Icici Pru Report

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PROJECT REPORT ON

PROBLEM AND PROSPECTS OF INSURANCES AGENCIES

by

NARPAL SINGH CHAUHAN

ENROLLMENT NO. 249090039

In partial fulfillment of the requirements of final year MBA curriculum of Two

years Full time MBA (Industry Integrated) Programme.

Submitted to:

Through


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STUDENTS DECLARATION

I hereby solemnly affirm, declare and state that report titled PROBLEM AND

PROSPECTS OF INSURANCES AGENCIES was done by me with due diligence and

sincerity and this report based on that study is a bonafied work by me and submitted to

ANNAMALAI UNIVERSITY through RAMAIAH INSTITUTE OF MANAGEMENT

SCIENCES under the guidance and supervision ofProf. LAKSHMAN, Faculty RIMS is

my original work and not submitted for the award of any other degree, diploma,

fellowship or other similar title or prizes.

PLACE: BANGALORE Signature:

DATE: ENROLLMENT NO. 2490900039


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CERTIFICATE FROM THE GUIDE

This is to certify that the project report titledPROBLEM AND PROSPECTS OF

INSURANCES AGENCIES by NARPAL SINGH CHAUHAN, ENROLLMENT NO.

2490900039carried out in partial fulfillment for the award of degree of MBA (Industry

Integrated) programme of Annamalai University at RIMS, Bangalore under my guidance

and direction. This study report is an original work and not submitted earlier to any

University/Institute.

PLACE: BANGALORE Signature:

DATE: Guide Name Prof. LAKSHMAN


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ACKNOWLEDGEMENT

A project report seems to be an individual effort is in fact teamwork. Internship at

ICICI Prudential Life Insurance Co. Ltd., Jaipur, was just like an opportunity to shake

hand with the practical world of business.

I am indebted to all those individuals who helped me in gaining knowledge &

insight into various aspects of organization. The source of learning have been one too

many & a complete list of individual references would become encyclopedic.

I want to express my deepest gratitude to all marketing team in ICICI Prudential

Life Insurance Co. Ltd., Jaipur, without their help this summer internship in ICICI would

not be possible.

My deepest appreciation also extends to Prof. U.N. LakshmanProject guide,

Faculty of RIMS, who critically reviewed my project report & provided suggestions.

Finally, I would express my gratitude towards my classmates, facility guide and

my family members those always ready to help me out from any problem throughout my

internship.

NARPAL SINGH CHAUHAN

TABLE OF CONTENTS


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S. NO. TOPIC PAGE NO.

1 EXECUTIVE SUMMARY 1

2 GENERAL INTRODUCTION 3

3 INDUSTRY PROFILE 8

4 FUTURE OF INDIAN INSURANCE MARKET 24

5 COMPANY PROFILE 25

6 ICICI PRUDENTIAL PRODUCT PROFILE 32

7 PORTERS FIVE-FORCE OF INSURANCE

INDUSTRY

39

8 SHARE OF PRIVATE INSURANCE PALYERS 41

9 REVIEW OF LITERATURE 46

10 RESEARCH METHODOLOGY 52

11 DATA ANALYSIS & FINDINGS 55

12 CONCLUSIONS & RECOMMENDATIONS 68

13 LIMITATIONS 72

14 BIBLIOGRAPHY 73

15 APPENDIX I 74

16 APPENDIX - II 75

EXECUTIVE SUMMARY


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With largest number of life insurance policies in force in the world, Insurance happens to be a

mega opportunity in India. Its a business growing at the rate of 15-20 per cent annually and

presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per

cent to the countrys GDP. Gross premium collection is nearly 2 per cent of GDP and funds

available with LIC for investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover, health insurance and

non-life insurance continue to be below international standards. And this part of the population

is also subject to weak social security and pension systems with hardly any old age income

security. This itself is an indicator that growth potential for the insurance sector is immense.

A well-developed and evolved insurance sector is needed for economic development as it

provides long-term funds for infrastructure development and at the same time strengthens the

risk taking ability. It is estimated that over the next ten years India would require investments of

the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments

in infrastructure development to sustain economic growth of the country.

With a large capital outlay and long gestation periods, infrastructure projects are fraught with a

multitude of risks throughout the development, construction and operation stages. These

include risks associated with project implementation, including geological risks, maintenance,

commercial and political risks. Without covering these risks the financial institutions are not

willing to commit funds to the sector, especially because the financing of most private projects is

on a limited or non- recourse basis.

Insurance companies not only provide risk cover to infrastructure projects, they also contribute

long-term funds. In fact, insurance companies are an ideal source of long-term debt and equity


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for infrastructure projects. With long-term liability, they get a good asset- liability match by

investing their funds in such projects.

IRDA regulations require insurance companies to invest not less than 15 percent of their funds

in infrastructure and social sectors. International Insurance companies also invest their funds in

such projects.

Insurance is a federal subject in India. There are two legislations that govern the sector- The

Insurance Act- 1938 and the IRDA Act- 1999.

INTRODUCTION

GENERAL INTRODUCTION

Meaning of Insurance


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Insurance in which the risk insured against is the death of a particular person, the

insured,upon whose death while the policy is in force, the insurance company agrees to

pay a statedsum or income to the beneficiary.

Insurance on human lives including endowment benefits, additional benefits in event of

deathor dismemberment by accident or accidental means, additional benefits for

disability, andannuities.

Why Life Insurance?

Buying Insurance cannot be compared with any other form of investment. Insurance

gives onea life long benefit and the returns will definitely come but only when one needs

it the most i.e.at the right time.

Insurance is not about how much more it can offer you when the stock market is at its

peak. Itmay not be an attractive investment option. But weigh the pros and cons and

consider howmuch more it offers at a small price.

Most important of all it provides you with that unique sense of security that no other form

ofinvestment provides. It gives you a sense of financial support especially during that

time ofcrisis irrespective of the fluctuations in the stock market. Insurance provides for

career goalsright from childhood years.If the earning member of the family is no more children s educational needs will not suffer.

Infact his higher education too will be provided for. One need not spend sleepless nights

thinkingabout how to save for his child's marriage. Life Insurance will take care of that typical

once-in-a-life-time spending on marriages.


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An accident or a disability may be devastating but an insurance policy can be of utmostsupport

for the family during such times too. Besides it provides for additional benefits such asbonuses.

One need not worry about your retirement years. The rising prices, taxes, and yourlifestyle will

be taken care of easily. And you can relax and spend your old age in comfort andpeace.

People invest in life insurance owing to a few key reasons, mainlyInsurance creates financial

provisions for the deceased's dependants.

Insurance provides for the policyholder's old age after his earning power diminishes.After all,

interest rates may fall and invested holdings may lose value and stop gainingdividends, but the

value of an insurance policy once set, never reduces. Insurance also provide a legally

authorized way to reduce the incidence of Income Tax.

Insurance as an Investment

Agreed, insurance may not be the best place to invest your hard-earned money. But there

aresufficient reasons for one to believe that it can be a highly lucrative avenue to

facilitatesavings. People often talk about yield on investment and tend to compare their values

with those available on various insurance schemes. This is particularly typical within the Indian

sub- continent where one conveniently forgets the element of risk covered by life insurance.

It is extremely unfair to compare the performance of insurance against other

investmentswithout considering the core features of insurance. The very essence of

insurance is to protectyour family from the uncertainty of your life. Hence it proves very

logical to evaluate the costsinvolved towards this feature.

One must accept that out of the total amount paid by one for his life insurance, a

certainamount is used for providing the risk cover and only the balance can be utilized

as savings. Inother words, the total premium one pays minus the amount evaluated, as


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Multiple Applications: The future is uncertain for each and every one. No one knows how long

he or she will live. The investment benefit is paid to the insured's beneficiaries after hisdeath or

it can be used during the life as well. Life insurance policy owners can turn to the cashvalue of

the policy in case of a financial emergency when all avenues are either blocked ordenied. They

know that they can avail of loans based on their insurance policies.

Insurance policy owners can use the cash value of their policies to meet their long-

termfinancial needs as well. They may have purposefully invested in insurance to use

the cash inthe policy for their children's future marriage expenses or higher education

fees.

Enduring Elasticity:Since life insurance is flexible enough to serve several needs, the insured

can keep several long-term goals in mind once he or she invests in the insurance plan.The cash

value of the policy can be allocated towards augmenting the monthly income duringthe

retirement years. Leisure years should be turned into pleasure years. Permanent lifeinsurance

is designed on the concepts of long-term flexibility.

Financial Security: The insurance policy offers contractual guarantees to people looking

forpeace of mind when they buy life insurance. Life insurance offers complete financial security.

The purchase of life insurance demonstrates concern for a family's future financial well being.

Regard forFamily: The purchase of life insurance clearly displays care and concern for the

people the policy owner loves.

Insurance is Safer: No financial institution can do what life insurance does. No industry can back

its products with reserves and surplus as sound as those of the insurance industry.


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The proof of strength and safety that insurance companies have ensured even under

the mostadverse of conditions is a matter of pride for the entire insurance industry. For

generation aftergeneration, life insurance has been acclaimed as the very benchmark of

security against whichthe other industries are measured.

INDUSTRY PROFILE

Insurance in India

The insurance sector in India has come a full circle from being an open competitive market to

nationalization and back to a liberalized market again. Tracing the developments in the Indian

insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.

A Brief history of the Insurance Sector

The business of life insurance in India in its existing form started in India in the year1818 with

the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important

milestones in the life insurance in India.

1912: The Indian Life Assurance For over 50 years, life insurance in India was defined and

driven by only one company the Life Insurance Corporation of India (LIC). With the Insurance


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Regulatory and Development Authority (IRDA) Bill 1999 paving the way for entry of private

companies into both life and general sectors there was bound to be newfound excitement- and

new success stories. Today, just three years since their entry, their cumulative share has

crossed 13% (source: IRDA), far exceeding expectations. Clearly insurance is on a growth path.

The percentage of premium income to GDP, which was just 2.3% in 2000-01 rose to 3.3% in

2002-03; and life insurance has emerged as the dominant contributor to this growth.

The industry presented a huge opportunity. Life insurance penetration, for instance, was at an

abysmal 22% of the insurable population. However, private players have had to rise to many

challenges. They were faced with attitudinal barriers towards the category and the perception

that insurance was only a tax saving tool. Insurance per se had lost it basic rationale: protection.

It wasnt surprising then that its potential lay frozen and unexploited. The challenge for private

insurance players was to change the established category driver and get customers to evaluate

life insurance as an investment-coproduction tool.

Brief Review of Scenario Insurance

Insurance in India started without any Regulation in Nineteenth century.

It was story of a typical colonial era. A few British companies dominated the market mostly in

large urban centers. Insurance was nationalized mainly on 3 counts First, Indian lives were not

insured.

Second, even if they were insured, they were treated as substandard lives and extra premium

was charged. Third, there were gross irregularities in the functioning of Life insurance was

nationalized in the year1956, and then general insurance was nationalized in the year1972. In

1999, the private insurance companies were allowed back again into insurance sector with


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maximum cap of 26 percent foreign holding.1818 The British introduce to India, with the

establishment of the Oriental Life Insurance Company in Calcutta.

1850 Non life insurance debuts, with Triton Insurance Company.

1870 Bombay Mutual life Assurance Society is the first Indian-owned life insurer

1907 Indian mercantile Insurance is the first Indian non-life insurer.

1912 The Indian life assurance companies act enacted to regulate the life insurance business.

1938 the insurance act, which forms the basis for most current insurance laws, replaces earlier

act.

1956 Life insurance nationalized, government takes over 245 Indian and foreign insurers and

provident societies.

1956 Government sets up LIC

1972 Non life insurance nationalized, GIC set up.

1993 Malhotra committee, headed by former RBI governor R.N.Malhotra, set up to draw up a

blue print for insurance sector reforms.

1994 Malhotra Committee recommends re-entry of private players, autonomy to PSU insurers.

1997 Insurance regulator IRDA (Insurance Regulatory and Development Authority) set up.

2000 IRDA starts giving licensed to private insurers

2001 ICICI Prudential Life Insurance came into the market to sell a policy.

2002 Banks were allowed to sell insurance plans, as TPAs enter the scene, insurers start

settling non-life claims in the cashless mode.


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The Insurance Regulatory and Development Authority (IRDA):

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in

December 1999. The IRDA since its incorporation as a statutory body in April 2000 has

fastidious stuck to its schedule of framing regulations and registering the private sector

insurance companies.

The other decisions taken simultaneously to provide the supporting systems to the insurance

sector and in particular the life insurance companies were the launch of the IRDAs online

service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the insurance

companies would have a trained workforce of insurance agents in place to sell their products,

which are expected to be introduced by early next year.

Since being set up as an independent statutory body the IRDA has put in a framework of

globally compatible regulations. In the private sector12 life insurance and 6 general insurance

companies have been registered.

With the demographic changes and changing life styles, the demand for insurance cover has

also evolved taking into consideration the needs of prospective policyholder for packaged

products. There have been innovations in the types of products developed by the insurers,

which are relevant to the people of different age groups, and suit their requirements. Continued

innovations in product development has resulted in a wide range of flexible products to meet the

requirements for cover at different stages of life -today a variety of products are available

ranging from traditional to Unit linked providing protection towards child, endowment, capital

guarantee, pension and group solutions.


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A number of new products have been introduced in the life segment with guaranteed additions,

which were subsequently withdrawn/toned down; single premium mode has been popularized;

unit linked products; and add-on/riders including accidental death; dismemberment, critical

illness, fixed term assurance risk cover, group hospital and surgical treatment, hospital cash

benefits, etc. Comprehensive packaged products have been popularized with features of

endowment, money back, whole life, single premium, regular premium, rebate in premium for

higher sum assured, premium mode rebate, etc., together with riders to the base products.

Historical Perspective

Prior to 1956 -242 companies operating

1956 -Nationalization- LIC monopoly player -Government control

2001 -Opened up sector

Contribution to Indian Economy

Life Insurance is the only sector, which garners long term savings.

Spread of financial services in rural areas and amongst socially less privileged.

Long-term funds for infrastructure.


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Strong positive correlation between development of capital markets and insurance/pension

structure.

Employment generation.

Insurance Industry prior to de-regulation

Prior to deregulation in 2000, market was a public monopoly.

Public Monopoly

- 2000 Offices

- Over 800,000 agents

Distribution through tied agents only

Sales approach primarily on a tax savings platform

Traditional style product offering : Endowment and money back plans

Inadequate and inflexible products

Pensions: Small part of product offer

Limited focus on customer needs

Improving Service Standards

Pre Deregulation Limited Distribution

Post Deregulation Service through Distribution


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Insurance companies in India

IRDA has till now provided registration to 12 private life insurance companies and 9 general

insurance companies. If the existing public sector insurance companies are considered then

there are presently 13 insurance companies in the life side and 13 companies functioning in

general insurance business. General Insurance Corporation has been sanctioned as the "Indian

reinsurer" for underwriting only reinsurance business.

List of Insurance companies in India

LIFE INSURERS Websites

Public Sector

Life Insurance Corporation of India www.licindia.com

Private Sector

Allianz Bajaj Life Insurance Company Ltd. www.allianzbajaj.co.in

Birla Sun-Life Insurance Company Limited www.birlasunlife.com

HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com


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ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com

ING Vysya Life Insurance Company Limited www.ingvysayalife.com

Max New York Life Insurance Co. Limited www.maxnewyorklife.com

MetLife Insurance Company Limited www.metlife.com

Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com

SBI Life Insurance Company Limited www.sbilife.co.in

TATA AIG Life Insurance Company Limited www.tata-aig.com

AMP Sanmar Assurance Company Limited www.ampsanmar.com

Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com

GENERAL INSURERS

Public Sector

National Insurance Company Limited www.nationalinsuranceindia.com

New India Assurance Company Limited www.niacl.com

Oriental Insurance Company Limited www.orientalinsurance.nic.in


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United India Insurance Company Limited www.uiic.co.in

Private Sector

Reliance General Insurance Co. Limited www.ril.com

Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com

TATA AIG General Insurance Co. Limited www.tata-aig.com

Cholamandalam General Insurance Co. Ltd. www.cholainsurance.com

Export Credit Guarantee Corporation www.ecgcindia.com

HDFC Chubb General Insurance Co. Ltd.

REINSURER

General Insurance Corporation of India www.gicindia.com

Indian Insurance Market

The Indian insurance market in spite of having a history covering almost two centuries

took a turn after the establishment of the Life insurance corporation in India in 1956.

From being an open competitive market to being nationalized and then back to a

liberalized market again, the insurance sector has witnessed all aspects of contest.


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The Indian insurance market conventionally focused around life insurance until recently, a

various range of other insurance policies covering sectors like medical, automobile, health and

other classes falling under general insurance came up, generally provided by the private

companies. The life insurance of India added 4.1% to the GDP of the economy in 2009, an

immense growth since 1999, when the gates were opened for the private company in the

market.

Private Insurers in Indian Insurance Market

Registration

No.

Date of

Registration

Name of the Company

101 23.10.2000 HDFC Standard Life

104 15.11.2000 Max New York Life

105 24.11.2000 ICICI Prudential Life

107 10.01.2001 Om Kotak Mahindra

Life


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109 31.01.2001 Birla Sun Life Insurance

11

01

2.02.2001

TATA AIG Life

Insurance

111 30.03.2001 SBI Life Insurance

Competitors Insurance Companies

LIFE INSURANCE CORPORATION OF INDIA

On January 19, 1956 the President of the Indian Union issued anordinance, providing for the

taking over, in public interest, of theManagement of life insurance pending nationalization of

suchbusiness, & the then Finance Minister explained the objectives ofnationalization of life

insurance business.

In June 1956, the parliament passed a bill for nationalization oflife insurance business in India

and for setting up a corporation asthe sole agency for carrying on this business in India.

Thecorporation, set up under this Act, is known as Life InsuranceCorporation of India, which

started functioning on September1,1956.For the purpose of servicing of policies issued before

September1,1956, some integrated head offices & integrated branch office unitswere created.

These offices have nothing to do with the policiesissued by the corporation. Corporation also

took over foreign lifebusiness of the Indian insurers.

HDFC STANDARD LIFE INSURANCE COMPANY


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HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC, Indias largest

housing finance institution and Standard Life Assurance Company, Europes largest mutual life

company. HDFC manages Rs. 21,450 Crores in assets and Standard Life manages over US

$100 billion in assets. Both the promoters are well known for their ethical dealings, their

financial strength and their commitment to be a long-term player in the life insurance industry.

MAX NEW YORK LIFE INSURANCE COMPANY

Max New York Life Insurance Company is a joint venture between New York Life International

Inc. and Max India Limited. New York Life, a Fortune 100 Company, is one of the worlds

experts in life insurance with over156 years of experience in the business and over US$ 165

billion (Rs. 775,000 Crores) in assets undermanagement. Max India Limited is a multi-business

corporate, focused on the knowledge, people, and service-oriented business of life insurance,

healthcare and information technology.

OM KOTAK MAHINDRA LIFE INSURANCE

Om Kotak Mahindra Life Insurance, a company under Kotak Mahindra Group is a 74:26 life

insurance joint venture between Kotak Mahindra Finance Limited with Old Mutual, U.K.The

philosophy of Om Kotak Mahindra is helping their customers take financial decisions at every

stage in life. Their aim is toconsistently offer a wide range of innovative life insurance products,

to help their customers remain financially independent, which is why they believe that freedom

to take life on "Jeene Ki Aazadi".The alliance of Om Kotak Mahindra with Old Mutual has given

it unmatched expertise in life insurance area. With 156 years of experience in life insurance

business, Old Mutual is today an International Financial Service Group based in London.

BIRLA SUN LIFE INSURANCE COMPANY

It is a joint venture of Aditya Birla Group and Sun Life Financial Services with the objective that


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Insurance is not about something going wrong. It's often about things going right. One of the

wonders of human nature is that we never believe anything can actually go wrong. Surely, life

has its share of ifs. At Birla Sun Life however, we believe it has its equally pleasant share of

buts as well. We at Birla Sun Life stand committed to helping you realize those happy moments,

which make a life. Be it living the same lifestyle in your post retirement days or providing a

secure future for your loved ones, in case something happens to you.

TATA AIG LIFE INSURANCE COMPANY

Tata AIG is a joint venture that is backed by the Tata Group Indias most respected industrial

conglomerate, with revenues of more than US $8.4 billion, and American International Group,

Inc. (AIG) the leading US-based international insurance and financial services organization,

with a presence in over130 countries and jurisdictions throughout the world. Tata AIG offers a

gamut of innovative products in the Life Insurance sector.

SBI LIFE INSURANCE COMPANY

SBI Life Insurance Company Ltd. is a joint venture betweenState Bank of India and Cardiff of

France. SBI is the largest bank in India and Cardiff is a leading insurance company in France

operating in 29 countries. Cardiff is a wholly owned subsidiary of BNP Paribas, the largest

European Bank.

Policy Change in the Indian Insurance market

The Insurance Regulatory Development Act, 1999 (IRDA Act) allowed the entry of private

companies in the insurance sector, which was so far the sole prerogative of the public sector


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insurance companies. The act was passed to protect the concerns of holders of insurance

policy and also to govern and check the growth of the insurance sector. This new act allowed

the private insurance companies to function in India under the following circumstances:

y The company should be established and registered under the 1956 company Act

y The company should only the serve the purpose of life or general insurance or

reinsurance business

y The minimum paid up equity capital for serving the purpose of reinsurance business has

been decreed at Rs 200 crores

y The minimum paid up equity capital for serving the purpose of reinsurance business has

been decreed at Rs 100 crores

y The average holdings of equity shares by a foreign company or its subsidiaries or

nominees should not go above 26% paid up equity capital of the Indian Insurance

Company.

Investment policy in the Indian insurance market

y A policy known by the name of 'Health plus Life Combi Product', offering life cover along

with health insurance has been granted permission by the IRDA act and insurance

companies are allowed to provide it now.

y The FDI limit in the insurance sector has been capped at 26% for the foreign marketers

but the government is thinking to increase it to 49% and a bill of this offer is pending at

the Rajya Sabha.

y A low cost pension scheme is supposed to be formed by the Pension Fund Regulatory

and Developmental Authority (PFRDA) on 1st April, 2010 to provide social security to the

the poorer class.


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y The compulsory ceding by every General Insurance Corporation (GIC), would go on to

stay at 10% under current regulations as specified by IRDA.

FUTURE OF INDIAN INSURANCE MARKET

As per the report of 'Booming Insurance Market in India' (2008-2011), concentration of

insurance markets in many developed countries of the world has made the Indian insurance

market more magnetic in terms of international insurance players. Furthermore, the report says

y Home insurance sector is likely to achieve a 100% growth since home insurance are

made compulsory for housing loan approvals by the financial institutions.

y In the coming three years Health insurance sector is all set to become the second

largest business after motor insurance.


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y During the period of 2008-09 to 2010-11 the non life insurance premium is likely to have

a growth of 25%.

COMPANY PROFILE

ICICI Bank is Indias second-largest bank with total assets of about Rs.112.024 crore and a

network of about 450 branches and offices and about 1750 ATMs. ICICI Bank offers a wide

range of banking products and financial services to corporate and retail customer through a

variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of

investment banking, life and non-life insurance, venture capital, asset management and

information technology. ICICI Banks equity shares are listed in India on stock exchanges

atChennai. Delhi, Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock

Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New


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York Stock Exchange (NYSE).ICICI Bank was originally promoted in 1994 by ICICI Limited, an

Indian financial institution, and was its wholly owned subsidiary. ICICIs shareholding in ICICI

Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity

offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Banks acquisition of Bank

of Mathura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by

ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the

initiative of the World Bank, the Government of India and representatives of Indian industry. The

principal objective was to create a development financial institution for providing medium term

and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its

business from a development financial institution offering only project finance to a diversified

financial services group offering a wide variety of products and services, both directly and

through a number of subsidiaries and affiliates like ICICI Bank, In 1999, ICICI become the first

Indian company and the first bank or financial institution from non-Japan Asia to be listed on the

NYSE.

After consideration of various corporate structuring alternatives in the context of the emerging

competitive scenario in the Indian banking industry, and the move towards universal banking,

the management of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI

Bank would be the optimal strategic alternative for both entities, and would create the optimal

legal structure for the ICICI groups universal banking strategy. The merger would enhance

value for ICICI shareholders through the merged entitys access to low-cost deposits, greater

opportunities for earning fee-based income and the ability to participate in the payment system

and provide transaction-banking services. The merger would enhance value for ICICI Bank

shareholders through a large capital base and scale of operations, seamless access to ICICIs

strong corporate relationships built up over five decades, entry into new business segments,

higher market share in various business segments, Particularly fee-based services, and access

to the vast talent pool of ICICI Bank approved the merger of ICICI and two of its wholly-owned


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retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services

Limited, With ICICI Bank.

Shareholders of ICICI and ICICI BANK approved the merger in January 2002, by the High Court

of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and

the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI groups financing

and banking operations, both wholesale and retail, have been integrated in a single entity. 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 equivalent) rating from all Leading Indian

rating agencies.

Prudential P.L.C.

Established in 1848, today prudential plc is a leading international financial services company

with some 16 million customers, policyholders and unit holders and some 20,000 employees

worldwide. In the UK Prudential is a leading life and pensions provider with around seven million

customers. M&G was acquired by Prudential in 1999 and is the Groups UK and European fund

manager, responsible for managing over of 111 billion of funds (as at December 2003).

Launched by Prudential in 1998, Egg is an innovative financial services company, with over

three million customers, with nearly six per cent of UK credit card balances. In Asia, Prudential

is the leading European life insurer with 23 life and fund management operations in 12 countries

serving some five million customers. In the US, Prudential owns Jackson National Life, a

leading life insurance company, and has more than 1.5 millions policies and contracts in force.

Prudential has brought to market an integrated range of financial services products that now

includes life assurance, pensions, mutual funds, banking, investment management and general


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insurance. In Asia, Prudential is UKs Largest life insurance company with a vast network of 22

life and mutual fund operations in twelve countries China, Hong Kong, India, Indonesia,

Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. Since 1923,

Prudential has championed customer-centric products and services, supported by over 60,000

staff and agents across the region.

Prudential plcs strong mix of business around the world positions us well to benefit form the

growth in customer demand for asset accumulation and income in retirement. Our international

reach and diversity of earnings by geographic region and product will continue to give us

significant advantage.Our commitment to the shareholders who own Prudential is to maximize

the value over time of their investment. We do this by investing for the long term to develop and

bring out the best in our people and our businesses to produce superior products and services,

our international peer group in terms of total shareholder returns.

At Prudential our aim is lasting relationships with our customers and policyholders, through

products and services that offer value for money and security. We also seek to enhance our

Companys reputation, built over 150 years, for integrity and for acting responsibly within

society.

ICICI Prudential Life Insurance:

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 from insurance Regulatory Development Authority

(IRDA).

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


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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 banc assurance tie-ups.

Today the company is the number one private life insurer in the country.

Board Committees

Audit Committee Board Governance &

Remuneration Committee

Mr. Sridar Iyengar

Mr. Narendra

Murkumbi

Mr. M. K. Sharma

Mr. N. Vaghul

Mr. Anupam Puri

Mr. M. K. Sharma

Mr. P. M. Sinha

Prof. Marti G. Subrahmanyam

Customer Service

Committee

Credit Committee

Mr. N. Vaghul

Mr. Narendra Murkumbi

Mr. M .K. Sharma

Mr. P. M. Sinha

Mr. K. V. Kamath

Mr. N. Vaghul

Mr. Narendra Murkumbi

Mr. M .K. Sharma

Mr. P. M. Sinha

Mr. K. V. Kamath


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Fraud Monitoring

Committee

Risk Committee

Mr. M. K. Sharma

Mr. Narendra

Murkumbi

Mr. K. V. Kamath

Ms. Kalpana

Morparia

Ms. Chanda D.

Kochhar

Mr. N. Vaghul

Mr. Sridar Iyengar

Prof. Marti G. Subrahmanyam

Mr. V. Prem Watsa

Mr. K. V. Kamath

Share Transfer &

Shareholders'/

Investors'

Grievance

Committee

Asset-Liability Management

Committee

Mr. M. K. Sharma

Mr. Narendra

Murkumbi

Ms. Kalpana

Morparia

Ms. Lalita D. Gupte

Ms. Kalpana Morparia

Ms. Chanda D. Kochhar

Dr. Nachiket Mor


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Ms. Chanda D.

Kochhar

Committee of

Directors

Mr. K. V. Kamath

Ms. Lalita D. Gupte

Ms. Kalpana

Morparia

Ms. Chanda D.

Kochhar

Dr. Nachiket Mor

ICICI PRUDENTIAL PRODUCTS PROFILE


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Insurance solution for individuals

ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet

the needs of customers at every life stage. Its 17 products cab is enhanced with up to 6 riders,

to create a customized solution for each policyholder.

Savings Solutions

Secure plus is a transparent and feature-packed savings plan that offers 3 levels of protection.

Cash Plus is a transparent, feature-packed savings plan that offers 3 levels of protection as well

as liquidity options. Save n Protect is a traditional endowment savings plan that offers life

protection along with adequate returns. Cash Back is an anticipated endowment policy ideal for

meeting milestone expenses like a childs marriage, expenses for a childs higher education or

purchase of an asset.

Protection Solutions

LifeGuard is a protection plan, which offers life covers at very low cost. It is available in 3

coupons level term assurance, level term assurance with return or premium and single

premium.

Child Solutions

Smart kid child plans provide guaranteed educational benefits to a child along with life insurance

cover for the parent who purchases the policy. The policy is designed to provide money at

important milestones in the childs life. Smart Kid child planed are also available with in unit-

linked form both single premium and regular premium.


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Market-linked Solutions

LifeLink is a single premium Market Linked Insurance Plan, which combines life insurance cover

with the opportunity to stay, invested in the stock market. Life Time offers customers the

flexibility and control to customize the policy to meet the changing needs at different life stages.

It offers 3 investment options Growth Plan, Income plan and Balance plan.

Retirement Solutions

Forever Life is a retirement products targeted at individual in there thirties. Secure Plus Pension

is a flexible pension plan that allows one to select between 3 levels of cover.

Market-linked retirement products

Life Time Pension is a regular premium market-linked pension plan. Life Link Pension is a single

premium market linked pension plan. ICICI Prudential also launched Salaam Zindagi, a social

sector group insurance policy targeted at the economically underprivileged sections of the

society.

Group Insurance Solutions

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance

benefits to their employees.

Group Gratuity Plan

ICICI Prus group gratuity plan helps employers fund their statutory gratuity obligation in a

scientific manner. The plan can also customize to structure schemes that can provide benefits

beyond the statutory obligations.


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Group Superannuation Plan

ICICI Bank offers flexible defined contribution superannuation scheme to provide a retirement

kitty for each member of the group. Employees have the option of choosing from various annuity

options or opting for partial commutation of the annuity at the time of retirement.

Group Term Plan

ICICI Prus flexible group term solution helps provides affordable cover to members of group.

The cover could be uniform or based on designation/rank or a multiple of salary. The benefit

under the policy is paid to the beneficiary nominated by the member on his/her death.

Flexible Rider Options

ICICI Pru Life offers flexible riders, which can be added to the basic policy at marginal cost,

depending on the specific of the customer.

Accident & disability benefit: If death occurs as the result of an accident during the term of

the policy, the beneficiary receives an additional amount equal to the sum assured under the

policy. If the death occurs while traveling in an authorized mass transport vehicle, the

beneficiary will be entitled to twice the sum assured as additional benefit.

Accident benefit: This rider option pays the sum assured the rider on death due to accidents.

Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified

critical illnesses. Benefits are payable to the insured for medical prior to death.

Major Surgical Assistance Benefits: provides financial support in the event of medical

emergencies, ensuring that benefits are payable to the life assured for medical expenses


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Incurred for surgical procedures. Cove is offered against 43 different surgical procedures.

Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till

maturity, in the event of the death of the life assured. It is available on SmartKid, SecurePlus

and Cashplus.

Waiver of Premium: In Case of total and permanent due to an accident, the premiums are

waived till maturity. This rider is available with Secure Plus and Cash Plus.

India and the World Market:

Unfortunately, the progress achieved by the life insurance industry in India, it compares

unfavorably not just with the developed countries. But also even with the developing world. The

global market for the life insurance is estimated to be around $ 1412.3 billions.

PORTERS FIVE-FORCE ANALYSIS

Porters fives forces model is an excellent model to use to analyze a particular environment of an

industry. So for example, if we were entering the PC industry, we would use porters model to

help us find out about:

1.Competitive Rivalry

2.Power of suppliers

3.Power of buyers

4.Threats of substitutes

5.Threat of new entrants.

The above five main factors are key factors that influence industry performance; hence it is


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common sense and practical to find out about these factors before you enter the industry. Lets

look at them below.

Competitive rivalry

A starting point to analyzing the industry is to look at competitive rivalry. If entry to an industry is

easy then competitive rivalry will likely to be high. If it is easy for customers to move to

substitute products for example from coke to water then again rivalry will be high. Generally

competitive rivalry will be high if:

There is little differentiation between the products sold between customers.

Competitors are approximately the same size of each other.

If the competitors all have similar strategies.

It is costly to leave the industry hence they fight to just stay in (exit barriers).

Power of suppliers

Suppliers are also essential for the success of an organization. Raw materials are needed to

complete the finish product of the Organisation. Suppliers do have power. This power comes

from:

If they are the only supplier or one of few suppliers who supply that particular raw material.

If it costly for the organisation to move from one supplier to another (known also as switching

cost).

If there is no other substitute for their product.

Power of buyers

Buyers or customers can exert influence and control over an industry in certain circumstances.

This happens when:

There is little differentiation over the product and substitutes can be found easily.


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Customers are sensitive to price.

Switching to another product is not costly.

Threat of substitutes

Are their alternative products that customers can purchase over your product that offer the

same benefit for the same or less price? The threat of substitute is high when:

Price of that substitute product falls.

It is easy for consumers to switch from one substitute product to another.

Buyers are willing to substitute.

Threat of new entrant

The threat of a new organisation entering the industry is high when it is easy for an organisation

to enter the industry i.e. entry barriers are low.

An organisation will look at how loyal customers are to existing products, how quickly they can

achieve economy of scales, would they have access to suppliers, would Government legislation

prevents them or encourages them to enter the industry. Legislation prevents them or

encourages them to enter the industry.


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PORTERS FIVE-FORCE OF INSURANCE INDUSTRY

Competitive rivalry:

There is cut thought competitions among rivals in life insurance industry.

There are mainly 13 private organizations and 1 public organization in life insurance

competition.

Insurance companies deal in identical policies as service levels offered are similar.

Ministry of finance controls all the insurance companies that are in the industry at present

hence there are less chance of exit.

Power of suppliers:

Policy designer tend to have less leverage to Bargain over premium.

Insurance is tax exempted so that suppliers bargaining power increases.

Solvency of private players is not certain.

Threat of Substitutes:

Customers deposits in their amount in to bank & post deposits &

Purchase gold & silver

Investment in government securities

Money market investment

Capital market investment

Power of buyer:

Market is highly segmented


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Insurance industry very return oriented and switches easily

High switching cost creates buyers lock in and makes a buyers bargaining power

Exercise bargaining leverage over premium

Threat of new entrants:

Life insurance industry entry barriers is moderate

The Indian market is highly brand oriented .so it is difficult to introduce new brand

The acceptability of new brand is also very low

Economies of scale is difficult to find in the initial stage of entry in to market

Special permission is required from the government to enter in the insurance sector.

SHARE OF PRIVATE INSURANCE PALYERS

As per the figure available with IRDA reports for the period ended in August 2005, the 13 private


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players have grabbed nearly 26% market share from LIC in terms of premium underwritten as

against 17.70% in August 2004 The list of insurer with premium underwritten, investment and

their market share have been presented in table.

Table shows that the life insurance market has collected Rs. 16,604cr as a fresh premium. It

grew about 2.8 times bigger than he 3 players put together in terms of premium collection. It is

still growing at the rate 26% per annum. It is relevant to that the market share by them. Out of

13 Pvt. Players, ICICI prudential has leading Pvt. Player in the Life insurance, invested Rs. 625

cr which is the highest investments among the private players and captured first position with

7.11% of the market share. Secondly, Max New York life has invested Rs. 305 cr and had failed

to capture the second position in terms of market share and was satisfied with only 1.32%

Followed by HDFC standard Life had invested Rs. 255 cr and 2.96% of the market share was

captured and stood third position interims of investments and capturing market share. Allianz

Bajaj has invested Rs. 250 cr and stands fourth in terms of investment but captured second

position with 6.12% of the market share. This indicates that there is no relation between

investment and acquiring market share and mere capital is not alone playing any significant role

in terms of capturing market share. There may be some other variables like: (a) innovative

schemes, (b) brand loyalty, (c) professionaloutlook, (d) transference in their transactions, etc. It

can be noticed that the capital is not playing any attaching, kindly significant role in terms of

premium collection and capturing market share. It seems to be Bajaj Allianz would occupy the

first position in near future in terms of market share as well as annual growth rate.

Chart 1 shows that. Among private players, the ICICI prudential has captured the 28% of the

market share up to December 2005, followed by Allianz Bajaj with 23% and HDFC Standard

Life with 11% TATA Aig life and Birla Sunlife with 7% each and remaining other players have

captured less than 5% of market share.


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It is interesting to note that Allianz Bajaj has achieved 264.09% annual growth rate in terms of

premium collection and the fastest growing insurance players, followed by HDFC Standard with

143.1% and Metlife with 136.45%, and remaining other players have doubled their premium in a

span of one year, whereas Birla Sunlife and SBI life have failed to collect the premium

consistently and registered negative growth rates 7.93% and 2.48% respectively. Surprisingly,

ICICI Prudential Co. has not been retrained in their leading position in 2005.

The market share of the LIC has been declining since 2000, after opening up of the sector to

private companies, LICs higher market share in the number of policies sold compared with

premium income, so it is to be inferred that the private players are cornering a larger share of

high premium policies. Further all policymakers are expected that, insurance business will take

wings under banc assurance but despite the belief SBI Life was registered negative 2.48%

annual growth rate in corresponding period. It is need to be viewed serious by the RBI and

IRDA authorities.

28%

5%

11%

23%

7%

7%

3%4%

2%

6%

2% 2%

LIC

ICICI Pru. Life

New York MaxLife

HDFC Standard Life

Alliance Bajaj

TATA AIG

OM Kotak Mahindra

AVIVA Life

ING Vysya


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INSURANCE ADVISOR

Persons who sell insurance policies, for a single insurance company, in return for a

commission are called ADVISORS.

Insurance Advisors are the bridge or the channel partners between the policyholder and

insurance company. They make the base for the insurance company. In other words, it can be

said that advisors are those people in the organization who can give business to the company.

They are the representatives of an insurance company who sells insurance. An

insurance advisor locates prospective insurance customers, determines the insurance

needs of each customer, and assists the customer in applying for insurance. Typically,

an insurance advisor will deliver the policy when the application is approved, will collect

the initial premium, and will provide customer service to policy owners. An advisor is

also called a field underwriter or a life underwriter.

WHY TO BE AN ADVISOR?

No start up capital required

Flexible working environment

Be your own boss

Unlimited earning potential


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To be part of a world-class team

WHO CAN BE THE ADVISORS?

While making advisors for the company, certain characteristics have to be kept in mind.

They are as under:

A person should be between the age group of 25-40 years.

Should be a graduate or old SSC Pass.

Should preferably be married.

Should be a localite.


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Apart from this, there is a certain target audience that has to be targeted:

Chartered Accountants

Company Secretaries

Tax Consultants

Businessmen

Beauty Parlors

Management Consultants

Advocates

Engineers

Tour and Travels owners

Air ticket bookings

Two and Four wheeler finance companies

Courier services

Retailers of different products

Computer Hardware Business

Software Business

Furniture shops


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REVIEW OF LITERATURE

ICICI Prudential Life Insurance Company

ICICI Prudential Life Insurance is one of the largest Insurance networks in the country, and 2 nd

Life Insurance Company in India. The ICICI Group has been in existence since 1955 when ICICI

Ltd., was created. ICICI Prudential started in 2002 as subsidiary of ICICI Ltd., Today ICICI Life

Insurance has a customer base of 4 million with total assets exceeding Rs.1, 00,000 Cr. making

it the 2nd largest life insurance company in the country, next only to LIC.

The Insurance sector, after the opening up, provides greater opportunities. Several

global players have emerged and the market has changed significantly. In the changed

scenario, the expectation is that the low Insurance premium as a percentage of GDP prevailing

in India will improve and will offer better opportunities to the insurance players.

Life Insurance sector is one of the key areas where enormous business potential exists. In

India currently the life insurance premium as a percentage of GDP is 1.3 per cent against 5.2

per cent in the US, but in the liberalized

scenario, the life insurance premiums were projected to grow at around 18% to 20% from Rs

215 billion in 1998- 99 to Rs 592 billion in 2004-05 and to Rs.

1450 billion by 2009-10. Corporate non-life premium was projected to grow from Rs. 84 billion in

1998-99 to Rs 386 billion in 2009-10 and personal line non-life from Rs 4 billion to Rs 51 billion.


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In the life Insurance segment the Life Insurance Corporation of India (LIC) is the major

player. The LIC has 2050 branches. It is constituted in to seven Zones. Currently there are 5,

60,000 LIC agents in India. General Insurance is another segment, which has been growing at a

faster pace.

Max New York Life Insurance Company

New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest

mutual life insurance company in the United States and one of the largest life insurers in the

world. Headquartered in New York City, New York Lifes family of companies offer life

insurance, annuities and long-term care insurance. New York Life Investment Management LLC

provides institutional asset management and retirement plan services. Other New York Life

affiliates provide an array of securities products and services, as well as institutional and retail

mutual funds.

The mission of New York Life is to maintain its superior 'financial strength', adhere to the highest

standards of 'integrity' and demonstrate 'humanity' by treating its customers, agents and

employees with compassion, consideration and respect.

New York Life is one of the largest and strongest life insurance companies in the world with

more than USD$215 billion assets under management and has received among the highest

ratings for financial strength from the life insurance industry's principal rating agencies: A.M.

Best (AA+), Standard & Poor's (AA+), Moody's (Aa1), Fitch (AAA). According to Moody's, "New

York Life's rating reflects the company's good quality investment portfolio, ample liquidity, and

sound capitalization, as well as the good growth potential of its international business.


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As a leader in the insurance industry, New York Life continues to bring to its operations new

management concepts, advanced technologies, new distribution and training systems and

innovative insurance products.

HDFC Standard Life

HDFC Standard Life, one of India's leading private life insurance companies, offers a

range of individual and group insurance solutions. It is a joint venture between Housing

Development Finance Corporation Limited (HDFC), India's leading housing finance

institution and Standard Life plc, the leading provider of financial services in the United

Kingdom.

HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of

equity in the joint venture, while others hold the rest.

HDFC Standard Life's product portfolio comprises solutions, which meet various

customer needs such as Protection, Pension, Savings, Investment and Health.

Customers have the added advantage of customizing the plans, by adding optional

benefits called riders, at a nominal price. The company currently has 32 retail and 4

group products in its portfolio, along with five optional rider benefits catering to the

savings, investment, protection and retirement needs of customers.

HDFC Standard Life continues to have one of the widest reaches among new insurance

companies with 568 branches servicing customer needs in over 700 cities and towns.

The company has a strong presence in its existing markets with a base of 2,00,000

Financial Consultants.


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Life Insurance Corporation of India

Life Insurance in its modern form came to India from England in the year1

81

8. Oriental Life

Insurance Company started by Europeans in Calcutta was the first life insurance company on

Indian Soil. All the insurance companies established during that period were brought up with the

purpose of looking after the needs of European community and these companies were not

insuring Indian natives. The first two decades of the twentieth century saw lot of growth in

insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose

to1

76 companies with total business-in-force as Rs.298 crore in1938. It worked wonders with

the performance of the corporation. It may be seen that from about 200.00 crores of New

Business in 1957 the corporation crossed 1000.00 crores only in the year1969-70, and it took

another10 years for LIC to cross 2000.00 crore mark of new business. But with re-organization

happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum

Assured on new policies.

Birla Sun Life Insurance Company

Established in 2000, Birla Sun Life Insurance Company Limited (BSLI) is a joint venture

between the Aditya Birla Group, a well-known and trusted name globally amongst Indian

conglomerates and Sun Life Financial Inc, leading international financial services organization

from Canada. The local knowledge of the Aditya Birla Group combined with the domain

expertise of Sun Life Financial Inc., offers a formidable protection for its customers future.

The extensive reach through its network of 600 branches and 1,75,000 empanelled advisors.

This impressive combination of domain expertise, product range, reach and ears on ground,

helped BSLI cover more than 2 million lives since it commenced operations and establish a

customer base spread across more than 1500 towns and cities in India. To ensure that our


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customers have an impeccable experience, BSLI has ensured that it has lowest outstanding

claims ratio of 0.00% for FY 2008-09. Additionally, BSLI has the best Turn Around Time

according to LOMA on all claims Parameters. Such services are well supported by sound

financials that the Company has. The AUM of BSLI stood at Rs. 8165 crs as on February 28,

2009, while as on March 31, 2009, the company has a robust capital base ofRs. 2000 crs.

SBI Life Insurance

SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Assurance.

SBI owns 74% of the total capital and BNP Paribas Assurance the remaining 26%. SBI Life

Insurance has an authorized capital of Rs. 2,000 crores and a paid up capital of Rs 1,000

crores.

Along with its 5 Associate Banks, State Bank Group has the unrivalled strength of over16,000

branches across the country, arguably the largest in world.

BNP Paribas is the 1st largest French company and ranks 5th in the banking industry

worldwide, 1st bank in Euro Zone as per Global 2000 Forbes 2008. It is 6th most valuable

international banking brand as per Brand Finance 2008.BNP Paribas Assurance is the

insurance arm of BNP Paribas. BNP Paribas, part of the worlds top 10 group of banks by

market value and part of Europe top 3 banking companies, is one of the oldest foreign banks

with a presence in India dating back to 1860. BNP Paribas Assurance is the fourth largest life

insurance company in France, and a worldwide leader in Creditor insurance products offering

protection to over 50 million clients. BNP Paribas Assurance operates in 41 countries mainly

through the banc assurance and partnership model.


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RESEARCH METHODOLOGY

Objective-

Main objective of the project is to find out the strategies of different insurance agencies and

to evaluate them. Conclusion of this project can give an idea how strategies of different

companies will work. Now days all the insurance companies are trying to establish

themselves in the competitive market. They are introducing innovative marketing strategies

to survive in the market. Many other private companies are looking to enter in the insurance

market, so it is very essential to a company to innovate their marketing strategies in terms of

Recruiting their advisors

To make their advisors active

Well educated and capable employee in the agency


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Marketing of their products

Deployment of their products

Targeting the right and potential customers

Differentiating from other companies

Future plan of the company

This study tries to find out the marketing strategies of different insurance companies. This

research requires the interview of branch managers of different insurance companies and

find out their branches are working in terms of above-mentioned factors.

Sampling Area:

The sampling areas of this research are Jaipur.

Sample size:

The judgment samples size was 50 in which 50% people were salaried, 30% were

students and 20% were self- employed.

In this section of my project, the requirement is to describe the sources of collecting

primary and secondary data. For collecting primary data, method adopted was focus

group method.


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Sampling

Sample will be taken by judgment sampling. Judgment sampling is a process in which the

selection of a unit, from the population is based on the pre judgment. This research requires the

survey of different insurance agencies. So research concentrates on the branch or agency

manager of different insurance companies.

Methodology-

Research is based on primary data. Secondary data can be used only for the reference.

Research will be done based on primary data and will collect primary data with the branch

and agency manager of different insurance agencies and branches. Giving structured

questionnaire will do data collection. This study is based on judgment sampling.


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DATA ANALYSIS & FINDINGS

Q.1.Do you have a Life Insurance Policy?

Criteria No. Of Respondents

Yes 50

No 0

As our sample is those people who have insurance so all the respondents are falling under the

Yes criteria.

Q.2.Which Companys Insurance Policies do you have?

Company No. of Respondents

LIC 50

Birla Sunlife 2

SBI 3


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ICICI Pru. Life 10

Kotak Mahindra 3

Post Office 15

HDFC 3

As from the above chart it is very clear the all of the respondents have an insurance of the LIC

while some of them have an insurance of the other companies like post Office, ICICI Prudential

Life insurance Co., HDFC Co.

Etc.

The reason behind this is that the LIC competitor since more than four decades and the Indian

Govt. allowed the Introduction of private player in Insurance in the year 2000.

0

10

2030

40

50

60

No. of Respondents

No. of Respondents


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Q.3What is amount of insurance premium you pay annually?

Criteria No. of Respondents

Below Rs. 10,000 11

10,000 to 20,000 18

20,000 to 30,000 6

30,000 to 40,000 5

Above 40,000 10


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The analysis of the above available data is merely to find out the percentage of income that one

is willing to invest in insurance.

Q.4Whatpriorities would you consider most important,while purchasing a policy?

Criteria/Rank 1 2 3 4 5 Total

Death Benefit 29 10 6 2 3 50

Childrens

Future

7 13 21 3 0 44

Retirement

Planning

5 5 6 20 7 43

0

2468

1012

14161820

No. of Respondents

No. of Respondents


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Tax Planning 8 18 8 8 6 48

Financial 2 5 3 11 25 46

From the table and chart it can be say that most of the people rank death benefit first for the

decision to make investment in Insurance. Their second priority is tax planning because the

premium, which is paid by the people towards Insurance, is deductible up to certain limit from

the income and also the maturity amount is also tax free. The third and fourth priorities are

childrens future and retirement planning.

Q.5Do you have any knowledge of the stock market?


0

10

20

30

40

50

60

1

2

3

45

Total


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Yes 32

No 18

Q.6If Yes do you have any knowledge about unit linked insurance plans?


Yes 25

No 7

The question number 5 and 6 are designed to know the awareness of people who have

knowledge of share market or deals in shares also have the knowledge of the new modern

insurance product i.e. Unit Linked Insurance

Plan. From the available data it can be say that those who deal in shares are also aware of the

ULIP.

Q.7Is your current Insurance policy Unit Linked or Traditional?


Only Unit Linked 0

Only Traditional 39


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Both 11

From the Q. No. 7 we can say that even though the modern products available in the market

since more than two years and which are having the more flexibility and also giving the higher

return than traditional one most of the people do not have or may be not aware of it which

shows the lack of brand awareness and it requires an aggressive promotional efforts on the part

of company.

There is a lot of scope available for the company to attract more customers by giving or

introducing most suitable ULIP products and at the same time increase the customer base.

Q.8If given a choice, where would you like to invest your money?

(Please Rank Your Choice)

Choice/Rank 1 2 3 4 5 6 7 8 Total

Mutual Fund 0 1 5 1 25 12 5 1 50

Insurance 4 12 14 4 8 3 0 0 45

Gold 4 8 1 2 2 5 13 13 48

Equities 17 3 0 5 2 6 1 0 34

Post Office 22 12 12 2 2 0 0 0 50

Debenture 0 2 4 10 1 14 2 0 33

Bank Deposit 0 6 12 19 1 0 3 1 42

Other 10 5 0 2 1 0 0 2 20


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This question is mainly designed to know the investment priorities of the people of Jaipur town.

The objective behind this Q. is that after the Charotar Nagrik Co-operative Bank and other

Credit Societies, which are giving higher interest on deposits, the whole scenario of city is

changed. Most of the people prefer to invest in post office saving schemes and where their

money is safe even though the return is very less. So there is a great need to divert the efforts

of the company towards the safety and security as ICICI Prulife is a private insurance Company.

Q.9According to you what are the factors that would affect you decision while

purchasing an insurance policy?

Criteria/Rank 1 2 3 4 5 50

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 Total

Mutual Fund

Insurance

Gold

Equities

Post Office

Debenture

Bank Deposit

Other


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But we can say that the most affecting factors to the prospect are return and safety. As per the

finance theory risk and return goes in hand in hand but as far as insurance is concerned it is all

about the compatible and safe returns over others.

Q. 10Are you or ay of your family members are planning to buy an insurance policy in

near future?


Yes 13

No 37

This question is taken to collect the information of those respondents who are going to plan to

purchase insurance within near future that is used by the company for making personal contact

for sale.

Q. 11Are your needs satisfied with your current investment in insurance?



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Yes 10

No 30

Q. 11(a)If No, then gives reasons?


High Premium 0

Low Return 1

Poor Services 7

Others 2


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The question No.11 and 12 are designed to know the percentage of people who are not

satisfied with the current investment in insurance and also to know the reasons behind it. So

that the company can focus on those areas where the competitors fail. Because now a days the

competition is very stiff in the insurance industry. All companies are trying to attract more

customers by anyhow. So it will be useful for designing the promotional schemes of the

company.

From the above table and chart it can be seen that the respondents who are dissatisfied give

the main reason behind it are poor services. There are many others reasons like more time

taken by the company for claim settlement, no displacement of cheques and other important

vouchers, etc. So the company can improve upon these and increase its market share by

offering quality service tothe customers.

Q. 12.Do you know anything ICICI Prudential Life Insurance?

13%10%

47%

30%

No. of Respondents

Television

e

s a er

Sales Re resentative

Others source


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Yes 30

No 20

Q. 13If Yes, from where did you come to know about the company?


Television 4

News Paper 3

Sales Representative 14

Others source 9


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Q. 14 What do you feel about ICICI Prudential Life Insurance?

(Open Ended)

The question No.13 and 14 are designed to know the company awareness the respondents of

the city and also the source of awareness. But I felt very much difficulty while filling up these

questions because most of the people know about the company but they know it as an ICICI

Bank not as adifferent identity. So there is a great need to design the advertisement campaignin

such a way that it will create the different image of the company. The main reason behind this is

that the image of ICICI Bank in city is such that most of the people ask for charges first than the

service that it provides.

CONCLUSIONS & RECOMMENDATIONS

13%10%

47%

30%

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

1 2 3 4 5 6 7 8 9

No. of Respondents


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11. Try to collect data of Life/General insurance agents across India and invite them to

associating with ICICI Prudential.

LIMITATIONS

Companies did not disclose their secrets data and strategies.

Possibility of Error in data collection.

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


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BIBLIOGRAPHY

Kothari C.R.Research Methodology-methods and techniques. Third edition, 2005

Kotler Philips, Marketing Management. Eleventh revised edition, 2002

Web sites

www.icici.com

www.irdaindia.org

www.indiacore.com


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www.iciciprulife.com

Magazines

Business India

Economic Times

Material provided by the company

Survey

Search Engines

www.google.com

www.yagoohoogle.com

www.altavista.com

APPENDIX I

Questionnaires

Q.1. Do you have a Life Insurance Policy?

Yes ( ) No ( )

Q.2. Which Companys Insurance Policies do you have?

(Please specify the numbers)

LIC ( ) SBI Life Insurance ( )


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HDFC Standard Life ( ) New York MaxLife ( )

Birla Sunlife ( ) Alliance Bajaj ( )

Cholamandalam ( ) ICICI Pru. Life Insurance ( )

TATA AIG Insurance ( ) MetLife Insurance ( )

ING Vysya ( ) OM Kotak Mahindra ( )

AVIVA Life ( ) AMP Sanmar ( )

Q.3 what is amount of insurance premium you pay annually?

Amount

Q.4 What priorities would you consider most important, while purchasing apolicy?


Death Benefit ( )

Childrens Education ( )

Retirements Benefit ( )

Tax Planning ( )

Financial Planning ( )

All of above ( )

Q.5 have you any knowledge of the stock market?

Yes ( ) No ( )


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Q.6 If Yes do you have any knowledge about unit linked insurance plans?

Yes ( ) No ( )

Q.7 Is your current Insurance policy Unit Linked or Traditional?

Yes ( ) No ( )

Q.8 If given a choice, where would you like to invest your money?


Mutual Funds ( ) Post Office Schemes ( )

Insurance Policies ( ) Debentures ( )

Gold ( ) Banks (FDs etc.) ( )

Equities ( ) If other (specify) ___________

Q.9 According to you what are the factors that would affect you decision while

purchasing an insurance policy?(Please Rank Your Choice)

Premium ( )

Return ( )


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Safety ( )

Liquidity ( )

Market Condition ( )

Q. 10 Are you or any of your family members are planning to buy an insurance policy in

near future?

Yes ( ) No ( )

Q. 11 Are your needs satisfied with your current investment in insurance?

Yes ( ) No ( )

Q. 11 (a) If No, then give reasons?

High Premium ( ) Poor Services ( )

Low Return ( ) Other Reasons___________

Q. 12 Do you know anything ICICI Prudential Life Insurance?

Yes ( ) No ( )

Q. 13 If Yes, from where did you come to know about the company?

T.V. ( ) Newspaper ( ) Magazine ( )


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Radio ( ) Internet ( ) Hoarding ( )

Others (Please Specify)_____________________________

Q. 14 What do you feel about ICICI Prudential Life Insurance?

______________________________________________________________

APPENDIX - II

PROJECT SYNOPSIS

ON

Problem and prospects of Insurances agencies(Rajasthan)

By

Narpal Singh Chauhan

Enrolment No: - 2490900039

In partial fulfillment of the requirements of Second year MBA curriculumOf Two years Full time MBA

(Industry Integrated) ProgramUnder the guidance of


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Prof. Lakshman

ANNAMULAI UNIVERSITY

Through

RAMAIAH INSTITUDE OF MANAGEMENT STUDIES

Title-

Problem and Prospects of Insurance agencies. (Rajasthan)

Problem Statement-

Different agencies of different insurance companies are having some strategies to survive in the

market. Their strategies may be in the form of:

How they target their customers.

How they make their advisors active.


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How they make their operational and sales department effective.

How they promote their employees.

How they handle the conflict in agency.

Objective-

Main objective of the project is to find out the strategies of different insurance agencies and

to evaluate them. Conclusion of this project can give an idea how strategies of different

companies will work. Now days all the insurance companies are trying to establish

themselves in the competitive market. They are introducing innovative marketing strategies

to survive in the market. Many other private companies are looking to enter in the insurance

market, so it is very essential to a company to innovate their marketing strategies in terms of

Recruiting their advisors

To make their advisors active

Well educated and capable employee in the agency

Marketing of their products

Deployment of their products

Targeting the right and potential customers

Differentiating from other companies

Future plan of the company


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This study tries to find out the marketing strategies of different insurance companies. This

research requires the interview of branch managers of different insurance companies and

find out their branches are working in terms of above mentioned factors.

Methodology-

Research is based on primary data. Secondary data can be used only for the reference.

Research will be done based on primary data and will collect primary data with the branch

and agency manager of different insurance agencies and branches. Data collection will be

done by giving structured questionnaire. This study will be based on judgment sampling.

Sampling

Sample will be taken by judgment sampling. Judgment sampling is a process in which the

selection of a unit, from the population is based on the pre judgment. This research requires

the survey of different insurance agencies. So research concentrates on the branch or

agency manager of different insurance companies.

Limitations-

Companies did not disclose their secrets data and strategies.

Possibility of Error in data collection.

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


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Documents

Icici Pru Report