ICICI Prudential life insurance company is a joint venture between icici bank, a
premier financial powerhouse and prudential plc, a leading international financial services
group headquartered in the United Kingdom. ICICI Prudential was amongst the first private
sector insurance companies to begin operations in December 2000 after receiving approval
ICICI Prudential’s equity base stands at rs.6.75 billion with ICICI bank and
Prudential plc holding 74% and 26% stake respectively. In the year ended march 31, 2004,
the company had issued over 430,000 policies, for a total sum assured of over Rs. 8,000
crore and premium income in excess of Rs. 980 crore. The company has a network of about
30,000 advisors: as well as 12 bancassurance tie-ups. Today the company is the #1 private
ICICI Prudential was the first life insurer in India to receive a national insurer
financial strength rating of AAA (Ind) from fitch ratings. For three years in a row, ICICI
Prudential has been voted as India’s most trusted private life insurer, by the economic times -
ac Nielsen Org Marg survey of 'most trusted brands'. As we grow our distribution, product
range and customer base, we continue to tirelessly uphold our commitment to deliver world-
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ABOUT ICICI
ICICI bank is India’s second largest bank with an asset base of Rs. 106812 crore.
ICICI bank provides a broad spectrum of financial services to individuals and companies.
This includes mortgages, car and personal. Loans credit and debit cards, corporate and
agricultural finance. The bank services a growing customer base of more than 7 million
network. This includes about 450 branches and extension counters, 1675 ATMs, call centres
and internet banking. ICICI bank posted a net profit of Rs. 1206 crore for the year ended
march 31, 2003. Icici bank is the only Indian company to be rated above the country rating
by the international rating agency Moody’s and the only Indian company to be awarded an
investment grade international credit rating. The bank enjoys the highest AAA (or
ABOUT PRUDENTIAL
company in the UK, with around us 4250 billion funds under management, and more than 16
financial services products that now includes life assurance, pensions, mutual funds,
banking, investment management and general insurance. In Asia, prudential is UK's largest
life insurance company with a vast network of 22 life and mutual fund operations in 12
countries-China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines,
Singapore, Taiwan, Thailand and Vietnam. Since 1923, Prudential has championed
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customer-centric products and services, supported by over 60,000 staff and agents across the
region.
The ICICI Prudential edge comes from our commitment to our customers, in all that
1. Our products have been developed after a clear and thorough understanding of
customers' needs. It is this research that helps us develop Education plans that offer the ideal
way to truly guarantee your child's education, Retirement solutions that are a hedge against
inflation and yet promise a fixed income after you retire, or Health insurance that arms you
with the funds you might need to recover from a dreaded disease.
2. Having the right products is the first step, but it's equally important to ensure that
our customers can access them easily and quickly. To this end, ICICI Prudential has an
advisor base across the length and breadth of the country, and also partners with leading
3. Robust risk management and underwriting practices form the core of our business.
With clear guidelines in place, we ensure equitable costing of risks, and thereby ensure a
4. Entrusted with helping our customers meet their long-term goals, we adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term.
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5. Last but definitely not the least, our 20,000 plus strong team is given the
opportunity to learn and grow, every day in a multitude of ways. We believe this keeps them
engaged and enthusiastic, so that they can deliver on our promise to cover you, at every step
in life.
PARTNERS
ICICI and Prudential came together in 1993 to form Prudential ICICI Asset
Management Company, which has today emerged as one of the leading mutual funds in
India. The two companies bring together two of the strongest financial service brands in Asia,
known for their professionalism, excellent quality of service and long term commitment.
Riding on the success of this relationship, the two companies joined hands once more in
2000, to form ICICI Prudential Life Insurance Company Limited. ICICI bank has 74% stake
1. VISION
To Be The Dominant Life And Pensions Player Built On Trust By World Class
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2. Leveraging Technology to Service Customers Quickly, Efficiently and
Conveniently.
4. Providing and Enabling Environment to Foster Growth and Learning for their
employees
2. MISSION
“To set the standard in helping our customers manage their financial future.”
3. VALUES
The success of the company will be founded in its unflinching commitment to 5 core
values. Each of these values describes what the company stands for, the qualities of
their people and the way they work. They are as follows:-
INTEGRITY
CUSTOMER FIRST
BOUNDARYLESS
OWNERSHIP
PASSION
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MANAGEMENT PROFILE
Board of Directors
The ICICI Prudential life insurance company limited board comprises reputed people
Mr. Marknorbom
Mr. R. Narayanan
Management Team
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Mr. Shridhar Sethuram, Chief- Sales & Marketing
DISTRIBUTION
ICICI Prudential Has One Of The Largest Distribution Networks Amongst Private
Life Insurers In India, Having Commenced Operations In 58 Cities And Towns In India.
These Are:
DISTRIBUTION CHANNELS
Till Date Insurance Agents Still Remain The Main Source Through Which Insurance
Products Are Sold. The Concept Is Very Well Established In The Country Like India But
Still The Increasing Use Of Other Sources Is Imperative. It Therefore Makes Sense To
Channel And Presence. New Players May Find It Expensive And Time Consuming
Tied Agency
Corporate Agents
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Brokers And Cooperative Societies
Bancassurance
Very Alert And Skillful To Know How To Use These Channels In A Proper Way.
BANCASSURANCE
India has an extensive bank network established over the years. What insurance
companies have to do is to just take advantage of the customers' long-standing trust and
relationships with banks. This is a mutually beneficial situation as banks can also expand
their range of products on offer to customers, while the insurance company will also earn
profits from the exposure. Another advantage is that banks, with their network in rural
areas, help to fulfill rural and social obligations stipulated by the insurance regulatory and
tool for increasing their market penetration in India. It is also good for the one who sees
bancassurance in terms of reduced price, high quality product and delivery at doorsteps.
important impact on the financial services industry at large. This is though a new concept
but it has gained a lot of importance in the industry at present and has a great future.
channel is relatively new in India but has already taken roots. This article dwells on ICICI
bank's experiences in bancassurance across its various channels and segments. Icici bank is
the second largest commercial bank in India with a customer base of over five million retail
customers and five million bondholders and a deposit base of well over Rs.one lakh crores.
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The bank is today the single largest distributor for ICICI Prudential Life Insurance Company
(ICICI Pru life) and is arguably the most successful bancassurance channel in India. Twenty
From bancassurance, a major share of which comes from ICICI bank. The bank was
one of the pioneers to launch bancassurance as early as 2001.the decision to offer insurance
to the bank's customers was a quick one. The universal banking concept supported the idea
of creating an optional structure for the retail business and allowed the full range of asset and
liability products to be offered to all its retail customers. With the bank co-promoting ICICI
Prudential Life Insurance Company (ICICI Pru Life), the selling of its products was taken up.
The bank has a large geographical reach with presence in over 230 cities across the country.
Even though this is a vast market, ICICI Pru life was unable to provide operational support in
so many cities right away. Hence, it was decided to start with the top cities and slowly expand
to other cities.
After two years of operation, the bank today offers insurance at 25 major cities of the
country. While starting bancassurance, ICICI bank considered various sales one of the
options was to take a corporate agency license and hire an independent sales force to sell
insurance. It was not easy to get a corporate agency at that point of time. However. It was
certain that the bank would take the insurance distribution business seriously and be the clear
industry leader. It was decided to start with a referral model and then move to become a full-
fledged insurance distribution house over a period of time. Under the referral model, the bank
would refer its customers to ICICI Pru life who would employ an exclusive sales force to
be deployed at its branches. The bank staff would give referrals to the ICICI Pru life
employees who would follow up and close the deals. After two years, the referral model
has been a success. Cross-sales to the branch walk-in customers, salary account customers
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and private banking customers are effectively taking place. Here's a review of each of these
BRANCH
The branch channel has been the backbone of bancassurance for ICICI bank. The
insurance product was completely new for the entire front desk staff of the bank. A lot of
ground work had to be put in to make the branch staff aware of insurance. Training sessions
were planned for the branches after banking hours and during holidays. The best part of this
training was that the branch staff showed a lot of interest in learning about insurance and
various insurance products. This had a positive impact on sales. Motivation of the branch
staff is also important to ensure that quality referrals are continuously generated for insurance
sales. Insurance referrals are a part of the branch manager's targets and credit for insurance
ATM
Other channels, which service the branch customers, are the ATM network. Call
centre and the website on the internet. ICICI bank has the largest ATM network in the country
with over 1,700 ATMs. A number of customers do not visit the branch at all, they use /only
the ATMs. These are the particularly serve higher income group customers. I am
personally very bullish on the ATM channel and its strengths. The quality of leads from this
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INTERNET
The internet has proved to be one of the most potent and low-cost sales channels
all over the world. However, insurance distribution is yet to take off from this channel in
India. I am of the opinion that the sales through this channel can be enhanced, especially
when customers are already using the bank's website for their banking needs. The internet
can be used to offer value added services like product information, customer profiling,
suitable product recommendation and finally, purchase of the policy itself. Post-sale policy
servicing can also be done through the internet itself. The bank intends to significantly
enhance its internet capabilities in insurance distribution business as it views a great potential
in the internet for acquiring and servicing the customers. Call centre ICICI bank has got
some of the largest in-house call centre in the country. The call centre is an expensive but
effective channel which can generate quality insurance leads. The call centre customer
service officers (CSOS) interact with a number of customers each day. At the end of the
insurance training sessions. The csos started generating referrals for the insurance. This is
an expensive mode of getting referrals, but the leads generated are of good quality and
BROKERS:
There is also the system of brokers who canvass business and place the same with
insurers, on terms that are standard or even negotiated. Negotiation of terms will be
necessary, if the needs of the proposer are unique and not met by the benefits under the
standard plans of insurance. A broker usually does business for mare than one insurance
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company. He collects commission from the insurer with whom the business is placed and does
not change the prospect. In India however till the beginning of the year 2002, the system of
brokers were not permitted. The IRDA has powers to review the law in this matter. It has
since issued regulations regarding the operations of brokers. Brokers have to obtain licenses
from the government in order to be able to procure business and receive commission therefore.
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ORGANIZATIONAL STRUCTURE OF ICICI
PRUDENTIAL LIFE INSURANCE CO. LTD. LUCKNOW
UNIT MANAGER
TIED AGENGY
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CAREER PROGRESSION AND FUTURE OPPORTUNITIES
SALES
PARTNER MANAGER
SENIOR ASSISTANT
AGENCY SALES
MANAGER MANAGER
AGENCY MANAGER
ADVISOR
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ACHIEVEMENTS
ICICI Prudential is the largest private player in the insurance industry in India,
with 34.3% market share among pvt. Life insurance and 5.6% of total market
share
They have collected new business premium income: Rs.. 1700 crores,
ICICI Prudential is the first life insurance company to offer ecs debit Facility
In the year 2000 ICICI bank was awarded the best bank award by global finance
media inc and in the year 2004 ICICI bank is awarded as a company of the year,
Mr. K.V. Kamath is honored as businessman of the year by Economic Times this
year.
ICICI bank is now the parent company for: ICICI Venture CICI Ltd., ICICI
Securities, ICICI Prudential life insurance companies ICICI Web Trade, ICICI
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PRODUCTS
parents, children and loved ones need not be compromised. Insurance planning equips you to
smooth out the uncertainties and adversity that life might send your way, so that the best that
life as to offer, secure in the knowledge that your beloved ones are well provided for.
ICICI PRU offers a complete range of insurance products for customer preferences.
1. Protection Plans
2. Saving Plans
3. Child Plans
4. Investment Plans
5. Retirement Plans
6. Group Plans
7. Rural Plans
9. Keyman Plans
10. Riders
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PROTECTION PLANS
Life Guard
pure protection plans. Choose from amongst three different product structures to
insure your l i f e and provide total security to your family, at a very affordable
cost.
You can also enhance the above two policies by adding Accident
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No survival or maturity benefits
SAVING PLANS
benefits of protection and the opportunity to save for im portant assets or events,
Guarantee# with the added advantage of flexible liquidity option. An ideal plan
Assured), based
term of
the plan.
2. At the end of the term, the higher of the value of units or the
guaranteed
3. Facility to make withdrawals from the 6th policy year onwards t i l l the
end of the policy term. Every year withdraw up to 10% of the value
of units.
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4. Additional credits payable as a percentage of the initial annual
facility.
10. The guaranteed value of the unit fund is the value of all
facility is available once if the premium paying term is less than 15 years and
You can also enhance your policy by adding Accident & Disability
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Invest Shield Life:
requirement.
the plan.
At the end of the term, the higher of the value of units or the guaranteed
value* is paid. On death, Sum Assured along with the higher of value of
facility.
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F a c i l i t y of Automatic Premium Payment- With this facility you can take a
declared upfront.
available once if the premium paying term is less than 15 years and twice, if it
is 15 years or more.
# The capital guarantee is applicable only on the invested premium and the
You can also enhance your policy by adding Accident & Disability Benefit
Guaranteed which offers you the benefit of a limited premium payment term.
An ideal plan for protection with wealth creation that offers the flexibility
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maturity term of 10, 15 or 20 years respectively.
At the end of the term (maturity), the higher of the value of units or the
guaranteed value* is paid. On death, Sum Assured along with the higher
Facility to make withdrawals from the 6th policy year onwards t i l l the end
facility.
declared upfront.
The guaranteed value of the unit fund is the value of all invested
interests.
# The capital guarantee is applicable only on the invested premium and the
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Premier Life
Presenting Premier Life - The Preferred plan for the Preferred Customer.
contribution.
Choose from among four funds, based on your investment objective and r i s k
appetite.
policy year).
You can also enhance your policy by adding Critical Illness Rider ,
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L i f e T i mL ief e t i m e l l
Presenting LifeTime & LifeTime II - unit -linked plans that meets your
in life.
Protection:
Two levels of Sum Assured to choose from (available only with LifeTime
II).
Savings:
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(available only with LifeTime I I) .
Facility to top-up your investment any time you have surplus funds.
Investment:
Choose from among four funds, based on your investment objective and
r i s k appetite.
p o l i c y year).
You can also enhance your policy by adding Critical Illness Rider .
Accident Benefit Rider (available only with Life Time) and Waiver of Premium
Secure plus:
An insurance plan that gives added protection, savings and multiple options,
a l l in one!
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sum assured) for the same amount of total annual contribution.
require.
Cash Plus:
require.
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your policy, after the first 5 policy years.
Save’n’Protect:
basis while
Extended Life Cover: An extended cover for 5 years after the maturity
Maturity Benefit: At the end of the term, the policyholder receives the
full sum assured, the guaranteed additions and the vested bonuses.
Death Benefit: The beneficiary receives the sum assured, the guaranteed
additions and the vested bonuses incase the life assured were to meet
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You can a l s o enhance your policy by adding Critical I l l n e s s
CHILD PLANS
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Sm a r t K i d Ed u c at i on Pl an : A s a r e s p o n s i b l e p a r e n t , y o u w i l l
basket of 4 plans:
premium
premium II
graduation.
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Sum Assured is paid immediately: Ensures that your loved ones
secure your child’s educational career and also ensures hi s or her all-
All Smart Kid plans can be enhanced with the Accident & Disability Benefit
Rider and Income Benefit Rider . You can a l s o an Accident Benefit Rider to a Smart
Kid Regular Premium policy, and a Waiver of Premium Rider (WOP ) to Smart Kid
INVESTMENT PLAN
Li f e Li nk I I i s a u ni qu e pl an t ha t c om bi ne s t he s ec ur it y of a l i f e
in s u r a n c e p ol ic y w i th t he o pp or tu ni ty of en jo yi ng hi gh r et ur ns on yo u r
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in v e s t me nt s , without the market risks compromising on the protection of
your family!
Death Benefit: The Sum Assured under the product has 2 options,
event of an unfortunate death, the beneficiary will receive higher of the value
you can switch between the various fund options, absolutely free, 4 times a year.
RETIREMENT PLANS
Retirement Solutions:
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2. How much s h o u l d I se t aside for retirem ent?
5. About Annuities
For too many people, the joy of retirement after years of hard work is
l i f e t i m e . R e t i r e m e n t p la nn in g of fe rs a w ay t o e ns ur e a m or e e nj oy ab le ,
expectancy, higher inflation and increasing taxes do not eat away into your
money into additional avenues like pension plans. How much you need to
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IMPACT OF INFLATION:
the time you retire, your money will be worth a lot less than what it is
today. So, its important to factor this in when you invest for your golden
years.
In order to
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the expected rate of inflation to your planned annuity income. The procedure
is as follows :
First estimate how much annual income you will need to live the life
Second, multiply this amount by one plus the annual rate of inflation. For
e x p e c t e d a n n u a l r a t e o f i n f l a t i o n i s 5 % : Rs.200,000 x (1 + 0.05) =
210,000 You will actually need Rs.210,000 to cover your expenses after a
Repeat the calculation, using your new total, for every year
you plan to wait before drawing on your savings at retirement. The results may
surprise you. For example, the effects of 10 years of inflation means you will need
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"Retirement, that's 20 years from now. Why should I think about it now?"
I s n ' t that the standard answer that we all give when asked about retirement planning.
However, to b u i l d a healthy
2 5 t o 3 4 y e a r s a n d Situation B is when you save the same annual amount from the
age of 35 to 59 years. As can be seen in the example, even after investing your
money for a 2 . 5 times longer duration, the maturity value in the second case is
much lesser (the figures are based on a hypothetical interest rate of 10%). The longer
your money is allowed to grow at a compounded rate, the more dramatic will the
difference be eventually.
InvestShieid Pension:
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F l e x i b i l i t y to choose a level of protection (Sum Assured), based on a
m u l t i p l e of the annual premium and term. Zero Sum Assured can a l s o be chosen. You
At the end of the term, the higher of the value of units or the guaranteed value*
along with the higher of value of u n i t s or the guarantee value is used to purchase
are paid along with the death benefit or at vesting (Retirement date).
(Retirement date).
facility.
declared upfront.
interests.
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** With Automatic Premium Payment facility, you can avail a temporary break
from premium payment for a maximum of 1 year. This facility is available once if
the premium paying term is less than 15 years and twice, if it is 15 years or more.
# The capital guarantee is applicable only on the invested premium and the
You can also enhance your policy by adding Accident & D i s a b i l i t y Benefit
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GROUP SOLUTIONS
come.
offer
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ICIC1 Pru's flexible group term solution h e l p s provide affordable
employees between the ages of 18 and 65 years. The benefit under the
g r o up and outgoing members can leave the group at any point during
Highlights include:
medical requirements.
in
service), the sum assured will be paid to the beneficiary of the employee.
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Group Gratuity Plan:
structure schemes that can provide benefits beyond the statutory obligations.
Highlights include:
diverse financial goals. We offer 4 investment options (short-term debt, debt and
liability.
Low explicit charge structure with the conditions for exit specified
upfront.
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Complete end to end solution in the legal and regulatory approval
Employee Benefits :
10(10)
of business.
ICICI P r u ' s Superannuation Scheme (for both Defined Benefit and Defined
corpus at retirement.
42
Highlights include:
meet the
debt,
where
over
option.
investment option
specified upfront.
43
approval process for scheme set up or transfer
RURAL PLANS
ICICI Pru Life Rural Products are designed to meet the needs of
2. Life Cover
3. Savings Option
Regular Premiums
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ICICI Pru Suraksha - Regular Premium:
features:
Individual policy
NRI Plans:
Being away from India doesn't mean you have to compromise the safety
and security of your loved ones. In fact, your savings from your time overseas
can be easily chanalized to meet your family's needs - now and in the future. So,
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KEYMAN INSURANCE PLA NS
profitability and the continuity of a business and whose absence may have
with money so that the financial losses to the company can be protected, in
absence of the keyman. The aim is to indemnify the company of these losses
All premiums paid for securing a key man life insurance policy are
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RIDERS
ICICI Prudential gives you the freedom to form your very own
comprehensive insurance policy by adding the rider benefits to the basic life
This rider provides protection against 9 critical illnesses, namely: Major organ
replacement surgery, Major surgery of the aorta, CAGS (Bypass) and Cancer.
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Benefits paid on contracting the illness:
Accelerated benefits (available with Save n' Protect and Cash Back):
then the policyholder is paid the entire sum assured under the rider.
The policy along with a l l the riders (to the extent of the Rider Sum
and
the
terminated.
However, the policy value accumulation continues till the end of the
II, Forever Life, Group Term Plan, Invest Shield Life, Invest
Shield
Cash and Invest Shield Gold): If the policyholder is diagnosed with any
of the specified illnesses, he/she is paid the rider Sum Assured and the
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rider terminates. However, the base policy continues t i l l maturity.
Section 80D.
sum assured.
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o P remiums paid under t h i s rider are e l i g i b l e for tax benefits
disabled then the premium for the basic plan is completely waived off to
Plus, 10% of the rider sum assured is paid for the next 10 years, which
helps in providing that extra money and takes care of sudden financial
Accident & Disability Benefit rider is available with Save n' Protect, Cash
back, Smart Kid Child Plans, Premier Life, LifeTime, LifeTime I I , LifeTime
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Pension I I, Forever Life, Secure Plus, Cash Plus, Secure Plus Pension, LifeGuard
ROP
Cash, Invest Shield Gold and Invest Shield Pension. In case of Lifetime I I ,
Lifetime Pension I I , Secure Plus, Cash Plus, LifeGuard ROP and LifeGuard
regular premium, Forever Life, Secure Plus, Cash Plus and Secure Plus Pension.
Premiums paid under this rider are eligible for tax benefits under Section
In case of death of the life assured during; the term of the policy, 1 0 % of
the r id er sum ass ured is paid annually to the beneficiary, on each policy
Income Benefit rider is available with Smart Kid Child Plans, Secure Plus
51
Premiums paid under this rider are eligible for tax benefits under Section
88.
premiums for both the base policy and rider(s) will be waived t i l l the end of
Lif eG uard WR OP, Smart Kid U nit-linked regular premium 11, Lifetime I I ,
LifeTime Pension II, Secure Plus Pension, Invest Shield Life, Invest Shield
Premiums paid under this rider are eligible for tax benefits under
Section 88.
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53
WHAT IS INSURANCE
to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of
the risk of a loss, from one entity to another, in exchange for a premium. Insurer, in
economics, is the company that sells the insurance. Insurance rate is a factor used to
determine the amount, called the premium, to be charged for a certain amount of insurance
coverage. Risk management, the practice of appraising and controlling risk, has evolved as a
Insurance, legal contract that protects people from the financial costs that
result from the loss of life, loss of health, lawsuits or property damage. Insurance provides a
means for individuals and societies to cope with some of the risks faced in everyday life.
organizations.
For instance, laws in most states require people who own a car to buy insurance before
driving it on public roads. Lenders require anyone who finances the purchase of a home or
car with borrowed money to insure that property. Business partners take out life insurance on
each other to make sure the business will succeed even if one of the partners dies.
assets. Every asset has a value the asset would have been created through the efforts of the
owner. The asset is valuable to the owner, because he expects to get some benefits from it.
54
The benefits may be an income or something else. It is a benefit because it meets some of his
needs. In the case of a factory or a cow, the product generated by is sold and income is
generated. In the case of the motor car, it provides comfort and convenience in transportation.
Every asset is expected to last for a certain period of time during which it will
perform. After that, the benefit may not be available. There is a life - time for a machine in a
factory or a cow or a motor car. None of them will last for ever. The owner is aware of this
and he can so manage his affairs that by the end of that period or life – time, a substitutes is
made available. Thus, he makes sure that the value or income is not lost. However, the asset
may get lost earlier. An accident or some other unfortunate event may destroy it or make it
non – functional. In that case, the owner and those deriving benefits there from, would be
deprived of the benefit and the planned substitute would not have been ready. There is an
adverse or unpleasant situation. Insurance is a mechanism that helps to reduce the effect of
Life insurance companies, which sell life insurance, annuities and pensions
products.
55
BRIEF HISTORY OF INSURANCE
The Business Of Insurance Started With Marine Business. Traders, who used To
Gather in the Lloyd’s Coffee House in LAGREED to Share the Losses to Their Goods While
Being Carried by the Ships,. The Losses Used To Occur Because Of Pirates Who Robbed On
The High Seas Or Because Of Bad Weather Spoiling The Goods Or Sinking The Ship. The
The Indian Insurance Market Has A Grand History. The development Of Insurance
Dates Back To The 19th Century When The Europeans Started The Oriental Life Insurance
Company, Kolkata In 1888. The First Indian Insurance Company Bombay Mutual Life
Insurance Come In To Existence In 1870 To Cover Indian Lives At Normal Rates. The year
1870 Is Also Important In The Sense That The British Government Enacted For The First
Time Act That Year. Four Years Later Feroz Shah Mehta One Of The Doyen Of Indian
Financial Sector, Oriental Government Established The Oriental Government Security Life
Assurance Company And After That, Many Insurance Companies In Surfaced Life On Indian
Soil. However, The First Indian Insurance Act Was Passed On 1912, Again In 1938 And An
Amendment In 1950, When It Was Nationalized However The Sector Was Once Again
Thrown Open To The Private Sector In December 1999 Followed By The Establishment Of
The Indian Insurance Industry Was Dominated By Two States Insures I.E. The Life
Insurance Corporation In Life Insurance And The General Insurance Corporation In General
Insurance Before 2000 Which Were Created After The Nationalization Of The Life And
Non-Life Sector In 1956 And 1972 Respectively. In Dec’99, The IDRA Act Was Passed
56
Which Limited Foreign Investors To A 26% Cap On Equity Articipation, And Minimum
Capital Requirement Of $20 Million. At Present, More Then 12 Private players Are in the
Market and Some Are Still in the Pipeline. The Advent Of The New Kids Poses To LIC To
Somewhat Extent, For Which LIC Will Have To Change Its Current Policies Regarding
57
NEED OF INSURANCE
LIFE STAGES
Insurance need will change as your life does, from starting to work to enjoying your
golden years and all the stages in between. Each one of these stages may pose a different
insurance need/cover for you. In this section, we have drawn up the basic life stages and help
STAGE 1
An important stage where one lays down the foundation of a successful life ahead.
Take advantage of the time and power of compounding to ensure that you build up your
58
Your needs
Tax Planning
STAGE 2
JUST MARRIED
Marriage brings about a significant change. New dreams and new opportunities also
bring in additional responsibilities. While both of you look forward to a happy and secure life
, it is equally important to ensure that eventualities don’t come in the way of shaping your
dreams.
Your needs
STAGE 3
PROUD PARENTS
Once you have children, your need for life insurance is even more. You need to
protect your family from an untoward incident. Ensure your protection umbrella takes into
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account the future cost of securing your child’s dream. You will want life to go on for your
loved ones, and having enough life insurance is a way to help ensure that.
Your needs
STAGE 4
While you are busy climbing the ladder of success today, it is important for you to
take time and plan for your life after retirement. Having an early start for retirement planning
can make a significant difference to your savings. Think about your golden years even before
you have reached them. The key is to think ahead and plan well using your time and money.
Your needs
Lead a secure, independent and comfortable life style in your retirement years
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REASONS AND IMPORTANCE OF INSURANCE
In Life, Losses Are Sometimes Unavoidable. People May Become Ill And Lose
Income Or Savings To Pay Off Medical Bills. Individuals Or Their Relatives May Die Of
Illness Or Accidents. People's Homes Or Other Property May Suffer Damage Or Theft.
People Also May Accidentally Cause Injury To Others Or Damage To The Property Of
Others.
No One Knows In Advance When A Loss Will Occur Or How Serious That Loss
Will Be. The Uncertainty Surrounding Potential Losses Is Known As Risk. Insurance
Offers A Way for People to Replace Risk with Known Costs-The Costs of Buying and
Assume A Person Buys A New Car For Rs 4 Lakh. Its Owner Faces The
Possibility That, At Some Point, The Car Will Suffer Damage In An Accident. But How
Could The Owner Budget In Advance For A Loss Of Unknown Cost? The Cost To Repair
Or Replace The Car In The Event Of An Accident Could Range From The Price Of A
Bottle Of Touch-Up Paint To As Much As Rs.4 Lakh. If The Accident Injures Someone,
The Costs Of Medical Care Could Be Much Higher. Through The Mechanism Of
Insurance, However, The Car Owner Can Share The Risk Of An Accident With Others
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Insurance Pools or Combines Risks Shared By Many People, Thereby Reducing
The Risks Faced By A Group. People Pay To Buy Insurance Coverage (Protection From
Risk).In Exchange, A11 Policy-holders (People Who Own Insurance Policies) Receive
Insurers Distinguish Between Two Types Of Risk: Speculative Risk And Pure
Risk. Speculative Risk Offers Both The Potential For Gain And The Potential For Loss.
People Who Invest In The Stock Of Companies, For Example, Take Speculative Risk. An
Increase In Stock Prices Produces A Gain, While A Decline In Stock Prices Produces A
Loss. Pure Risk, By Contrast, Creates The Potential Only For Loss. Although Pure Risks
Historically insurance Dealt Only with Pure Risks, And Most People Still Buy
Insurance To Cover Pure Risks. No One, For Instance, Experiences A Gain When They
Go A Full Year Without An Auto Accident. However, Some Insurance Companies Now
Help Businesses Finance Large Losses Including Those Incurred On Speculative Risks,
Such As The International Exchange Of Currency. Also, In the 1990s Financial Markets
And Some Professions Outside Insurance. Such As The Field Of Environmental Impact
And Damage Assessment, Began To Expand Into Risk Management: For The First Time.
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THE IMPORTANCE OF INSURANCE
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. Because
insurance is available and affordable, banks can make loans with the assurance that the loan's
collateral (property that can be taken as a payment if a loan goes unpaid) is covered against
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
countries. Employers buy insurance to cover their employees against work-related injuries
and health problems. Businesses also insure their property, including technology used in
production, against damage and theft. Because it makes business operations safer nsurance
countries. In addition, millions of people work for insurance companies and related
businesses.
premiums and eventually redistribute that money as payments. Depending on the type of
insurance, redistribution can take anywhere from a few months to many decades. Because
of this delay between collecting and paying out funds, insurance companies invest their
funds to firing ton extra revenues. Such investments help businesses and governments
finance their operations, and profits from those investments support the operations of
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insurance companies. With these investment earnings, insurance companies can keep rates
The mechanism of insurance is very simple. People who are exposed to the same
risks come together and agree that, if any one of them suffers a loss, the others will share the
loss and make good to the person who lost. All people who send goods by ship are exposed
to the same risks, which are related to water damage, ship sinking, piracy, etc. Those owing
factories are not exposed to these risks, but they are exposed to different kinds of risks like,
fire, hailstorms, earthquakes, lightning, burglary, etc. Like this, different kinds of risks can
be identified and separate groups made, including those exposed to such risks. By this
method. The heavy loss that any one of them may suffer (all of them may not suffer such
losses at the same time) is divided into bearable small losses by all. In other words, the risk
is spread among the community and the likely big impact on one is reduced to smaller
If a jumbo jet with more than 350 passenger’s crashes, the loss would run into
several cores rupees. No airline would be able to bear such a loss. It is unlikely that many
jumbo jets will crash at the same time. If 100 airline companies flying jumbo jets, come
together into an insurance pool, whenever one of the jumbo jets in the pool crashes, the loss
to be borne by each airline would come down to a few lakes of rupees. Thus, insurance is a
business of 'sharing'.
There are certain principles, which make it possible for insurance to remain a fair
arrangement. The first is that it is difficult for any one individual to bear the consequences
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of the risks that he is exposed to. It will become bearable when the community shares the
burden. The second is that the peril should occur in an accidental manner. Nobody should be
in a position to make the risk happen. In other words, none in the group should set fire to his
assets and ask others to share the costs of damage. This would be; taking unfair advantage of
an arrangement put into place to protect people from the risks they are exposed to. The
occurrence has to be random, accidental, and not the deliberate creation of the insured
person.
The manner in which the loss is to be shared can be determined before-hand. It may
be proportional to the risk that each person is exposed to. This would be indicative of the
benefit he would receive if the peril befell him. The share could be collected from the
members after the loss has occurred or the likely shares may be collected in advance, at the
time of admission to the group. Insurance companies collect in advance and create a fund,
While it may not be possible to tell beforehand, which person will suffer, it may be possible
to tell, on the basis of past experiences, how many persons, on an average, may suffer losses.
Example-1
In a village, there are 400 houses, each valued at rs.20, 000. Every
year, on the average, 4 houses get burnt, resulting into a total loss of Rs.80, 000.If all the
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400 owners come together and contribute rs.200 each, the common fund would be
rs.80,000.This is enough to pay rs.20,000 to each of the 4 owners whose houses got burnt.
Thus, the risk of 4 owners is spread over 400 houses -owners of the village.
Example-2
There are 1000 persons who are all aged 50 and are healthy. It is
expected that of these, 10 persons may die during the year. If the economic value of the loss
suffered by the family of each dying person is taken to be rs.20, 000, the total loss would
work out to rs.2, 00,000/-. If each person in the group contributed Rs. 200/- a year. The
common fund would be Rs. 2, 00,000/-.this would be enough to pay rs.20, 000 to the family
of each of the ten persons who die. Thus, the risks in the case of 10 persons are shared by
1000 persons.
Life Insurance has come a long way from the earlier days when it was originally
conceived as a risk covering medium for short periods of time, covering temporary risk
situations, such as sea voyages. As life insurance became more established, it was realized
A) TEMPORARY NEEDS/THREATS:
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B) REGULAR SAVINGS:
Providing for one's family and oneself, as a medium to long term exercise (through a
series of regular payments of premiums). This has become more relevant in recent times as
C) INVESTMENTS:
Put simply, the building up of savings while safeguarding it from the ravages of
inflation. Unlike regular saving products, investment products are traditionally lump sum
D) RETIREMENT:
Cultural And Social Environment. One Can Buy A Suitable InsurancPolicy, Which Will
67
PRIVATIZATION OF INSURANCE
The Indian Insurance Sector Has Finally Opened Up And Its With Much
Anticipation That New Players Are Awaiting Their Share Of Market. License Have Been
Issued To Both Indian And Foreign Players-Reliance, HDFC -Standard Life, Max India-
New York, Royal Sundaram Alliance, ICICI Prudential, IFFCO-Tokyo Marine, Bajaj
Allianz, Birla Sun life, Tata AIG, AVIVA Life Insurance, SBI Life, Om Kotak Mahindra
Are Some Of The Entrants Into The Newly Liberalized Indian Insurance Market. ICICI
Prudential and HDFC-Standard Life Have Issued Their Life Policies-The First From The
The First Move For The Liberalization Came With The Malhotra Committee Report
Regulatory Authority And Restructuring The Government Monopoly LIC And GIC And Its
Subsidiaries. IRDA Act Passed In November 1999 Had Set Ball Rolling For The Entry Of
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BLUE PRINT OF SERVICE DELIVERY OF AN INSURANCE
Make
Tells about Complete the
understand
co. & its documentation
about maturity
various plans Holding bin Premium
and funds
growth payment
Shows
Seat agent Select
brochures
/ catalog plan Deliver tea
Support
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INFORMATION TECHNOLOGY AND INSURANCE
In the insurance industry today, there is a clear trend away from selling a
Instead of focusing on their different products lines as silos (i.e., life, property and casualty
etc) insurers are looking for ways to offer highly targeted insurance products that are
tailored to the individuals customers with the highest propensity to buy them. There is an
evolutionary change in the technology that has revolutionized the entire insurance sector.
Insurance industry is a data-rich industry, and thus, there is dire need to use the data for
issue. Moreover, customers are getting increasingly sophisticated and tech-savvy. People
today don't want to accept the current value propositions, they want personalized
interactions and they look for more and more: features and add ones and better service the
insurance companies today must meet the; need of the hour for more and more personalized
approach for handling the customer. Today managing the customer intelligently is very
critical for the insurer especially in the very competitive environment. Companies need
to apply different set of rules and treatment strategies to different customer segments.
in an integrated system. With the explosion of website and greater access to direct
their customers with more impact and to generate new revenue through cross selling and
up selling activities. To ensure that the customers are receiving personalized information,
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typically include a search engine and lets the customers locate the all document and
information related to their queries of request for services, customers can hereby use the
knowledge database to mange their products or the company information and invoices,
claim records, and histories of the service inquiry. These products also may be able to learn
from the customer's previous knowledge database and. To use their information when
The insurance sector remains a very competitive market and those companies
that are able to best utilize their data and provide their customer with the most
personalized options will have the distinct competitive advantage. The insurers that come
up to the top will be those who leverage the appropriate technology solutions effectively
in order to foster customer loyalty, attract new customers and improve operational efficiency
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1. LIFE Insurance Corporation
Private Life Insurance Company % of Foreign Equity Name of the foreign partner
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1 Allianz Bajaj Life Insurance 26 Allianz Co. Ltd.
6 Max New York Life Insurance 26 New York Life Co. Ltd.
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Private Life Insurance Company % of Foreign Equity Name of the foreign partner
LIC 82.30
ICICI PRUDENTIAL 5.63
BIRLA SUN LIFE 2.56
BAJA ALLIANZ 2.03
SBI LIFE 1.80
HDFC STANDARD 1.36
TATA AIG 1.29
MAX NEW YORK 0.90
A VIVA 0.79
OM KOTAK 0.51
MAHINDRA
ING VYASA 0.37
AMP SANMAR 0.26
METLIFE 0.21
Source: Swissre
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4.TABLE: ICICI PRUDENTIAL LIFE INSURANCE
Reserves 6,581
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77
RESEARCH METHODOLOGY
"All progress is born of inquiry. Doubt is often better than overconfidence. For it
leads to invention."
research to arrive at findings, which are also dealt with and lead to a logical deduction
Research Design:
Research design is a set of advance decisions that make up the master plan
specifying the methods and procedure s for collecting and analyzing the needed information.
Descriptive Research:
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Descriptive research, also known as statistical research, describes data and
Who,
What,
Where,
When,
How.
Primary Data :
Questionnaire
b) Magazines
c) Books
from different customers. The questions considered were close ended as well as open ended.
because the study did not required any special group of commodity as the respondents.
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Sample size: The sample size for the study was kept at 100. Large sample size is
subjected to many complications and wastage of time & money. This sample size was fair
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OBJECTIVES TO THE TOPIC
To find preferences of various life insurance companies among the Indian public
81
82
ANALYSIS AND FINDINGS
QUESTION 3.
4% 10%
10%
6% FD
4%
MFs
6% Insurance
NSC
Bonds
ULIP
Debenture
60%
From the above data it can be analyzed that 60 % of the customers are interested in
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QUESTION 4.
20%
80%
80 % of the customers are like to invest in life insurance because it covers most of the
future risks.
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QUESTION 7:
ICICI
10 8
5 SBI
4 44
5 3 3 3
1 1 2 2 1 21 22 11 BAJAJ
ALLIANZ
0 BIRLA SUN
1 2 3 4 5 LIFE
HDFC
It can be seen from the data that most of the customers are preferring LIC and next to
LIC is ICICI so it seems that they are the big shots in the market
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QUESTION 8.
W H IC H P L A N A T T R A C T S Y O U ?
5
4 1 2
3
2
1 3 4
0
T E R M P O LINI CV YE S T M CE HN ITL D P O EL INC DY O W M ME ON NT E Y BPAECNK S IO N P5 L A N
P O L IC Y P O L IC Y P O L IC Y
Term policy and money back are rated 1 (which is the most) by most of the customer
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QUESTION 9:
10% 10%
FAMILY
10%
FRIENDS
COLLEAGUE
10%
ADVERTISING
40%
AGENT
INTERNET
20%
It can be seen from the above data that most of the customers came to know about the
plans through agents as they provide all the information they needed and try to satisfy them.
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QUESTION 10.
AGENTS
27% 28%
BROKERS
SELF
TELEMARKETING
9% 9% INTEREST
9% 18% CORPORATE AGENTS
Most of the customers are like to invest their money through agents as they are the
representative of company or bank acting as the intermediary between company and bank.
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QUESTION 11.
PERCENTAGEOFPREFERENCEFOR
PRODUCTSOFICICIPRUDENTIAL
5% LIFETIMESUPER
10%
SMARTKID
40%
RETIREMENT
20%
SOLUTION
HEALTH
SOLUTION
ANYOTHER
25%
The above analysis shows that the most preferred plan of ICICI Prudential is Life
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QUESTION 12.
10%
10%
LIFE COVERAGE
TAX BENEFIT
MEDICAL BENEFIT
20% 60% ANY OTHER
As life is valuable for everyone so most of the customers want a secure life so the
purpose is to secure risk related with life. The other reason for choosing life coverage is that
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QUESTION 13:
MAXIMUMSUMASSUREDPRE FERED
BYPEOPLE
40% ABOVE4LAKH
It is clear from above analysis that most of them are interested in insuring for an
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Question 14.
10
8 LIC
6
4 ICICI
2 SBI
0
AVERAG
EXCELLE
POOR
GOOD
BAJAJ ALLIANZ
BIRLA SUN LIFE
NT
HDFC
According to the plan and services most of the customers rated LIC as the excellent
and good.
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QUESTION 18.
10%
35%
upto 1 lakh
25% 1 lakh - 2 lakh
2 lakh-4 lakh
above 4 lakh
30%
Above analysis shows that people like to invest as per their income.
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LIMITATIONS
The market study and finding are applicable to city of Lucknow and near by areas.
The response during the research for investment in life insurance industry was
significantly low (only 8%) and-therefore the implication of the study may also differ
significantly.
The sample size mainly consisted of government employees and medium &lower
income group and these type of respondents are not enough helpful in analyzing the
market share.
One other important limitation of the study was that of time limitation due to which
The sample size was taken only 100; therefore it is difficult to say any thing
concretely.
Most of the respondents were L.I.CS policyholders so that it was not easy to find out
Absence of professional researcher and team was another limitation of this study.
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96
SWOT ANALYSIS
STRENGTH:
India.
HNI advisors.
customer requirement.
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WEAKNESS:
Company does not penetrate on the rural market at a time
There is no plan for the low income group.
Fees for the advisor is high than the other company.
OPPORTUNITY:
Insurance market is very big, where company can expand its horizon in
insurance industry.
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THREATS:
'OLD HABITS DIE HARD' : Its still difficult task to win the confidence
government company.
Plan for all income group is not available which can create adverse effect
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100
CONCLUSIONS
76% of the Indian prefer LIC then any other insurance companies.
Prevention of loss, assured return and long term investment is the important
Only few of the Indians are aware of private life insurance company.
Most of the Indians are of the opinion that private insurance company would be able
Most of the Indian are interested in Term and Money back policies.
There is significant relationship existing between annual house hold income and
amount insured.
Based on the monthly house hold income, people prefer to invest their money in
bank deposits, post office schemes, real estate, insurance, mutual funds, shares etc.
Agents are mostly responsible for selling insurance product in India as they are
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RECOMMENDATIONS
It is important to understand the psychology of customers, and why they choose and
what they choose so considering this in mind the service should be provided. In the
service sector the customer involvement is high so the service provider should offer
To increase the market share the private players should introduce insurance plans for
more efficient so that they can provide efficient and customer friendly services.
Major share of the policy holders was lying with Life Insurance Corporation because
people still think that taking policy from LIC is much safer as compared to
private players so there is a need to aware people that the private companies are
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BIBLIOGRAPHY
Websites:
www.icicipru.com
www.wikipedia.com
www.google.com
Books:
Brochures
Pamphlets
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QUESTIONNAIRE
105
“Consumer preference for insurance with special reference to
ICICI Prudential”
a) One b) Two
c) Three d) Four
a) One b) Two
a) FD b) Mutual fund
c) Insurance d) NSC
e) Bonds f) ULIP
g) Debenture
a) Life b) General
a) 1 b) 2
A) Spouse:
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a) 1 b) 2 c) 3
B) Children:
a) 1 b) 2 c) 3
1 2 3 4 5
LIC
ICICI PRUDENTIAL
SBI
BAJAJ ALLIANZ
BIRLA SUN LIFE
HDFC LIFE
Q8) Which plan attracts you? (1 for the most and 5 fore least)
1 2 3 4 5
TERM POLICY
INVESTMENT POLICY
CHILDS POLICY
ENDOWMENT POLICY
Q9) How do you come to know about the plan or the company?
a) Family b) Friends
c) Colleagues d) Advertisement
e) Agent f) Internet
a) Advisor b) Brokers
c) Self d) Telemarketing
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e) Internet f) Corporate agents
Q 11) Do you have any insurance plan of ICICI Prudential? If yes, specify in which product:
e) Any other
Q13) What is the maximum sum assured of the policy you have?
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Q15) What can the organization do to increase your satisfaction?
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Q17) Age:
a) 20 – 30 b) 30 – 40
c) 40 – 50 d) Above 50
Q18) Occupation:
a) Businessman b) Govt.Employee
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