
period. Naturally, such data become outdated when used in the research project. There is time gap
between collection and actual use of secondary data. Cautious approach is necessary while using
secondary data in research project. The reliability of secondary data must be checked before use
as there is a problem of accuracy of data.

Data published by small agencies may be defective: Secondary data published by reputed agencies
can be used safely as the data are reliable. However, data published by small agencies may not be
reliable. Too much dependence on secondary data may prove to be dangerous.

Absence of reliability: The deficiencies available in the published secondary data will be carried
forward in the research project taken up for study. Even the bias of the collecting agencies may be
reflected in the research work when such data are used.

May not be relevant: The secondary data available may not be relevant to the subject matter of
research work.

Secondary data may not be sufficient to meet the data needs of the research project. There us a
problem of adequacy in in secondary data.

Miscellaneous Limitations:

Lack of in-depth information in secondary data.

Possibility of biased information available.

Unsuitability of secondary data for specific research project.

May affect the quality of research work.

SOURCES/METHODS OF SECONDARY DATA:

Secondary data are available from two broad sources. These are:

Internal Sources:

Data available from sources within the company are called internal sources of secondary data.
Internal sources of secondary data are old statistical records and correspondence, sales invoices,
sales force reports, accounting data, production statistics, sales information, financial records,
departmental budgets and reports, old research and survey reports, periodical progress reports of
different departments and complaints analysis. Various departments of the company can provide
information in the form periodical statements, reports and statistical data for research purpose. Past
research reports, files, documents and correspondence of the company are also useful for reference
purpose.

External Sources:

Internal sources provide substantial information to the researcher. External sources are used when
internal records are not adequate or do not provide the required information readily. Information
for research purpose is provided by the following external sources:

Trade Journals:

Trade journals are published regularly for the information and guidance of business community.
They collect and publish commercial information regularly. Some journals even conduct surveys
and publish the data collected. Companies can subscribe to suitable journals and use the
information published therein. A researcher can even refer to back issues of known journals for
reference purpose. In India, large number of trade journals are published. They include, “Business
Today”, “Business India” and so on. Even business newspapers (e.g., Economic Times and
Hindustan Times) publish
varied information on industrial, financial and economic matters. Such information can be used
for research purpose.

Directories:
Trade directories are published by different agencies like chambers of commerce and trade
associations. They supply information in a compact form to researchers for different purposes.

Subscription Services:

Some commercial organisations collect and supply information on particular subject/subjects

regularly to its subscribers. Interested companies should pay the subscription fees periodically and
in return they get required information in a compact form which can be used for research purpose.
In addition, advertising agencies and research organisations provide useful information to
researchers. Syndicated sources also provide useful information to secondary data for research
purpose. ORG and IMRB provide useful data for marketing related research.

Publications of Trade Associations and Chambers of Commerce:

These associations collect and supply trade information to their members through journals, special
reports, annual reports, booklets and other publications. Sometimes, surveys and special studies
are conducted and the reports are given wide publicity through such publications. These
associations maintain reference libraries for the benefit of their members and researchers where
Indian as well as foreign journals are made available for reference purpose. In India, export
promotion councils and Commodity Boards also publish data on export trade.

Publication of Bank and Financial Institutions:

Banks, financial institutions and stock exchanges, publish information on financial matters through
their annual reports and other publications. In India, RBI publishes information on all aspects of
Indian economy regularly. Such publications provide reliable statistical information to researchers.

Company Reports:

Public limited companies publish their annual reports and financial statements which contain
information about their activities and also about general economic situation in the country. Such
reports can be used for desk research purpose.

Specialised Libraries:
 In cities like Mumbai and Delhi, specialised libraries are available. They provide whatever
information is required by researchers. Even the libraries of foreign embassies are useful for data
collection on commercial matters.

Government Publications and Publications of International Organisations:

Government departments, public corporations and other government agencies publish information
of varied nature through their publications. Census reports are also published by the government
after every ten years. Such reports provide detailed and valuable information to researchers. Along
with this, international agencies like IMF, WTO, World Bank, UNCTAD, FAO and other agencies
of United Nations publish useful information on trade, finance and other global economic matters.
Such information can be used for desk research. In addition, commodity boards export promotion
councils, etc. regularly publish trade related information which can be used in government research
projects. Industrial statistics are published by government agencies and such data are useful for
research purpose. At present, published information is available easily and also in plenty. In fact,
there is “information flood” all over the world. The real problem is how to select specific
information required and how to use it for research purpose

SIGNIFICANCE OF THE PROJECT:

Insurance benefits society by allowing individuals to share the risks faced by many people. But it also serves
many other important economic and societal functions. Becauseinsurance is available and affordable, banks
can make loans with the assurance that theloan’s collateral (property that can be taken as payment if a loan
goes unpaid) is coveredagainst damage. This increased availability of credit helps people buy homes and
cars.Insurance also provides the capital that communities need to quickly rebuild and recover economically
from natural disasters, such as tornadoes or hurricanes.Insurance itself has become a significant economic
force in most industrializedcountries. Employers buy insurance to cover their employees against work-
relatedinjuries and health problems. Businesses also insure their property, including technologyused in
production, against damage and theft. Because it makes business operations safer,insurance encourages
businesses to make economic transactions, which benefits theeconomies of countries. In addition, millions
of people work for insurance companies andrelated businesses. In 1996 more than 2.4 million people
worked in the insurance industryin the United States and Canada.Insurance as an investment that offers a
lot more interms of returns, risk cover &as also that tax concessions & added bonuses Not all effects of
insurance are positive ones. The possibility of earning insurance payments motivates some people to attempt
to cause damage or losses. Without the possibility of collecting insurance benefits, for instance, no one
would think of arson, thewillful destruction of property by fire, as a potential source of money.

3.2 OBJECTIVES OF THE PROJECT

• Ascertain the profile and characteristics of potential buyers.

• To have an insight into the attitudes and behaviours of customers.

• To find out the differences among perceived service and expected service.
• To produce an executive service report to upgrade service characteristics of life insurance
companies.
• To access the degree of satisfaction of the consumers with their current brandof Insurance
products.

3.4 SCOPE OF THE STUDY:

The study will be able to reveal the preferences, needs, perception of the customers regarding the
life insurance products, It also help the insurance companies to know whether the existing products
are really satisfying the customer needs. The deeper the understanding of consumer’s needs and
perception, the earlier the product is introduced ahead of competitors, the expected contribution
margin will be greater .Hence the study is very important.

Consumer markets and consumer buying behaviour can be understood before sound product and
marketing plans are developed .Apart from creating, manufacturing and distribution capabilities
for life insurance products, an in depth study of the consumers, their preferences and demand for
their product is very necessary for setting up an efficient marketing network
 Study of portfolio management in insurance company.

3.5 LIMITATION OF THE PROJECT:

● Time constraint will be the first factor affecting this project.

● The project undertaken needs a lot of secondary data so the availability and precision of this data
forms a major limitation as the biasness as to be minimized.

● There was a shortage of time and resources for the functioning of operation.

● Lack of depth information.

● Many times confusion in information takes place while making the project.

● For understanding project needs a lot of secondary data so the availability and accuracy of this data
forms a major limitation.
 Study of portfolio management in insurance company.

CHAPTER 4

DATA ANALYIS & INTERPRETATION

Data analysis is the process of inspecting, cleaning, transforming, and modelling data with the goal
of discovering useful information, drawing conclusions, and supporting decision-making. It plays a
pivotal role in various fields, from business and science to healthcare and social sciences

The first step in data analysis is data collection. This involves gathering data from various sources,
which can be structured (e.g., databases, spreadsheets) or unstructured (e.g., text documents, social
media posts). Data can also be historical or real-time, depending on the context. Once data is
collected, it must be organized for analysis.

Data cleaning is the next critical step. This process involves identifying and rectifying errors,
inconsistencies, and missing values. Clean data is essential for accurate analysis. Data preprocessing
also includes data transformation, where data is converted into a suitable format and dimensionality
reduction, which simplifies the dataset by removing irrelevant features.

Exploratory Data Analysis (EDA) follows data preprocessing. EDA involves visually and statistically
summarizing the data to gain insights. Common EDA techniques include histograms, scatter plots,
and summary statistics. EDA can uncover patterns, trends, and potential outliers.

The heart of data analysis is statistical analysis. This involves using various statistical techniques to
draw inferences from the data. Descriptive statistics summarize data, while inferential statistics make
predictions and test hypotheses. Common methods include regression analysis, hypothesis testing,
and analysis of variance.

Machine learning and predictive modeling are crucial in modern data analysis. Machine learning
algorithms can automatically discover patterns and make predictions. Classification and clustering
are common tasks, and techniques like decision trees, neural networks, and support vector machines
are widely used.

Data visualization is another essential aspect. Effective visualization techniques, such as bar charts,
heatmaps, and line graphs, help communicate findings to a broader audience. Data visualization
makes complex data more accessible and aids decision-makers in understanding the insights.
 Study of portfolio management in insurance company.

Data analysis often leads to insights and actionable recommendations. Businesses can use data
analysis to optimize processes, understand customer behavior, and make data-driven decisions. In
healthcare, data analysis can help identify disease trends and treatment effectiveness. Researchers
rely on data analysis to draw conclusions from experiments and surveys

Ethical considerations are paramount in data analysis. Privacy concerns and data security should be
addressed. Ensuring the responsible use of data is crucial, as misuse can have significant
consequences

In summary, data analysis is a multifaceted process encompassing data collection, cleaning,

exploration, statistical analysis, machine learning, visualization, and decision-making. It empowers
organizations and individuals to extract valuable insights from data, enabling better-informed
decisions and actions. The significance of data analysis continues to grow in today's data-driven
world, making it an essential skill in various domains.

INTERPRETATION

Interpretation is a fundamental cognitive process that plays a crucial role in our daily
lives, guiding our understanding of the world and shaping our interactions with it. It
encompasses a wide range of activities, from decoding language and symbols to
making sense of events and experiences. This multi-faceted concept can be explored
from various angles, including linguistic interpretation, cultural interpretation, and the
interpretation of events and information.

Linguistic interpretation, one of the most common forms, involves the comprehension
of spoken or written language. When we read a book, listen to a conversation, or watch
a movie, we interpret the words and expressions to extract meaning. This process relies
on our knowledge of grammar, vocabulary, and context. We often interpret ambiguous
statements or metaphors, using our cognitive abilities to decipher intended messages.
For example, a simple phrase like "time flies" may be interpreted as an expression for
the fleeting nature of time rather than the literal flight of time.
 Study of portfolio management in insurance company.

Figure 4.1

GENDER RESPONSES(IN%)
MALE 75%
FEMALE 25%

Out of 28 responses received, 75% are male and 25% are female responses
 Study of portfolio management in insurance company.

AGE GROUP RESPONSES

20 OR BELOW 20 96.4%

21-30 3.6%

31-40

41-50

Out of 28 responses received,96.4%,are 18 or below 18 and 3.6% are 21-30.In this we can see that
the maximum number of responses are received from group of 20 or below 20.
 Study of portfolio management in insurance company.

MARTIAL STATUS RESPONSES

SINGLE 92.9%
MARRIED 7.1%

Out of 28 responses received, 92.9% responses are from unmarried and 7.1% responses are from
married.In this we can see the maximum number of responses are from unmarried.
 Study of portfolio management in insurance company.

PROFESSION RESPONSES

STUDENT 75%

SELF EMPLOYED 25%

BUSINESS

Out of 28 responses received,75% are from student and 25% are from self employed. In this we can
see the maximum number of responses are from students.
 Study of portfolio management in insurance company.

How often do you review and adjust your Responses

insurance portfolio?

Monthly 21.4%

Quarterly 14.3%

Annually 3.6%

Rarely 14.3%

Never 46.4%

Out of 28 responses received,21.4% are monthly,14.3% are quarterly ,3.6% are annually ,14.3% are
rarely and 46.4 %.
 Study of portfolio management in insurance company.

Are you satisfied with the performance of your Responses

insurance company’s portfolio management
strategies?

Very satisfied 25.9%

neutral 59.3%

Not satisfied 14.8%

Out of 27 responses received,25.9% are satisfied , 59.3% are neutral and 14.8% are not satisfied.
 Study of portfolio management in insurance company.

Have you used any specific portfolio Responses

management software or tools in your insurance
work?

Yes 50%

No 50%

Out of 28 responses received ,50% are yes and 50% are no.
 Study of portfolio management in insurance company.

Do you believe that diversification is a key Responses

element in portfolio management for insurance
companies?

Agree 60.7%

Disagree 39.3%

Out of 28 responses received, 60.7% are agree and 39.3% are disagree.
 Study of portfolio management in insurance company.

How satisfied are you with the current portfolio Responses

management strategies of your insurance
company?

Not satisfied 22.2%

satisfied 51.9%

neutral 25.9%

Out of 27 responses received, 22.2% are not satisfied, 51.9% are satisfied and 25.9% are neutral.
 Study of portfolio management in insurance company.

How confident are you in your insurance Responses

company’s ability to adapt to changing market
conditions?

Not confident 15.4%

confident 69.2%

neutral 15.4%

Out of 26 responses received, 15.4% are not confident, 69.2% are confident and 15.4% are neutral.
 Study of portfolio management in insurance company.

In your opinion what is the most important Responses

factor in selecting investments for an insurance
company’s portfolio?

Return on investment 7.1%

Risk management 25%

liquidity 50%

diversification 17.9%

Out of 28 responses received 7.1% are return on investment, 25% are risk management, 50% are
liquidity and 17.9% are diversification.
 Study of portfolio management in insurance company.

Would you be interested in further training or Responses

education on portfolio management in
insurance?

Yes 67.9%

No 32.1%

Out of 28 responses received, 67.9% are yes and 32.1% are no.