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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
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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
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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
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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
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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
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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.
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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.
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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
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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
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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
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· 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
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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.
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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
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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
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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
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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.
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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.
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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
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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.
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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.
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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.
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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.
,
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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
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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
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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.
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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.
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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
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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.
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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,
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advisor’s record, any branch’s sales, any new schemes, any manager’s record, and
other thins at any time any place.
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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.
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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
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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
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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
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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
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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
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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
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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?
Criteria No. of Respondents
Yes 32
No 18
Q.6 If “Yes” do you have any knowledge about unit linked insurance plans?
Criteria No. of Respondents
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?
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Criteria No. of Respondents
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
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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
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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.
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Q. 11 Are your needs satisfied with your current investment in insurance?
Criteria No. of Respondents
Yes 10 No 30
Q. 11(a) If “No”, then give reasons?
Criteria No. of Respondents
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?
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Criteria No. of Respondents
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
Criteria No. of Respondents
Television 4
News Paper 3
Sales Representative 14
Others source 9
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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
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Q.8 If given a choice, where would you like to invest your money?
(Please Rank Your Choice)
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?
(Please Rank Your Choice)
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?
_______________________________________________________________
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_______________________________________________________________
_____________________
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.
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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.
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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