Pranav Bansal Project

8/4/2019 Pranav Bansal Project

http://slidepdf.com/reader/full/pranav-bansal-project 1/66

Summer Project ReportOn

On study of all managerial departments & financial analysis

of

ICICI Prudential Life Insurance

Prepared by:

Pranav Bansal(MBA-III)

Project Guide:

Mr. Ashutosh Gupta

Submitted to:

Miss. Monika Hanspal

GNA-IMT

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PrefaceAn Industrial, Business or service organization by taking up a project study is most

important part of our MBA course & is must as per the syllabus prescribed by GNA-

IMT. Our MBA course is of administrative and managerial activity of industrial,

Business or service organization. The main objective of this project study is to help

the student to develop ability to practical technique to solve real life problem related

industrial, Business or Service organization.

According to the rules, I have taken my summer training in ICICI Prudential Life

Insurance. Our gardeners, professors and banks sum manager’s gives the knowledge

and guidance of this bank to us.

The summer training programmed for student of MBA training is for six weeks in the

time of summer vacation theoretically knowledge and class room discussion is not

sufficient for the student but training given them practical and day to day working of

company.

In this project report I had tried to analyze the needs of the customers and suggest

them the most suitable insurance solution. As well as I also analyzed the brand

awareness among the people.

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ACKNOWLEDGEMENT

To take training is a part of our BBA programming and is an important part. Training

quit valuable and important aspect to provide practical knowledge student of

management studies.

It was very useful and experience which I got during my training in “ICICI

Prudential Life Insurance”.

I was able to prepare this training report with the co-operation of various people.

First of all I am very much thankful to training in charge professor of our university.

Our project in charge, Mr. Navin Aggarwal, (area manager of ICICI prudential life

insurance, Jalandhar) who has given me an opportunity and Miss Pinki Gupta(Unit

Manager) & all consultant trainers of ICICI prudential life insurance Jalandhar, who

helped me very much in preparing the report by their guidance.

Thanking you

Amit Kumar

3



EXICUTIVE SUMMARY

The economy is highly influenced by the Financial System of the country. The Indian

Financial System has been broadly divided into two segments: the organized and the

unorganized. An investor has a wide array of investment avenues available. Economic well

being in the long run depends significantly on how wisely he invests.

For today’s complex financial scenario a Mutual Fund is the ideal investment option. Markets

for other investment avenues have become information driven. The Mutual Fund Industry in

India began with the setting up of the Unit Trust of India (UTI) in 1964 by the Government of

India. Ever since then this industry has witnessed numerous changes and growth. In 1987

public sector banks and insurance companies were permitted to set up mutual funds.Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation) 1993,

which for the first time established a comprehensive regulatory framework for the mutual

fund industry. Since the private and joint sectors and the share of the private players have set

up then several mutual funds has risen rapidly.

When investors are confronted with an astounding range of products, from traditional bank

deposits to downright shady money-multiplier schemes, it has to be judged on the yardsticks

of return, liquidity, safety, convenience and tax efficiency.

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Objective of the Study

Management as a profession can’t be taught merely in the four walls of classrooms.

Only theoretical knowledge is not sufficient to build competitive managers. Practical

knowledge of the business environment is equally important.

In today business world, insurance sector is running towards its booming stage. This

industry still has many things to come up to, so many changes and opportunities will

be given by insurance industry. So I choose insurance industry for my training

session in B.B.A.

I choose ICICI Prudential Life Insurance is one of those private insurance players

who entered the market before few years and made its own place among all its

competitors.

This report is shows insurance sector & how insurance is most important part of life.

And understand insurance definitions, different providers of life insurance and

comparisons. It also shows ICICI Prudential Life Insurance’s Products.

As a Trainee ICICI Prudential Life Insurance give me very practical knowledge

about life insurance and how to working in organization, How to manage work, how

to maintain relations with top level management as well as colleges and bottom level

management. So, this experience will helpful in future. I am pleased by taken

training at India’s one of the best insurance company.

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NATURE & DEFINITION OF INSURANCE

Insurance i s def ined as a co-operat ive device to spread the loss

caused by a par ti cu la r r isk over a number of persons who a re

exposed to it and who agree to ensure themselves against that risk.

Risk is uncertainty of a f inancial loss . I t should not be confused

with the chance of loss, which is the probable number of losses out

of confused wi th per i l , which i s def ined as the cause of loss or

with hazard, which is a condition, may increase the chance of loss.

Every risk involves the loss of one or other kind. The function of

insurance is to spread the loss over a large number of persons who

are agreed to co-operate each other at the t ime of loss. The risk

cannot be over rated but loss occurring due to a certain risk can be

distributed amongst the agreed persons. They are agreed to share

the loss because the chance of loss is there.

Everybody’s greatest asset during his/her working years is his/her

ability to earn an income. It is important to adequately safeguard

this asset to ensure his/her cash flow will continue in the event of an unexpected disaster . His/her insurance policies will help to

protect him/her (if any) against any unforeseen odds.

There are two kinds of insurance available viz. Life Insurance and

General Insurance.

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FUNDAMENTAL STATEMENT

These are based on economic or business oriented s ince i t is a device

providing financial compensation against risk or misfortune.

In the words o f D. S . Harse ll , “Insurance may be defined as a

social device providing financial compensation for the effects of

mis fortune, the payments being made f rom the accumulated

contribution of all parties participating in the scheme.”

In the words of Robert I . Mehr & Emerson Cammark , “Insurance

is purchased to of fset the r isk resul ting from hazards, which

exposes a person to loss.” In the words of Riegel & Miller , “Insurance is a social device

whereby the uncertain risks of individuals may be combined in a

group & thus made more certain small periodic contributions, by

the individuals providing a fund, out of which, those who suffer

losses may be reimbursed.”

Insurance follows important characteristics.

Sharing of Risks

Insurance is a co-operat ive device to share the burden of r isk , which

may fall on happening of some unforeseen events, such as the death of

head of the family, or on happening of marine perils or loss of by fire.

Co-operative Device

Insurance is a co-operat ive form of d is tr ibuting a certain r isk over a

group of persons who are exposed to i t (Ghosh & Agarwal) . A large

number of persons share the losses arising from a particular risk.

Evaluation of Risk

For the purpose of ascertaining the insurance premium, the volume of

risk is evaluated, which forms the basis of insurance contract.

Payment of happening of specified event

On happening of specif ied event , the insurance company is bound to

make payment to the insured. Happen ing o f the speci fied even t i s

certain in l i fe insurance, but in the case of f ire, marine or accidental

insurance, i t is not necessary. In such cases , the insurer is not l iable

for payment of indemnity.

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Amount of payment

The amount of payment in indemnity insurance depends on the nature of

losses occurred , sub ject to a maximum of the sum insured . In l i fe

insurance, however, a f ixed amount is paid on the happening of someuncertain event or on the maturity of the policy.

Large number of insured persons

The success o f insurance bus iness depends on the large number o f

persons insured agains t s imilar r isk . This wil l enable the insurer to

spread the losses of risk among large number of persons, thus keeping

the premium rate at the minimum.

Insurance is not a gamblingInsurance is not a gambling. Gambling is illegal, which gives gain to

one party & loss to the other. Insurance is a valid contract to indemnity

agains t losses . Moreover, insurable in teres t is present in insurance

contracts & it has the element of investment also.

Insurance is not charity

Chari ty p ays w itho ut con side ra tion b ut in the cas e o f ins uran ce ,

premium is paid by the insured to the insurer in consideration of future

payment.

Protection against risks

Insurance provides protection against risks involved in life, materials &

property. It is a device to avoid or reduce risks.

Spreading of risk

Insurance i s a p lan , which spread the r i sks & losses o f few people

among a large number of people. John Magee writes, “Insurance is a

plan by which large number of people associates themselves & transfer

to the shoulders of all, risks attached to individuals.”

Transfer of risk

Ins uran ce i s a p lan in which the ins ured t rans fe rs h is r is k o n the

insurer. This may be the reason that Mayerson observes, that insurance

i s a d ev ice to t rans fe r s ome eco no mic los ses to the ins urer , and

otherwise such losses would have been borne by the insured themselves.

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Ascertaining of losses

By taking a life insurance policy, one can ascertain his future losses in

terms of money. This is done by the insurer to determining the rate of

premium, which is calculated on the basis of maximum risks.

A contract

Insurance is a legal contract between the insurer & insured under which

the insurer promises to compensate the insured f inancial ly within the

scope of insurance policy, & the insured promises to pay a fixed rate of

premium to the insurer.

Based upon certain principle

Insurance is a contract based upon certain fundamental principles of ins uran ce , which inc lu des u tmos t g oo d fai th , ins urab le interes t,

contribution, indemnity, causa proxima, subrogation, etc. , which are the

basis for successful operation of insurance plan.

Utmost Good Faith

Ins uran ce i s a con trac t b as ed o n g oo d fai th b etween the p ar ti es .

Therefore, both the part ies are bound to disclose the important facts

affecting to the contract before each other. Utmost good faith is one of

the important principles of insurance.

To conclude, insurance is a device for the transfer of r isks from the

insured to the insurers , who agree to i t for a considerat ion (known as

premium), & promises that the specified extent of loss suffered by the

insured shall be compensated. I t i s a legal contract o f a technical

nature.

To conclude, insurance is a device for the transfer of r isks from the

insured to the insurers , who agree to i t for a considerat ion (known as

premium), & promises that the specified extent of loss suffered by theinsured shall be compensated. I t i s a legal contract o f a technical

nature.

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In order to elaborate the above path lets go through the history of

Life Insurance Sector.

On 3 rd December 1670, seven earnes t men of Bombay wi th jus t

seven rupees for ini t ial expenses gave shape to a plan of offering

insurance to the public without the r isk of ruin and the Bombay

Mutual Life Insurance Society came into existence.

Right up to the end of the 19 t h century , foreign insurance

companies had an upper hand in the matter of insurance business

and they enjoyed mere monopoly and the partiality were observed

in the form that Indian lives were insured with 10% extra premium

as a common pract ice, a t tha t t ime Lala Har ik ishan Lal f rom

Lahore was cal led “The Napoleon of Indian Finance” as he was

then called to launch the Bharat Insurance Company at Lahore

(1896) in Punjab.

Prior to 1912, India had no legislat ion for regulat ing insurance.The Life Insurance Companies Act 1912 and the Provident Fund

Act 1912 were passed.

The Insurance Act 1938 was the fi rs t comprehensive legislat ion

governing not only l i fe but also non-l ife branches of insurance to

provide strict state control over insurance business.

But after the introduction of Insurance Act 1938, the demand for

nationalization of Life Insurance Industry was raised, there were so

many reasons in order to nationalize the insurance sector.

They are:

Policyholders will be provided cent percent security.

Expenses wi ll be reduced due to Absence of dupl ication,

wasteful competition

Better service due to absence of profit motive.

The funds will be available for nation building activities.

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Insurance is servicing sector and so that i t should be in the

hands of government only.

Above are few but strong reasons, which have contributed towards

nationalization of insurance sector, and then after in the year 1956,

all insurance companies were merged in to one and Life Insurance

Corporation of India came into existence.

Til l the year 1999, LIC of India was the only insurance sector in

economic market with ever- increas ing growth ra te and market

s ha re with t he capac it y t o earn h igh r at e o f p ro fi t and t hus

profitability. In spite of all these merits of LIC, the overall statusof insurance sector was not so satisfactory.

Business figure before the introduction of IRDA

Population 1.00 Billion

Insurable Population 0.36 Billion

No. Of insured individuals 0.08 Billion

Potential uninsured

individuals

0.28 Billion

New Business premium 0.66 Billion

Above stated figures clearly shows that from 1 Billion population

of India, almost 0.28 Billion population was uninsured. Again the

exi st ing government uni t d id not properly mee t the emerging

segments l ike ret i rement, disabili ty. Moreover, the government

wan ted 25% p .a . g rowt h r at e i n new bus ines s p remi um f rom

insurance sector. All these factors combine forced the government

to take the decision about the privatization of insurance sector.

In order to increase the business act ivi t ies , the introduction of

IRDA was made by Gove rnment . Thus, IRDA ( Ins urance

Regulatory and Development Authori ty) witnessed the existence

power to co-ordinate regular and control the insurance business.

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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

109 31.01.2001 Birla Sun Life Insurance

110 12.02.2001 TATA AIG Life Insurance

111 30.03.2001 SBI Life Insurance

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SHARE OF PRIVATE INSURANCE PLAYERS

As per the figure available with IRDA reports for the period ended in August

2005, the 13 private 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) professional outlook, (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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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

SBI Life Insu.

AMP Sanmar

Metlife

Chart 2 shows that the annual growth rate of the private life insurance playersfrom November 2004-05. it is interesting to note that Allianz Bajaj has achived

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, LIC’s 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

bancassurance 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.

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Annual Growth rate of Private Insu.

Players from Nove. 2004-05

73.0290.41164.31

264.09

66.2348.2493.9100.43

-2.48

98.69136.48

78.06-7.93

-100

0

100

200

300

I C I C I P r u .

L i f e

H D F C

S t a n d a r d

T A T A

A I G

A V I V A

L i f e

S B I L i f e

I n s u .

M e t l i f e

B i r l a s u n l i

f e

Insurers

A n n u a l g r o w t h

r a t e

17



INTRODUCTION TO ICICI GROUP

ICICI BANK

ICICI Bank is India’s 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

Bank’s equity shares are listed in India on stock exchanges at

Chennai. 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 York Stock Exchange (NYSE).

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial

institution, and was its wholly owned subsidiary. ICICI’s shareholding in ICICI Bank

was reduced to 46% through a public offering of shares in India in fiscal 1998, anequity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank’s

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 group’s universal

banking strategy. The merger would enhance value for ICICI shareholders through the

18



merged entity’s 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 toICICI’s 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 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 Jalandhar 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 group’s financing and banking operations, both wholesale andretail, 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 Group’s 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.

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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 insurance. In Asia, Prudential is UK”s

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 plc’s 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 Company’s 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

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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 banc

assurance tie-ups. Today the company is the number one private life insurer in

the country.

Management

K. V. Kamath

Managing Director and Chief Executive Officer

Lalita Gupte

Joint Managing Director Kalpana Morparia

Joint Managing Director

Chanda Kochhar

Deputy Managing Director

Nachiket Mor

Deputy Managing Director

21

http://www.icicibank.com/pfsuser/aboutus/newsroom/executivebio/nachiketmoresume.htm

http://www.icicibank.com/pfsuser/aboutus/newsroom/executivebio/ckochcharresume.htm

http://www.icicibank.com/pfsuser/aboutus/newsroom/executivebio/kalpanaresume.htm

http://www.icicibank.com/pfsuser/aboutus/newsroom/executivebio/lalitagupteresume.htm

http://www.icicibank.com/pfsuser/aboutus/newsroom/executivebio/kvkresume.htm





Morparia

Ms. Chanda D.

Kochhar

Share Transfer &

Shareholders'/

Investors'

Grievance

Committee

Asset-Liability Management

Committee

Mr. M. K. Sharma

Mr. Narendra

Murkumbi

Ms. Kalpana

Morparia

Ms. Chanda D.

Kochhar

Ms. Lalita D. Gupte

Ms. Kalpana Morparia

Ms. Chanda D. Kochhar

Dr. Nachiket Mor

Committee of

Directors

Mr. K. V. Kamath

Ms. Lalita D. Gupte

Ms. Kalpana

Morparia

Ms. Chanda D.

Kochhar

Dr. Nachiket Mor

23



ICICI PRUDENTIAL’S PRODUCTS.

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 child’s

marriage, expenses for a child’s higher education or purchase of an asset.

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Protection Solutions…….

LifeGuard is a protection plan, which offers life cover 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 child’s life. SmartKid child planed are

also available with in unit-linked form – both single premium and regular premium.

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.

25





ICICI Pru”s 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 sumassured 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 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 SecurePlus and

CashPlus.

27



Introduction to Working Capital

In a perfect world, there would be no necessity for current assets andliabilities because there would be no uncertainty, no transaction

costs,information search costs, or production and technology constraints.

The unitcost of production would not vary with the quantity produced.

Borrowing andlending rates shall be same. Capital, labour, and product market

shall beperfectly competitive and would reflect all available information, thus

in suchan environment, there would be no advantage for investing in short

termassets.However the world we live is not perfect. It is characterized byconsiderable amount of uncertainty regarding the demand, Market

price,

quality and availability of own products and those of suppliers. Therearetransaction costs for purchasing or selling goods or securities.

Information iscostly to obtain and is not equally distributed. There are spreads

between theborrowings and lending rates for investments and financings of equal

risks.Similarly each organization is faced with its own limits on the

production

28



capacity and technologies it can employ there are fixed as well asvariable

costs associated with production goods. In other words, the markets

in whichreal firm operated are not perfectly competitive.

These real world circumstance introduce problem`s which requirethe

necessity of maintaining working capital. For example, anorganization may be

faced with an uncertainty regarding availability of sufficient quantityof crucial

imputes in future at reasonable price. This may necessitate theholding of

inventory, current assets. Similarly an organization may be facedwith an

uncertainty regarding the level of its future cash flows andinsufficient amount

of cash may incur substantial costs. This may necessitate the holdingof reserve

of short term marketable securities, again a short term capitalassets. In

corporate financial management, the term working capitalmanagement (net)

represents the excess of current assets over current liabilities.

WORKING CAPITAL

In simple words working capital is the excess of current Assets overcurrent Liabilities. Working capital has ordinarily been defined as the

excess of

current assets over current liabilities. Working capital is heart of thebusiness If

29



it is weak business cannot proper and survives. It is therefore saidthe fate of

large scale investment in fixed assets is often determined by a

relatively smallamount of current assets. As the working capital is important to

lifeline of company. If this lifeline deteriorates so that the company’s ability to

fundoperation, re-invest do meet capital requirements and payment.Understanding company`s cash flow health is essential to making

investmentdecision. A good way to judge a company`s cash flow prospects is to

look at its

working capital management. The company must have adequateworking

capital as much as needed by the company. It should neither beexcessive or

nor inadequate. Excessive working capital cuisses for idle funds lyingwith the

firm without earning any profit, where as inadequate working capitalshows

the company doesn’t have sufficient funds for financing its dailyneeds working

capital management involves study of the relationship betweenfirm`s current

assets and current liabilities. The goal of working capitalmanagement is to

ensure that a short term debt and upcoming operational expenses. The better

a company managers its working capital, the less the companyneeds to

borrow. Even companies with cash surpluses need to manageworking capital

to ensure those surpluses are invested in ways that will generatesuitable

returns for investors.

“The primary objective of working capital management is toensurethat sufficient cash is available to”· Meet day to day cash flow needs.· Pay wages and salaries when they fall due.

· Pay creditors to ensure continued supplies of goods and services.· Pay government taxation and provider of capital-dividends and

30



· Ensure the long term survival of the business entity

Working Capital Management “Working capital refers to a firm’s investment in short term assets-

cash, shortterm securities, accounts receivable and inventories.”- Weston &BrighamWorking capital can be classified either on the basis of its concept oron thebasis of periodicity of its requirement.(I) On the basis of concepts there are two concepts of workingcapital: -1. Gross Working Capital

2. Net Working CapitalGross Working CapitalGross working capital refers to the firm’s investment in currentassets. Currentassets are assets that can be converted into cash within anaccounting year.Current assets include cash and bank balance, Short-term securities,debtors,bills receivables and inventory.

The Gross Working Capital concept focuses attention on two aspectsof currentassets management.(a) Optimum investment in current assets(b) Financing of current assets.

NET WORKING CAPITALNet working capital refers to the difference between current assetsandcurrent liabilities. Current liabilities are those claims of outsiders,which are

expected to mature for payment within an accounting year andinclude bills

31



payable and outstanding expenses. Net working capacity indicatesthe liquidityposition of the firm. Generally net working capacity is referred to as

workingcapital.

(II) On the basis of requirement – According to Gestenberg, theworking capital

can be classified into permanent or regular working capital andvariable

working capital.

Operating CycleIt is clear that working capital is required because of the time gap

between thesales and their actual realization in cash. This time gap is

technically termed as“operating cycle” of the business. Funds required investing in

inventories;debtors and other current assets keep on changing shape and

volume. Like acompany has some cash in the beginning. This cash may be to the

suppliers of raw material, to meet labour costs and other overheads. These

threecombined would generate WIP, which will be converted into finished

goods oncompletion of production process. On sale these finished goods

gets convertedinto debtors and debtors pay, the firm will again have cash. This

cash will againused for financing raw materials, WIP, etc. Thus, there is a complete

cycle

when cash gets converted into raw material, WIP finished goods,debtors andfinally again cash.In case of a manufacturing company, the operating cycle is the

length of timenecessary to complete the following cycle of events:(i) Conversion of cash into raw material.(ii) Conversion of raw material into work-in-progress.(iii) Conversion of work-in-progress into finished goods.(iv) Conversion of finished goods into accounts receivables, and

(v) Conversion of accounts receivables into cash.

32



OBJECTIVES OF WORKING CAPITAL MANAGEMENT The basic objective of working capital is to provide adequate supportfor thesmooth functioning of normal business operations of a company. Thetermadequate working capital is subjective depending on management’s

attitude

33



towards uncertainty/risk.I. Maintenance of working capital.II. Availability of ample funds at the time of need.

Working Capital Cycle The working capital cycle can be defined asThe period of time which elapses between the point at whichcash begins tobe expended on the production of a product and the collection

of cash from acustomerACCOUNTS RECERECEIVABLES

CASH

RAW MATERIALS WORK IN PROGRESS

FINISHED GOODS

SALES

34



Need of Working Capital Management

The need for working capital gross or current assets cannot be overemphasized. As already observed, the objective of financialdecision making isto maximize the shareholders wealth. To achieve this, it isnecessary togenerate sufficient profits can be earned will naturally depend uponthemagnitude of the sales among other things but sales can notconvert into cash.

There is a need for working capital in the form of current assets todeal withthe problem arising out of lack of immediate realization of cashagainst goodssold. Therefore sufficient working capital is necessary to sustainsales activity.

Technically this 10 is refers to operating or cash cycle. If thecompany has

certain amount of cash, it will be required for purchasing the rawmaterial maybe available on credit basis. Then the company has to spend someamount forlabour and factory overhead to convert the raw material in work inprogress,and ultimately finished goods. These finished goods convert in tosales oncredit basis in the form of sundry debtors. Sundry debtors areconverting into

cash after expiry of credit period. Thus some amount of cash isblocked in rawmaterials, WIP, finished goods, and sundry debtors and day to daycashrequirements. However some part of current assets may befinanced by thecurrent liabilities also. The amount required to be invested in

this current

assets is always higher than the funds available from currentliabilities. This is

the precise reason why the needs for working capital arise

35



Types of Working Capital

The operating cycle creates the need for current assets (working capital).

However the need does not come to an end after the cycle is completed toexplain this continuing need of current assets a destination should bedrawnbetween permanent and temporary working capital.

1) Permanent working capital The need for current assets arises, as already observed, because of thecashcycle. To carry on business certain minimum level of working capital isnecessary on continues and uninterrupted basis. For all practical purpose,thisrequirement will have to be met permanent as with other fixed assets.

Thisrequirement refers to as permanent or fixed working capital

2) Temporary working capitalAny amount over and above the permanent level of working capital istemporary, fluctuating or variable, working capital. This portion of therequiredworking capital is needed to meet fluctuation in demand consequent uponchanges in production and sales as result of seasonal changes

Graph shows that the permanent level is fairly castanet; while temporaryworking capital is fluctuating in the case of an expanding firm thepermanentworking capital line may not be horizontal.

This may be because of changes in demand for permanent

current assets

might be increasing to support a rising level of activity.

36



Determinants of Working Capital

The amount of working capital is depends upon a following factors

1. Nature of businessSome businesses are such, due to their very nature, that their requirementof fixed capital is more rather than working capital. These businesses sellservicesand not the commodities and that too on cash basis. As such, no foundsareblocked in piling inventories and also no funds are blocked in receivables.E.g.public utility services like railways, infrastructure oriented project etc.thererequirement of working capital is less. On the other hand, there are somebusinesses like trading activity, where requirement of fixed capital is less

butmore money is blocked in inventories and debtors.

2. Length of production cycleIn some business like machine tools industry, the time gap between theacquisition of raw material till the end of final production of finishedproductsitself is quite high. As such amount may be blocked either in raw materialorwork in progress or finished goods or even in debtors. Naturally there needof

working capital is high.

37



3. Size and growth of businessIn very small company the working capital requirement is quit high due tohigh

overhead, higher buying and selling cost etc. as such medium sizebusinesspositively has edge over the small companies. But if the business startgrowingafter certain limit, the working capital requirements may adversely

affect by

4. Business/ Trade cycleIf the company is the operating in the time of boom, the working

capitalrequirement may be more as the company may like to buy more rawmaterial,may increase the production and sales to take the benefit of favorable market,due to increase in the sales, there may more and more amount of fundsblocked in stock and debtors etc. similarly in the case of depressionsalso,working capital may be high as the sales terms of value and quantity

may be

38



reducing, there may be unnecessary piling up of stack withoutgetting sold, thereceivable may not be recovered in time etc.

5. Terms of purchase and salesSome time due to competition or custom, it may be necessary for thecompanyto extend more and more credit to customers, as result which moreand moreamount is locked up in debtors or bills receivables which increase theworkingcapital requirement. On the other hand, in the case of purchase, if the credit isoffered by suppliers of goods and services, a part of working capital

requirement may be financed by them, but it is necessary topurchase on cashbasis, the working capital requirement will be higher.

6. Profitability The profitability of the business may be vary in each and everyindividual case,which is in turn its depend on numerous factors, but high profitabilitywillpositively reduce the strain on working capital requirement of the

company,because the profits to the extent that they earned in cash may beused to meetthe working capital requirement of the company.

7. Operating efficiencyIf the business is carried on more efficiently, it can operate in profitswhichmay reduce the strain on working capital; it may ensure properutilization of existing resources by eliminating the waste and improved

coordination etc.

39



How to analyze Working Capital

The process of analysis of working capital is a three step process. Thisprocessis included the followings:-1. Stepv The first step of analyzing of working capital begins by determining

current assets.v Current assets are comprised of cash, marketable securities, accountsreceivable and current inventory.v The sum of the total value of each of the above is called the currentassets2. Step2v The second step is determining of current liabilities.v Current liabilities include accounts payable, accrued expenses, notespayable and the portion of long-term debt that is classified as current.v The sum of all of these above mention accounts are called current

liabilities figure.3. Step3v Take the total of the current assets and subtract them from the currentassets.v The result will be the working capital.

v In other words, current asset minus current liabilities equals

to working

capital.

40



Example:-v The company has $100,000 in cash, $50,000 in securities, $10,000 inaccount receivable, and $30,000 in inventory.v On the current liabilities side, the company has $60,000 in accountspayable, $10,000 in accrued expenses, and $20,000 in current debt.v The current assets of the company are :-$100, 000 + $50,000 + $10,000 + $30,000 = $190,000.v The current liabilities are:-$60,000 + $10,000 + $20,000 = $90,000.v Now take the current assets of $190,000 and subtract the currentliabilities of $90,000 to arrive at the working capital of $100,000.v $190,000 - $90,000 = $100,000.

Current AssetsCurrent Asset is a balance sheet item which equals the sum of cash andcashequivalents, accounts receivable, inventory, marketable securities,prepaidexpenses, and other assets that could be converted to cash in less than

oneyear. A company's creditors will often be interested in how muchthat company has in current assets, since these assets can be

easily liquidated in case the company goes bankrupt. In

addition, current

assets are important to most companies as a source of funds forday-todayoperations.In accounting, a current asset is an asset on the balance sheetwhich isexpected to be sold or otherwise used up in the near future, usuallywithin oneyear, or one operating cycle whichever is longer. Typical currentassetsinclude cash, cash equivalents, accounts receivable, inventory, theportion of prepaid accounts which will be used within a year, and short-terminvestments.

41



Current LiabilitiesIn accounting, current liabilities are considered liabilities of the businessthat

are to be settled in cash within the fiscal year or the operating cycle,whicheverperiod is longer.

For example,Accounts payable for goods, services or supplies that were purchased forusein the operation of the business and payable within a normal period of timewould be current liabilities.

Bonds, mortgages and loans that are payable over a term exceeding oneyearwould be fixed liabilities or long-term liabilities. However, the paymentsdueon the long-term loans in the current fiscal year could be consideredcurrent

liabilities if the amounts were material.

,

42



Annual Report of ICICI Prudential

Assets Under Management (AUM) as at the end of Feb-2007 (Rs in Lakhs)

Mutual Fund NameAUM Average AUM For The Month

Excluding Fund Of

FundsFund Of Funds

Excluding Fund Of

FundsFund Of Funds

1. ABN AMRO Mutual Fund 527298.61 34793.7 520357.41 35962.1

2. AIG Global Investment Group Mutual Fund N/A N/A N/A N/A

3. Benchmark Mutual Fund 493459.19 0 565300.47 0

4. Birla Sun Life Mutual Fund 2107032.33 1901.45 2276874.74 2016.87

5. BOB Mutual Fund 13189.46 0 12710.58 0

6. Canbank Mutual Fund 220055.55 0 224400.85 0

7. DBS Chola Mutual Fund 267272.69 0 236941.15 0

8. Deutsche Mutual Fund 632738.66 0 643309.79 0

9. DSP Merrill Lynch Mutual Fund 1363796.81 0 1337579 0

10. Escorts Mutual Fund 11892.52 0 9857 0

11. Fidelity Mutual Fund 567052.22 7885.48 594872.17 8669.47

12. Franklin Templeton Mutual Fund 2210219.06 32939.41 2343907.4 33551.3

13. HDFC Mutual Fund 3107988.05 0 3222873.02 0

14. HSBC Mutual Fund 1196159.48 0 1219830.8 0

15. ING Vysya Mutual Fund 465070.34 91168.93 469516.87 97905.45

16. JM Financial Mutual Fund 382811.94 0 386731.37 0

17. JPMorgan Mutual Fund N/A N/A N/A N/A

18. Kotak Mahindra Mutual Fund 1340625.72 55835.13 1335816.27 59243.32

19. LIC Mutual Fund 1149722.96 0 1197068.82 020. Lotus India Mutual Fund 123858.99 0 84093.35 0

43



21. Morgan Stanley Mutual Fund 287119.9 0 310427.14 0

22. PRINCIPAL Mutual Fund 1060032.69 0 1094027.66 0

23. ICICI PRUDENTIAL Mutual Fund 4328067.51 3731.96 3907924.85 3982.85

24. Quantum Mutual Fund 5380.17 0 5818.48 0

25. Reliance Mutual Fund 4221591.34 0 4359281.53 0

26. Sahara Mutual Fund 17596.99 0 16987.98 0

27. SBI Mutual Fund 1847383.96 0 1874050.79 0

28. Standard Chartered Mutual Fund 1299706.71 2886.65 1381960.47 2861.86

29. Sundaram BNP Paribas Mutual Fund 780107.96 0 793897.25 0

30. Tata Mutual Fund 1419829.99 0 1448329.74 0

31. Taurus Mutual Fund 23543.31 0 25362.02 0

32. UTI Mutual Fund 3860299.44 0 3926014.55 0

Grand Total 35330904.55 231142.71 35826123.52 244193.22

Asset Under Management

Mutual Fund Name AUM Equity &

Balance

Debt &

MIP

Equity

%

Debt

%

ABN AMRO Mutual Fund 1580.36 464.589. 1115.92 29.39 70.61

Alliance Capital Mutual Fund 1431.46 589.48 841.98 41.18 58.82

Birla Sun Life Mutual Fund 10049.66 1668.77 8380.89 16.61 83.39

Canbank Mutual Fund 1565.19 224.35 1340.84 14.33 85.67

Chola Mutual Fund 1004.62 232.63 771.99 23.16 76.84

Deutsche Mutual Fund 2366.72 96.57 2270.15 4.08 95.92

DSP Merrill Lynch Mutual Fund 6472.80 1462.33 5010.47 22.59 77.41

Fidelity Mutual Fund 1628.06 1628.06 0.00 100.00 0.00

Franklin Templeton Mutual Fund 16704.74 6965.36 9739.38 41.70 58.30

HDFC Mutual Fund 15707.82 6126.04 9581.78 39.00 61.00

HSBC Mutual Fund 7250.63 1987.93 5262.70 27.42 72.58

ING Vysya Mutual Fund 2072.86 337.25 1735.62 16.27 83.73

JM Financial Mutual Fund 3780.83 85.52 3694.51 2.26 97.74

Kotak Mahindra Mutual Fund 6501.52 1065.12 5436.41 16.38 83.62

LIC Mutual Fund 2959.15 277.46 2681.69 9.38 90.62

PRINCIPAL Mutual Fund 6264.96 1682.48 4582.48 26.86 73.14

Prudential ICICI Mutual Fund 17095.89 2169.46 14926.44 12.69 87.31

44



Reliance Mutual Fund 9907.89 4226.40 5681.49 42.66 57.34

Sahara Mutual Fund 565.50 25.74 539.76 455 95.45

SBI Mutual Fund 7189.35 2311.54 4877.81 32.15 67.85

Standard Charted Mutual Fund 7636.86 0.00 7636.86 0.00 100.00

Sundaram Mutual Fund 2035.21 997.91 1037.31 49.03 50.97

Tata Mutual Fund 8713.95 2629.09 6084.86 30.17 69.83

Taurus Mutual Fund 170.76 157.53 13.23 92.25 7.75

UTI Mutual Fund 21975.57 8791.81 13183.77 40.01 59.99

List of Assets Management Companies and their assets under management

As on June 2008 (In Crores.)

Particulars ICICI PRUDENTIAL

Diversified 1593.8546

Tax Planning 47.9336

Index 2.0978

Sector 179.0116Total Equity 2107.78

FMP 1551.236

MIP 823.2623

Debt ST 479.4336

Income 3778.4525

Total Debt 6932.384

Balanced 469.6412

Gilt LT 412.9397

Gilt ST 150.5677

Total Gilt 563.5074Liquid 6961.6842

Total 17095..89

(Above Table showing Acquisition and Utilization of fund of ICICI PRUDENTIAL)

Fund Manager does utilization of fund, ICICI PRUDENTIAL AMC has variety of scheme and each

scheme has different Fund Manager who is responsible of investing money into market and also

responsible to give return to investors.

45



Marketing Yesterday and Today

Today the definition of marketing has been changed. The marketing activity of an

organization before the product is produced and continues even after the product is

sold. In the buyer market of recent times the sharpest weapon that a company can

develop is globalize marketing place in the value creation and delivery. The proud and

demanding customer of today brings before corporate a critical fact, when the

customer is jury. It is the value generation for the customer that will separate the victor

from vanquished. The value of customer service cascades all over the company. The

aim of customer focus is not just satisfaction but delight satisfaction.

Till the year 1999 the life insurance business was exclusively conducted by the Life

Insurance Corporation (LIC) while the general insurance business in India, was

exclusive by General Insurance Corporation and its four subsidiaries. The insurancesector is opened for private participation since November, 2000.

Before 1999 there was no marketing done by LIC due to its monopoly but now after 5

years the picture has changed. Now there are private players in market. With the

effective marketing techniques the private players has changed the whole scenario of

the insurance sector. They are slowly and gradually driving the business out of the

hands of the LIC. Before 1999 customer had no option other then LIC, but now they

have got many options.

46



This is the significant change in insurance industry. Now the customer is back in the

center state. All the companies are trying to please the customer with the innovative

schemes and better service.

Relationship Marketing in Insurance

Introduction

It is five times more expensive to acquire a new customer than to retain an old one.

Relationship marketing is the practice of building long term satisfying relationship

with key parties customers and suppliers. They accomplish this by promoting and

delivering high quality, goods, services, and fair prices to other parties overview.

Relationship marketing results in strong economic, technical and social ties among the parties.

Definition of Relation Marketing:

Relationship marketing can be defined as the “process to identify, establish, maintain

and other stakeholders at a profit so that the objective of all parties involved are net

and this is done by mutual exchange and fulfillment of promises.

The important objectives of relationship marketing to acquire new customers maintain

and enhance relationship with existing customers, re-activities of ex-customers and

handling of customer terminations. The key objective of relationship marketing is to

establish one to one relationship with all the customers. This may have sound like a

day dream few dream few years ago but thanks to the technological breakthrough and

technological solution providers, it is very much of a reality.

How to add value through relationship Marketing

Identify loyal customers

Recognize their special needs

Provide special reward for loyalty

Establish continuing relationship

47



Ensure increase in customer value

Relationship marketing is one of the hottest tread in the present marketing scenario.

Satisfied customers not only stay with a company but they are also walking talking

advertisement for the company’s product.

OPERATION DEPARTMENT

The Operation department oils the work processes between the customer and company

to ensure consistent and quality service to the customer. To streamline the operations,

the operations department interfaces between the clients and the agents, the branches

and the under writers, and manages work processes.

The vision at customer service

Vision of the company is to deliver “World Class Service” at every opportunity.

Units such as the 9 to 9 contact centre, out bound call centre, customer care. And

query reduction unit are all committed across the country. 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….. Agra, Jalandhar, Ajmer, Amritsar, Aurangabad, Bangalore, Bhopal,

Calicat, Chandigrah, Chennai, Coimbatur, Dehradun, Gurgaon, Hyderabad, Hubli,

Indore, Jaipur, Jalandhar, Jamnagar, Kanpur, karnal, Kochi, Kolkatta, Kota,

Kolhapur, Kottayan, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai,

Nagpur, Nashik, Noida, New Delhi, Patiala, Pune, Raipur, Rajkot, Ranchi, Surat,

Thane, Thrissur, Trichy, Trivendrum, Udaipur, Vadodara, Vashi, Vijayawada and

Vizag.

48



The Company has twelve banc assurance tie-ups having agreements with ICICI Bank,

Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, Punjab and

maharastra Co-Operative Bank, Goa State Co-operative Bank, Indoor Paraspar

Sahakari Bank, Manipal State Co-Operative and Jalgaon People’s Co-OperativeBank, as well as some corporate agents. It has tie-up with organizations like Dhan for

Distribution of Salaam Zindgi, a Policy for the socially and economically

underprivileged sections of society.

ICICI Prudential has recruited and trained over 32000 insurance advisors to interface

with and advice customers. Further, it leverages is State-of the art IT infrastructure to

provide superior quality of service to customer.

The Operation Department of ICICI Prudential delivers the following services to thecustomers such as:

Out Bound Call Centre

Customer Care

Query Resolution Unit

Policy Login Process

9 to 9 Contact Centre

Role of Information Technology in Operation Department:

The Information Technology function at ICICI Prudential is committed to enables

business through the use of technology. It is segmented into 4 groups to enable

highest levels of delivery to the customers: Life Asia Solutions Group that provides

flexibility in designing better product offering to end-users, the Solutions Group-

Web that provides real-time information to customers and is responsible for customer

relationship management, IT Architecture and Corporate Solutions Group is in charge

of developing and maintaining a blueprint for the IT Architecture for the enterprise as

a whole. This team works as an in house R & D Solution Group, exploring new

technological initiatives and also caters to information needs of corporate functions in

the organizations. IT Infrastructure group is responsible for providing hardware,

software, network services to the whole organization. This group runs the “Digital

Nervous System” of the Enterprise at the highest levels of efficiency and provide

robust, scalable and highly available platform for development of business

application.

With the help of Information Technology, an advisor and managers can login the

policy fro any of the offices of ICICI Prudential Ltd. And also with the help of IT any

employee or management can know any information, any thing about the policy,

49



advisor’s record, any branch’s sales, any new schemes, any manager’s record, and

other thins at any time any place.

50



HUMAN RESOURCE MANAGEMENT DEPARTMENT

Introduction to HRM:-

Human resource management is a management function that helps managers’ recruit,

select, train and develops members for an organization. HRM is concerned with the

people’s dimension in organization. ‘Manpower’ or ‘human resource’ may be thought

of as ‘the total knowledge, shills, creative abilities, talents and aptitudes of an

organization’s work force, as well as the values, attitudes and benefits of an individual

involved. It is the sum total of inherent abilities, acquired knowledge and shills

represented by the talents and aptitudes of the employed persons.

Of all the ‘Ms’ in management (i.e. the management of materials, machines, methods,

money, motive power), the most important ‘m’ for men or human resources. It is the

most valuable asset of an organization, and not the money or physical equipment. It is

in fact an important economic resource, covering all human resources- organized or

unorganized, employed or capable of employment, working at all levels- supervisors,

executives, government employees, ‘blue’ and ‘white' collar workers, managerial,

scientific, engineering, technical, skilled or unskilled persons, who are employed in

creating, designing, developing, managing and operating productive and service

enterprises, and other economic activities.

Human resources are utilized to the maximum possible extent in order to achieve

individual and organizational goals. And organization’s performance and resulting

productivity are directly proportional to the quantity of its human resources

Organization Structure:-

‘Organization’ is a group of people working together cooperatively under ‘authority’

toward achieving goals and objectives that mutually benefit the participants and the

organization. A well-known author of HRM Allen says “the process of identifying andgrouping the work to be performed, defining and delegating responsibility and

authority, and establishing relationships for the purpose of enabling people to work

most effectively together in establishing of objectives”

The essence of this definition is that people who work together require a defined

system or structure through which they relate to each other and through which their

efforts can be coordinated. Every organization has goals or objectives for its existence.

In the case of Personnel Management, it is to optimize “the effectiveness of human

resources”. These goals can be achieved more suitably if the behavior of the workers

and the composition of the organization can be predicted and integrated cooperatively.

51



The formal organization structure attempts to give order and unity to the actions and

efforts of those who work together.

An organization tries to establish an effective behavioral relationship among selectedemployees and in selected work places in order that a group may work together

effectively. There are three kinds of work which must be performed whenever an

organization comes into being:

• Division of labor

• Combination of labour and

• Coordination

The organization structure at ICICI web trade is somewhat like this:

In any organization there is what is termed a ‘hierarchy’, refers to various levels of

authority in an organization, ranging from the Board of Directors at the top to the sales

executives at the bottom.

RESEARCH DESIGN & METHODOLOGY

52

Area manger/ In charge of

Project at Jalandhar

Navin A arwal

National Head (at Mumbai-branch)

Assistant unit manager

Miss Pinki Gu ta

Sales

Executive

Sales

Executive

Sales

Executive

Sales

Executive

C.E.O. Mr. K.V. Kamath

Board of Directors



Objectives

• To Study the Brand awareness of the new product i.e. Unit Linked Insurance

Plans in Jalandhar City.

• To know what are the priorities of people of city for making investment in

Insurance.

• To know what are the perception of the consumer about ICICI Prudential Life

Insurance Co.

• To know the standing of the ICICI Prudential Life Insurance Co. in Jalandhar

City.

Data Source:

The data would be collected from both primary as well as secondary source.Consumers would be asked to fill questionnaires to arrive at the information. Various

secondary sources of data as magazines, journal, Internet etc. would also be explored.

Sampling Area:

The sampling areas of this research are Jalandhar.

Sampling method:

The convenient sampling method was used for this research and the respondents were

those who have already taken life insurance policy.

Sample Size:

The size of this research is 50 respondents.

Research Instrument:

The research instruments, which was used, for collecting the data is questionnaire.

Method of contact:

The method of contact would be personal and direct as this would help to qualify the

customer’s issues while filling up the questionnaire and also helps them if they do not

have the knowledge about any insurance plan of the company.

Method of making an approach for Sales:

After analyzing the data form the questionnaires the needs of prospects were identified

and the best suitable insurance solution was suggested to them accordingly.

Data Collection and Analysis

53



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 Company’s Insurance Policies do you have?

Company No. of Respondents

LIC 50

Birla Sunlife 2

SBI 3

ICICI Pru. Life 10

Kotak Mahindra 3

Post Office 15

HDFC 3

54

No. of Respondents

0

102030405060

L I C

S B I

K o t a k

M a h i n d r a

H D F C

No. of

Respondents



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.

Q.3 What 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

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.4 What priorities would you consider most important, while purchasing a

policy?

Criteria/Rank 1 2 3 4 5 TotalDeath Benefit 29 10 6 2 3 50

Children’s

Future

7 13 21 3 0 44

Retirement

Planning

5 5 6 20 7 43

Tax Planning 8 18 8 8 6 48

Financial

Planning

2 5 3 11 25 46

55



Priorities of Respondents

010

2030

4050

60

1 2 3 4 5 T

o t a l

Rank

N o . o f R e s p o n d e

Death Benefit

Children’s Future

Retirement

Planning

Tax Planning

Financial

Planning

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 children’s future and retirement planning.

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


Yes 32

No 18

Q.6 If “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.7 Is your current Insurance policy “Unit Linked” or “Traditional?

56




Only Unit Linked 0

Only Traditional 39Both 11

Respondents Having ULIP and

Traditional Insurance Products

0%

78%

22%Only Unit Linked

Only Traditional

Both

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.8 If 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 TotalMutual 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

57



Investment Priorities

0102030405060

1 2 3 4 5 6 7 8

T o t a l

Rank

N o . o f R e s p o n d

e n t

Mutual FundInsurance

Gold

Equities

Post Office

Debenture

Bank Deposit

Other

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

Jalandhar town. The objective behind this Q. is that after the Charotar Nagrik Co-

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

purchasing an insurance policy?

Criteria/Rank 1 2 3 4 5 50

Premium 12 15 15 6 2 50

Return 21 17 8 2 2 50

Safety 20 14 15 1 0 50

Liquidity 1 1 9 18 21 50

Market

Condition

1 2 0 16 21 40

58



Factors Affecting the Insuran

Decision

0

20

40

60

1 2 3 4 5 6

Rank

N o . o f

R e s p o n d e n t s Criteria/Rank

Premium

Return

Safety

Liquidity

Market Conditio

The question No. 9 is designed to know which the factors are affecting the

most to the prospect while making decision to invest in insurance. As far as investment

in insurance is concerned most of the people want that it should be safe and at the

same time giving the compatible returns because insurance is not only for death benefit

it is also a saving tool for future. So the mix response of respondents is welcomed.

Available data is such that there is a bit ambiguity. 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. 10 Are you or ay of your family members are planning to buy an

insurance policy in near future?

Criteria No. of RespondentsYes 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.

59



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


Yes 10 No 30

Q. 11(a) If “No”, then give reasons?


High Premium 0

Low Return 1

Poor Services 7

Others 2

No. of Respondents

0% 10%

70%

20% High Premim

Low Return

Poor Services

Others

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 byanyhow. 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, non-

dispatchment of cheques and other important vouchers, etc. So the company can

improve upon these and increase its market share by offering quality service to

the customers.

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

60




Yes 30

No 20

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

Toal No. of Advertisement

13%

10%

47%

30%

Television

News Paper

Sales

Representative

Others source

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

(Open Ended)

The question No.13, 14 and 15 are designed to know the companyawareness 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 a

different identity. So there is a great need to design the advertisement campaign

in 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.

QUESTIONNAIRE


Television 4

News Paper 3

Sales Representative 14

Others source 9

61



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

Yes No

Q.2. Which Company’s Insurance Policies do you have?(Please specify the numbers)

LIC SBI Life Insurance

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 a

policy? (Please Rank Your Choice)

Death Benefit

Children’s Education

Retirements Benefit

Tax Planning

Financial Planning

All of above

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

Yes No

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

62



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


Mutual Funds Post Office Schemes

Insurance Policies Debentures

Gold Banks (FD’s etc.)

Equities If other (specify) ___________

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

purchasing an insurance policy?


Premium

Return

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

Radio Internet Hoarding

Others (Please Specify)_____________________________

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

_______________________________________________________________

63



_______________________________________________________________

_____________________

CONCLUSION

So according to the data available form the survey one can conclude that even though

the Unit Linked Insurance Plans are very much popular in Metro and semi cities, the

product awareness of ULIP is very low among the people of villages/rural areas and at

the same time there is a need to create the different image of the company among the

people by any means like advertisement, seminars or meetings.

64



SWOT ANALYSIS

• Strengths

Flexible Products

Partners having exper ience in d i fferen t markets o f the

world.

Synergy with existing operations

Expertise in the field of insurance

Professional management

Good Customer service

Create a brand name• Weakness

Low capital base

Yet to build strong distribution network

Cannot tap rural market

• Opportunities

Untapped market Banks ready to t ie up fo r as a readymade d is t r ibu t ion network fo r a

small fee.

• Threats

Large distribution network of LIC

Decades of experience and brand name of LIC

5% service tax on investments.

65



BIBILIOGRAPHY

Website address

www.bimaonline.com

www.licindia.com

www.irdaindia.com

www.iciciprulife.com

MagazinesIndia Today

ICFAI Journal

Outlook Express

Materials

LIC literature and brochures

ICICI Prudential literature and brochures

IC-33 OF IRDA ACT

http://www.bimaonline.com/

http://www.licindia.com/

http://www.irdaindia.com/

http://www.iciciprulife.com/

http://www.bimaonline.com/

http://www.licindia.com/

http://www.irdaindia.com/

http://www.iciciprulife.com/

Documents

Pranav Bansal Project