A project report on a study of investment decisions of individual investor with regard to uli ps

A study of investment decisions of individual investor with regard to ULIPs

Contents

Sl. No. Titles Page No.

I Chapter 1

Executive summary

Statement of the problem & objectives

Purpose of the Study

Scope of the study

Limitations of the study

1

2

3

II Chapter 2

Purpose & need of insurance

Industry profile

IRDA

Organization Profile

Board of directors

Work flow

Organization Chart

Swot analysis

Research methodology

Measuring tools

4 6

11

29

38

44

51

54

56

III Chapter 3

Analysis and interpretation

Findings

Suggestions

Conclusion

57

82

83

84

IV Chapter 4

Annexure

Bibliography

85

89

Babasabpatilfreepptmba.com1


Executive summary

The main aims of the investor is to minimize the risk involved in investment & maximize

return and today there are number of options available to investor like Post office

investment, bank deposit, Real estate, debentures, Government securities, stock market,

insurance & gold etc. Among these, ULIP introduced by the insurance companies is the

option which require less capital & give the benefit of Professional Management &

suitable for all especially to the persons who do not have time to watch the market

regularly.

ICICI Prudential commenced on January 20th 2002. The Hubli branch however was

established in Feb 2004. The branch office has mainly 2 departments i.e.; Operations and

Sales. The branch office looks after the business from various serviceable locations, still

in pipeline of expansion to cover some parts of North Karnataka.

ULIP came into play in the 1960s and became very popular in Western Europe and

Americas. In India also it has become popular. Today ULIP contribute 80% of the

premium collected by the insurance company.



STATEMENT OF THE PROBLEM

PROBLEM DEFINITION

“To know the factors that affects the investment decisions of individual investor while

investing in ULIPs”

RESEARCH STUDY

“A study of investment decisions of individual investor with regard to ULIPs at ICICI

prudential life insurance co ltd HUBLI branch”.

OBJECTIVE OF THE STUDY

To study the investor perception regarding investment in ULIPs

To study the service of ICICI pru life.

To study the current ULIPs performance.

To find most considerable ULIP.

To study the investment decisions of different social class people (in terms of

age group, education, income level etc.

To know the factors that influence investors while taking investment

decisions.



Purpose of the Study

The big question mark in front of every investor is where to invest money to get real

income. There are so many options available to them but it is very difficult to choose

among them, as every option has it’s own merits & demerits. Investor has to be fully

aware of all these options & he should be in a position to choose which one is suitable for

him on the basis of his risk, investment objective and expected return etc. Option that is

suitable for one person may not suit other person’s requirement. This process of choosing

suitable product take long time, the best way for the person who has no time & expertise

in selecting investment avenue can go for ULIP.

Scope of the study:

The research was undertaken to gather information from the respondent to know

exactly how many people aware of ULIPs in Hubli city and the study is restricted within

the city.

The reasons for confining the scope of the research in Hubli were.

1) One of the fast growing city in Karnataka and represents huge market for scope

with more than 90 lakhs people.

2) Hubli is one of the commercial areas.

3) It is a place where the small and large industries are located .with the more

increase population and there style more people are conscious about their lives

Limitations of the study:

The time was not enough to study the vast and growing life insurance sector in

Hubli city.

The study and the survey were conducted in hubli city only.



LIFE INSURANCE

Life insurance is a contract providing for a payment of a sum of money to the person

assured or failing him to the person entitled to receive the same on the happening of

certain event. Uncertainty of death is inherent in human life. It is this risk, which gives

rise to the necessity for some form of protection against the financial loss arising from

death. Insurance substitutes this uncertainty by certainty. The objective of insurance is

normally to provide:

a. Family protection and

b. Provision for old age.

PURPOSE AND NEED OF INSURANCE

Conceptually, the mechanism of insurance is very simple, people who are exposed to the

same risks come together and agree that, if any one of the members suffers a loss, the

others will share the loss and make good to the person who lost.

A human life is also an income generating asset. This asset also can be lost through

unexpectedly early death or made non-functional through sickness and disabilities caused

by accidents. Accidents may or may not happen. Death will happen, but timing is

uncertain. If it happens around the time of one’s retirement, when it could be expected

that the income will normally cease, the person concerned could have made some

arrangements to meet the continuing needs. But if it happens much earlier when the

alternate arrangements to meet the continuing needs are not in place, insurance is

necessary to help those dependent on the income.

The risk only means that there is a possibility of loss or damage. It may or may not

happen. There has to be an uncertainly about the risk. Insurance is done against the

contingency that it may happen. Insurance is relevant only if there are uncertainties. If

there is no uncertainty about the occurrence of an event, it cannot be insured against.



Insurance does not protect the asset. It does not prevent its loss due to the peril.

The peril cannot be avoided through insurance. The peril can sometimes be avoided

through better safety and damage control management. Insurance only tries to reduce the

impact of the risk on the owner of the asset and those who depend on that asset. It may

not fully compensate the losses. Only economic or financial losses can be compensated.

Satisfaction of economic need requires generation of income from some source. If the

property, which is the source of such income, were lost fully or partially, permanently or

temporarily, the income too would stop. The purpose of insurance is to safeguard against

such misfortunes any, who are exposed to the same risk but saved from the misfortune.

Thus the essence of insurance is to share losses and substitute certainty.

There are certain basic principles, which make it possible for insurance to remain

popular, and a fair arrangement. The first is the fact that people are exposed to risks and

that the consequences of such risk are difficult for any one individual to bear. It becomes

bearable when the community shares the burden.

The second is that no one person should be in a position to make the risk happen. In other

words, none in the group should set fire to his assets taking unfair advantage of an

arrangement put into place to protect people from the risks they are exposed to.

A thriving insurance sector is of vital importance to every modern economy. First

because it encourages the savings habit, second because it provides a safety net to rural

and urban enterprises and productive individuals. And perhaps most importantly it

generates long term inventible funds for infrastructure building. The nature of the

insurance business is such that the cash inflow of insurance companies is constant while

the payout is deferred and contingency related.

The IRDA bill provides for the establishment of an authority to protect the interest of the

holders of insurance policies, to regulate, promote and insure orderly growth of the



insurance industry and amend the insurance Act 1938, the life Insurance Act, 1956 and

the General Insurance Business (Nationalization) Act, 1972. the bill allows foreign equity

stake in domestic private insurance companies to a maximum of 26 per cent of the total

paid-up capital and seeks to provide statutory status to the insurance regulator.

Why life insurance?

Life Insurance cover is essential for it provides the following benefits:

A lump sum payment to the nominees at the time of the death of the policy

holder.

A regular payment to the nominees in the event of the death of the policy holder.

Tax benefits, as premiums paid reduce the liability of tax.

Relieves economic hardships in the family on the uneventful death of the sole

Income holder.

Inculcates the habit of saving.

NEED FOR INSURANCE

The need for life insurance comes from the need to safeguard our family. If you care for

your family's needs you will definitely consider insurance. Today insurance has become

even more important due to the disintegration of the prevalent joint family system, a

system in which a number of generations co-existed in harmony, a system in which a

sense of financial security was always there as there were more earning members.

INDUSTRY PROFILE

Insurance is in a manner of speaking the last frontier in the financial sector to open. it is

also a sector which will lead to benefits across the full spectrum, from the individual who

will now have wider choices, to the economy which will see increased savings, to the

infrastructure sector which can look forward to long term funding being available. variety



is the spice of life, unless you are in insurance business. Traditionally, the most

successful insurance firms generally take on the least risk. However, factors such as

deregulation, globalization, and the internet are shaking up the industry.

THE INSURANCE CAN BE CLASSIFIED INTO TWO

1). LIFE insurance

2.) NON-LIFE insurance

1. LIFE insurance

This type of insurance covers life of individuals that is protection against

Death

Diseases

Disability

THERE ARE 3 TYPES OF LIFE INSURANCE POLICIES:

i) Term insurance plans:

Pure life covers where policy holder pays for the risk cover and do not expect to receive

anything else in return. Term insurance is now available in India. Opting for such policy

will improve the efficiency of the policy premium and enable policy holder for a bigger

risk cover for the same cost. These are term insurance plans without interest.

ii) Whole life insurance plans:

Whole life policies require the policy holder to pay premium throughout his/her life and

cover risk for the whole life. The policies without profits are cheaper.

iii) Endowment insurance plan:



Endowment policies are costliest and among this group, money back policies involve

paying highest premium. They give customers maturity benefits (normally, sum assured)

and additional profits by way of bonus, guaranteed additions, loyalty bonus, etc. money

back policies also provide partial payment back to the insured person at pre-set time

periods.

2. Non-Life insurance

This type of insurance covers material assets that is protection against

Theft

Fire

Loss In Transit

Accidents

Illness in case of Livestock

HOW LIFE INSURANCE IS SOLD?

INDIVIDUAL POLICY

When we buy an individual policy, we choose the company, the plan, and the

benefits and features that are right for us and our family .We might be able to buy the

policy from the same agent or company or company representative who sells us property

and liability.

Insurance for your home, automobile or business and although you won’t qualify

for any discount by buying your life insurance and other insurance from the same

representative, working with a single advisor for all your insurance needs can make your

financial life simpler.

Individual policies are typically sold through insurance agents or brokers .If you buy

policy through an agents or brokers .If you buy a policy through an agent or broker, you

will pay a commission, also called as “ load “ that is built into the premium rate.



Brief Review of Scenario – Insurance

Insurance in India started without any Regulation in Nineteenth century.

It was story of a typical colonial era. A few British companies dominated

the market mostly in large urban centers.

Insurance was nationalized mainly on 3 counts First, Indian lives were not insured.

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

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

insurance was nationalized in the year 1956, and then general insurance was nationalized

in the year 1972. In 1999, the private insurance companies were allowed back again into

insurance sector with maximum cap of 26 percent foreign holding.

1818 The British introduce to India, with the establishment of the Oriental Life

Insurance company in Calcutta.

1850 Non life insurance debuts, with Triton Insurance Company.

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

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

1912 The Indian life assurance companies’ act enacted to regulate the life

insurance business.

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

replaces earlier act.

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

insurers and provident societies.

1956 Government sets up LIC

1972 Non life insurance nationalized, GIC set up.

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

to draw up a blue print for insurance sector reforms.

1994 malhotra Committee recommends re-entry of private players, autonomy to

PSU insurers.



1997 Insurance regulator IRDA (Insurance Regulatory and Development

Authority) set up.

2000 IRDA starts giving licensed to private insurers

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

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

insurers start settling non-life claims in the cashless mode.

History

Insurance in India has its history dating back until 1818, when Oriental Life Insurance

Company was started by Anita Bhavsar in Kolkata to cater to the needs of European

community. The pre-independent era in India saw discrimination among the life of

foreigners and Indians with higher premiums being charged for the latter. In 1870,

Bombay Mutual Life Assurance Society became the first Indian insurance company

covering Indian lives at normal rates.

At the dawn of the twentieth century, many insurance companies were founded. In the

year 1912, the Life Insurance Companies Act and the Provident Fund Act were passed to

regulate the insurance business. The Life Insurance Companies Act, 1912 made it

necessary that the premium-rate tables and periodical valuations of companies should be

certified by an actuary. However, the disparage still existed as discrimination between

Indian and foreign companies. The oldest existing insurance company in India is the

National Insurance Company Ltd., which was founded in 1906. It is in business. Before

that, the industry consisted of only two state insurers: Life Insurers (Life Insurance

Corporation of India, LIC) and General Insurers (General Insurance Corporation of India,

GIC). GIC had four subsidiary companies.

With effect from December 2000, these subsidiaries have been de-linked from the parent

company and were set up as independent insurance companies: Oriental Insurance

Company Limited, New India Assurance Company Limited, National Insurance

Company Limited and United India Insurance Company Limited.

Currently, in India only two million people (0.2 % of the total population of 1 billion) are

covered under Mediclaim, whereas in developed nations like USA about 75 % of the total



population is covered under some insurance scheme. With more and more private

companies in the sector, the situation may change soon.

Acts

The insurance sector went through a full circle of phases from being unregulated to

completely regulated and then currently being partly deregulated. It is governed by a

number of acts.

The Insurance Act of 1938 was the first legislation governing all forms of insurance to

provide strict state control over insurance business.

Life insurance in India was completely nationalized on January 19, 1956, through the

Life Insurance Corporation Act. All 245 insurance companies operating in the country

were merged into one entity, the Life Insurance Corporation of India

The General Insurance Business Act of 1972 was enacted to nationalize the about 100

general insurance companies and subsequently merging them into four companies. All

the companies were amalgamated into National Insurance, New India Assurance,

Oriental Insurance and United India Insurance, which were headquartered in each of the

four metropolitan cities.

Until 1999, there were not any private insurance companies in India. The government

then introduced the Insurance Regulatory and Development Authority Act in 1999,

thereby de-regulating the insurance sector and allowing private companies. Furthermore,

foreign investment was also allowed and capped at 26% holding in the Indian insurance

companies.

The Insurance Regulatory and Development Authority (IRDA):

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

Parliament in December 1999. The IRDA since its incorporation as a statutory body in

April 2000 has fastidiously stuck to its schedule of framing regulations and registering

the private sector insurance companies.



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

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

IRDA’s online service for issue and renewal of licenses to agents.

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

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

their products, which are expected to be introduced by early next year.

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

globally compatible regulations. In the private sector 12 life insurance and 6 general

insurance companies have been registered.

MISSION

To protect the interests of the policyholders, to regulate, promote and ensure orderly

growth of the insurance industry and for matters connected therewith or incidental

thereto.

How do you get License to sell life insurance?

Documentation Requirements

Training

Examination Process

Code & License

Documents Required

Application form + IRDA form

Exam Form

Demand Draft of Rs 1000

6 Passport Size Photographs

Age Proof



Latest Address proof

Education Proof

Pan Card copy (if Pan No. mentioned)

Signed Agreement

Training

IRDA mandates the individual applying for a license to sell life Insurance must go

through training.

The specifications are: 100 Hours of Training in IRDA certified Institutes Manual/Online Training Examination

Examination scheduled will be Online.

Exam Results obtained are entered into AMS by DOPS for Licensing.

LIFE INSURANCE MARKET IN INDIA

India has an enormous middle-class that can afford to buy life, health, and

disability and pension plan products. The low level of penetration of life insurance in

India compared to other developed nations can be judged by a comparison of per capita

life premium. Clearly, there is considerable scope to raise per capita life premium if the

market is effectively tapped.

India has traditionally been a high savings oriented country - often described as being on

par with the thrifty Japan. Insurance sector in the USA is as big in size as the banking

industry there. This gives us an idea of how important the sector is. Insurance sector

channelises the savings of the people to long term investments. In India where

infrastructure is said to be of critical importance, this sector will bring the nations own

money for the nation. This has made the sector the hottest one in India after IT. With



social security and security to the public at large being the agenda for opening the sector,

the role of the regulator becomes all the more serious and one that would be carefully

watched at every step.

The Insurance Regulatory and Development bill is now an Act. With this India is now the

cynosure of all the global insurance players. Numerous players, both Indian and foreign,

have announced their intention to start their insurance shops in India. IRDA, under the

chairmanship of Mr. Rangachary, opened the window for applying licenses in India. One

of the main differences between the developed economies and the emerging economies is

that insurance products are bought in the former while these are sold in latter. Focus of

insurance industry is changing towards providing a mix of both protection/risk over and

long-term investment opportunities.

Historical Perspective

Prior to 1956 -242 companies operating

1956 -Nationalization- LIC monopoly player -Government control

2001 -Opened up sector

Contribution to Indian Economy

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

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

Long term funds for infrastructure.

Strong positive correlation between development of capital markets and

insurance/pension structure.

Employment generation.



JOURNEY OF THE SECTOR IN THE POST-REFORM PERIOD

Fiscal Reforms There is no denying that a thriving insurance industry is critical for every modern

economy. It is, therefore, not surprising that when the government initiated the reforms

process in the early 90s, it decided that dismantling the physical barriers for growth that

emerged in the “License-Permit Raj” though desirable and necessary would not alone

promote growth unless accompanied by fiscal reforms and a thorough revamping of the

financial sector. While in the early period of reforms the government removed many of

the licensing requirements thus giving freedom to the industry to decide on when, where

and how much to invest, a process of fiscal consolidation and reforms in the tax structure

was initiated to make the Indian industry compete effectively with the external

markets. The tax reforms had to be carefully timed so that industry which was insulated

from outside competition for a long period had enough time and resources to withstand

competition from multinationals. The reforms in the financial sector are an integral part

of the whole reforms process and unless there is major break through in this area, a

sustained growth of the economy is not feasible.

Financial Sector Reforms The main engines of growth in any economy are (i) a thriving banking industry providing

timely and adequate credit (ii) a buoyant stock market where capital is easily accessed

and (iii) a dynamic insurance industry that covers risks giving the entrepreneur the ability

to experiment and take risks without which there cannot be just rewards.

The reforms in the Banking sector were primarily aimed at giving the freedom to the

Banks to determine the interest rates based on the risk profile of the customer. The

freeing of the interest rates coupled with other structural reforms were expected to build a

strong and resilient banking system. As a result of the reforms initiated in the 90s the

banking system acquired strength, vibrancy and efficiency and the Indian Banks are now

able to effectively compete with their global counterparts. There has been a notable



improvement in the financial health of the banks in terms of capital adequacy,

profitability and asset quality. As regards stock market, the controller of capital issues

was replaced by SEBI, an independent regulator and we have been witnessing for the last

few years increased confidence in the market by the domestic as well as international

investors. The flow of funds into the stock market is the greatest testimony to the

confidence the individuals and corporate repose in the Indian stock market.

Insurance Reforms

It may be recalled that while the reforms in various sectors of the economy were either

welcomed or considered essential to overcome a crisis, there was considerable debate on

the need for reforms in insurance industry. There were many who maintained that since

insurance contracts between insurers and the insured involve special fiduciary

obligations, it is better if those obligations are guaranteed by the State ownership of

insurance companies. It was argued that insurance industry was nationalized on the

grounds that (i) the State would be in a better position to apply the massive resources

generated through insurance for nation building activities; (ii) the insurance companies

were urban centric and the vast majority of the population that live in the rural areas were

denied the benefit of insurance and the State would have the means and the motivation to

reach out to this section of the population and (iii) the governance standards in some of

the companies were low and that there was a threat of insolvency. The votaries of status

quo argued that these considerations were still valid and there was no need for effecting

any changes.

Those who favored change pointed out that there was a wide gap in terms of market

potential and its exploitation by the nationalized industry, the consumer did not benefit in

the absence of competition in terms of wider choice and competitive pricing and that the

reach of the nationalized companies was limited, the range of products offered restricted

and the service to the consumers inadequate. It was felt in 1990s that the scale of

economic activity attained in the mid-eighties and the momentum generated through the

reforms process in other sectors of the economy cannot be sustained by state controlled



insurance industry and that insurance penetration and enlargement of the market can be

accomplished only when a large number of companies compete with each other. It was

also realized that the objectives of nationalization of the industry could largely be

accomplished through appropriate regulatory measures and a state monopoly was no

longer necessary.

The champions of change finally prevailed and the Insurance Regulatory and

Development Authority Act was notified in April 2000. It took a long time and a great

deal of perseverance on the part of the government to bring about reforms in insurance

sector.

Entry of Private Insurers

While the long debates in the 90s; and the twists and turns that surrounded the opening up

of the sector for private participation had at times thrown up serious concerns about the

implementation of insurance reforms in this country, once the legislation was put

through, the actual process of inducting private players into the market had gone off

smoothly. I do not think there is any other sector in this country where the transition from

state monopoly to free market has been as hassle free as that of the insurance sector.

The transition was smooth partly due to the continuity provided by the office of the

interim Regulator through those turbulent 4 years (1996 to 1999) between the creation of

the office and the passing of the IRDA Bill by the Parliament. This office was able to

appreciate the concerns of the Government, the Parliament and the private investors and

harmonize these various view points while framing the Regulations. They also had time

to study the various models obtaining in the world for regulation of the industry and

identify what suited the needs of our country.

Supervision and regulation of insurance is a relatively new experience in India. It is the

job of the Regulator to ensure that the insurers have, at any point of time, sufficient

resources to meet the liabilities and that all customers are treated in an equitable



manner. When the state enterprises controlled the entire industry, the safety of the

policyholders’ funds was ensured through state guarantee while the fair dealings with the

customers was achieved through parliamentary oversight of the state enterprises. The

opening of the sector for private participation naturally raised issues about ensuring

solvency of the companies and fair treatment to the insured. The Regulations framed by

the Authority deal with both the issues in a comprehensive way. The former is addressed

by stipulating a high level of capital requirement for entry into the field and rigorous

enforcement of the solvency requirements, while the latter is covered by the regulations

put in place for protection of policyholder interests.

The Authority was keen that only companies with a sound financial background enter

insurance industry and, therefore, stipulated a high solvency margin in addition to high

entry capital requirements. The high initial capital requirements and the 26% cap on

Foreign Direct Investment had, in no way, deterred the Indian enterprises and the major

foreign insurance companies from collaborating to form the Indian Insurance

companies. The industry has so far witnessed the entry of 15 new private companies in

the life segment and 8 in the non-life segment. In addition, two insurers have been

granted license to operate exclusively in the health sector. Of the private insurers who

commenced operations in the country other than one insurer each in life and non life

segment, all others have set up businesses in collaboration with a foreign partner. In case

of one life insurer, where both the foreign and the Indian partner quit from the Indian

insurance company in the year 2005, the entire equity stake has been picked up by an

Indian entity. Thus, as on date, 21 insurance companies in the private sector are operating

in the country in collaboration with established foreign insurance companies from across

the globe.

The insurance sector was opened up for private participation on the ground that in spite

of enormous contributions made by the public sector to expand the coverage and spread

awareness about insurance, the interests of the consumers would be better served if there

is competition among the insurers. It was also recognized that the country has a vast



potential waiting to be tapped and this can be done only when we have a large number of

companies spreading their wings across the country and offering a variety of products

catering to the demands of different sections of the population. It was also felt that

competition would generate a healthy attitude towards redressal of consumer grievances

and improve the quality of service. We have now seven years of experience of public and

private sector operating together and it is, perhaps, time to see whether the expectations

are fulfilled.

Growth of Premium

A remarkable feature of the post liberalization landscape is the unprecedented growth in

the premium. The growth is significant in life insurance. The first year premium collected

by the insurers in the year 2006-07 was Rs.75,400 crs compared to Rs.6560 crs in the

year 1999-2000, the year prior to the opening up of the sector for private

participation. This represents a compound annual growth rate of nearly 42% and an

average annual growth rate of 131%. If we take a corresponding period of 7 years prior to

the liberation the first year premium increased from Rs.2375 crs in 1992-93 to Rs.6560

crs in 1999-2000, a compound Annual growth rate of 16%. A significant feature of this

impressive growth in the post reform period is the contribution made by the LIC to the

growth. The compound annual growth rate in the case of LIC was 36% in the post reform

period while it was only 16% in the period prior to reforms. What has prompted the LIC

to significantly increase its performance level? Obviously competition has spurred the

organization to gear itself up and exploit its vast workforce spread across the country to

garner more premiums.

In spite of this impressive growth by the public sector insurer, the private sector

companies have managed to gain a market share of 26% by the year 2006-07. That they

have been able to make such a significant inroad into the market dominated by the LIC is

a great testimony to the leadership of the captains of private industry. The happy feature,

however, is that their market share had not been gained at the expense of LIC but has

come out of the enlarged insurance market. The credit for the enlargement of the market



should legitimately go to the private sector which had identified new markets that were

hitherto unexplored by the LIC. That the LIC had later followed the lead of the private

sector speaks volumes about the contribution made by the liberalization process to the

enlargement of the market.

Insurance Penetration

The opening of the sector has, as earlier pointed out, led to unprecedented increase in

coverage, especially in the life segment and it has impacted the level of insurance

penetration which has witnessed a surge in the last two years. While insurance

penetration was 1.93% in 1999 it rose to 4.8% in the year 2006. It has thus more than

doubled in 7 years. While the increase is impressive in the case of life, where it increased

from 1.39% to 4.1%, it remained stagnant at nearly 0.6% in the case of non-life. The

increased economic activity coupled with recent reforms in general insurance market,

would certainly help expand the market in the years to come.

Insurance Density

In the area of insurance density, significant contribution has been made by the private

sector. We had the problem of not only absence of risk protection through insurance but

also a considerable amount of under insurance. During the pre-liberalization era, the

nationalized companies were unable to target niche markets and were content to sell a

large number of low ticket items spread over the whole country. The private sector has,

on the contrary, started looking at the requirements of various segments of the

population, and introduced need based selling through excellent counseling. It is not

uncommon to see the CEOs of insurance companies personally making presentations to

the heads of industrial and service sector companies and advising them on what products

are best suited to their employees. The product development has also benefited through

these interactions as the insurance chiefs could profitably use their feedback to evolve

new products. Through this process they were able to minimize at least to some extent,

the problem of under insurance. We see a significant increase in the size of the



policies. While the average size of the policy before opening up was around Rs.50,000/-

it has now gone up to Rs.1 lakh in the case of L.I.C. In the case of private insurers, the

average size is Rs.2.50 lakhs. The insurance density which was $10 in the year 1999 has

gone up to $33.2 in 2006.

Product Development

The opening up has augured well for the consumer who has now access to a wide range

of new products. Particularly, unit linked products have attracted the attention of the

insured. While this is a product for the discerning public, there seems to be appetite for

this product from all sections. Availability of riders, particularly health riders, has been a

positive development. In the non-life segment crop insurance based on rainfall and

temperature, experiments in health insurance, Directors and Officers liability covers have

made their entry and have come to stay. The removal of tariffs will give a further boost to

development of tailor made products in the years to come.

Agents Training

The expanding market demands a large agency force. The insurers have, therefore, been

recruiting agency force on a continuous basis. Presently there are more than 20 lakh

individual agents and nearly 5000 Corporate Agents. In order to introduce an element of

professionalism in the insurance intermediaries elaborate training and testing

arrangements were introduced by the Authority. The demand for tied agency force has

led to a situation where the resources of the institutes providing training have been

stretched. The inspections by the Authority of these institutes have revealed a number of

areas where improvements were called for. It was noticed that some of the institutes

did not have the infrastructure to conduct classes and the faculty was drawn on an ad hoc

basis and the courses conducted in a short span as a result of which many of the agents

did not receive adequate training. It was also noticed that the licensed training institutes

allowed franchisees to conduct training on their behalf which was irregular. The insurers,

in their anxiety to recruit agents, did not pay any attention to the type of training



imparted. The Authority had, during 2004, streamlined the system of training and

impressed upon the insurers the need for greater attention being paid to the training of

their agency force. The revised guidelines were issued after extensive consultations with

the stakeholders and it is hoped that this effort would result in improving the quality of

the agency force. The Authority is keen that the agency force should be properly

equipped as the insurance products are no longer simple and the agent should be able to

assess the requirements and advise on the appropriate policy.

It would not be out of place to mention here the importance of the field force being

adequately trained. Being the person on the spot as a representative of the insurer, it is

essential that the agent recognizes and understands the need of the prospect. Having

identified the need, it is his duty to ensure a need-based selling. In the absence of a need-

based selling, the contracts are not likely to last long and the policyholder looks for the

earliest opportunity to quit. The large attrition rate in the contracts bears silent testimony

to this fact. In this regard, another important factor that comes to my mind is the

unhealthy and illegal practice of paying rebates to solicit business. Sec. 41 of the

Insurance Act, 1938 strictly prohibits rebating for procuring business. Apart from the

statutory imposition, the practice also is generally responsible for the poor retention

ratios. Although the retention ratios of insurance companies have been progressively

showing improvement, a great deal needs to be done in this area. A well-trained agent,

fulfilling his role as the primary underwriter, can contribute a great deal in the

accomplishment of this task.

Corporate Agents

The opening of the sector is accompanied by entry of new set of intermediaries in the

insurance market. The institution of corporate agents was a new experiment started by the

Authority to facilitate sale of insurance policies through existing institutions which are in

contact with a large section of the population in the discharge of their normal activities.

The Corporate Agent model is expected to bring down costs of procurement of business

substantially to the insurance company while benefiting the corporate with fee based



income which improves its revenue stream. The insured himself, should feel comfortable

with this model as he would be dealing with an Institution that is familiar to him. In parts

of Europe the Bancassurance model has worked well and the experience of the three

parties to the transaction, namely, the Bank, the insurance company and the customer has

been positive. You would notice in India too the insurers are keen to have working

arrangements with Banks so that they have access to their databank which is a valuable

resource for the insurer to build his customer base. I am confident that in the years to

come Bancassurance would be a critical intermediary in the spread of insurance in the

country.

Brokers

The introduction of brokers in the Indian insurance industry in the liberalized scenario is

another significant development. Brokers act as representatives of the policyholders

although they are paid by the insurers. As a result, they are expected to bring better

service to the clients in several areas like:

Monitoring the insurance market, the credibility of the players and the quality of

services they render.

Analyzing the various products available in the market and assist the clients in

choosing the products that suit their requirement.

Helping the client in the completion of the proposals, conclusion of the contract

and render subsequent service, if any

Assisting the client in the settlement of claims.

Insurance Education and Research

One of the spin-offs of liberalization of the insurance sector has been rise in demand for

insurance education, training and research. The Insurance Institute of India’s role appears

to have been confined to professional examinations conducted by it. The course is a

recognized qualification for professional competence in the area of insurance. What was

perhaps ignored is the need to innovate by way of introduction of new subjects in tune



with the demand and expectations of an evolving market after a thorough review of the

existing course curriculum. Examples of such subjects include Health Insurance, Unit

Linked Insurance, Micro insurance, tapping of alternate channels of distribution, ALM

(Asset Liability Management) related issues and re-visiting the insurance regulations in

the context of the evolving economic environment. The market realities dictate that these

areas are dealt with in greater detail. The various stakeholders need to be receptive to the

changing ground realities to be in a position to meet the challenges.

Similarly research in insurance remains a neglected area and there is need for a concerted

effort to develop and define areas of focus for research in tune with the requirements of

the industry. Without a research focus no institute can expect to make tangible gains in

the near future in terms of value addition and meeting the expectations of its members

and the industry at large. Experiences of the other economies and particularly the

emerging economies are particularly relevant in this context.

Rural and Social Focus

During the debate on opening of the insurance sector, concern was expressed in some

sections that the competition generated with the entry of private insurers would result in

all the insurers including the public sector insurers to chase the niche markets in the

relatively well off regions and their activities would, therefore, be mostly urban centric

and they would ignore the rural markets and the weaker sections of the society.

It was indicated that when the state has monopoly of the sector the public sector

companies were being used as instruments of state for implementing welfare schemes

benefiting the rural masses and the vulnerable sections. These companies were able to

carry out the mandate given by the government even if it meant that they had to suffer

some losses, because the tariff allowed them enough margin in other segments to cover

these losses. This situation would alter with entry of private players and removal of

tariffs. The cushion enjoyed by the PSUs would disappear and they have to compete with



private sector for business and they would then be unable to take on any additional load

imposed by the government by way of obligations to the poor. It was then argued by

many academicians that all business relating to rural areas and weaker sections need not

be loss making and all insurers should have the obligation to serve the rural areas and

weaker sections. The Insurance Act was, therefore, amended authorizing the Regulator to

lay down certain obligations on the insurers towards rural areas and weaker sections.

The Authority notified the regulations on obligations of insurers towards the rural and

social sectors in the year 2000. The definition of rural area is in accordance with the one

provided by the Census of India. It is mandatory for all insurers to comply with the rural

and social sector obligations which are linked to the year of commencement of operations

of the respective company.

Concerns and expectations

The Insurance industry has, in the last 7 years, grown enormously. Global players are

interested in the market and are anxious to come to India. There is a vast untapped

potential with a major portion of the savings parked in Banking sector. Part of those

savings can easily migrate to insurance. While the Authority is happy about the positive

developments in the sector, there are still some concerns in certain areas.

Advantages of investing in ULIP:

ULIPs have been selling like proverbial `hot cakes' in the recent past and they are likely

to continue to outsell their plain vanilla counterparts going ahead. So what is it that

makes ULIPs so attractive to the individual is, as follows

1. Insurace cover plus savings: ULIP serve the purpose of providing life insurance

combined with savings at market-linked returns. To that extent, ULIPs can be termed as a

two-in-one plan in terms of giving an individual the twin benefits of life insurance plus



savings. This is unlike comparable instruments like a mutual fund for instance, which

does not offer a life cover.

2. Multiple investment options: ULIP offer a lot more variety than traditional life

insurance plans. So there are multiple options at the individual's disposal. . ULIPs

generally come in three broad variants:

Aggressive ULIPs (which can typically invest 80%-100% in equities, balance in

debt)

Balanced ULIPs (can typically invest around 40%-60% in equities)

Conservative ULIPs (can typically invest up to 20% in equities)

Although this is how the ULIP options are generally designed, the exact debt/equity

allocations may vary across insurance companies. Individuals can opt for a variant based

on their risk profile. For example, a 30-Yr old individual looking at buying a life

insurance plan that also helps him build a corpus for retirement can consider investing in

the Balanced or even the Aggressive ULIP. Likewise, a risk-averse individual who is not

comfortable with a high equity allocation can opt for the Conservative ULIP.

3. Flexibility: Mutual Funds also offer hybrid/balanced schemes that allow an individual

to select a plan according to his risk profile. The difference lies in the flexibility that

ULIPs afford the individual. Individuals can switch between the ULIP variants outlined

above to capitalize on investment opportunities across the equity and debt markets. Some

insurance companies allow a certain number of `free' switches. This is an important

feature that allows the informed individual/investor to benefit from the vagaries of

stock/debt markets. For instance, when stock markets were on the brink of 7,000 points

(Sensex), the informed investor could have shifted his assets from an Aggressive ULIP to

a low-risk Conservative ULIP.



Switching also helps individuals on another front. They can shift from an Aggressive to a

Balanced or a Conservative ULIP as they approach retirement. This is a reflection of the

change in their risk appetite, as they grow older.

4. Works like an SIP: Rupee cost-averaging is another important benefit associated with

ULIPs. With an SIP, individuals invest their monies regularly over time intervals of a

month/quarter and don't have to worry about `timing' the stock markets. As a matter of

fact, even the annual premium in a ULIP works on the rupee cost-averaging principle. An

added benefit with ULIPs is that individuals can also invest a one-time amount in the

ULIP either to benefit from opportunities in the stock markets or if they have an

investible surplus in a particular year that they wish to put aside for the future.



The chart below shows how ULIP can meet multiple needs at different life stages.

Integrated Financial Planning

Starting a job,

Single individual

Recently married,

no kids

Married, with

kids

Your

Need

Low protection,

high asset creation

and accumulation

Reasonable

protection, still

high on asset

creation

Higher protection,

still high on asset

creation but

steadier options,

increase savings

for child

Flexibility Choose low death

benefit, choose

growth/balanced

option for asset

creation

Increase death

benefit, choose

growth/balanced

option for asset

creation

Increase death

benefit, choose

balanced option for

asset creation.

Choose riders for

enhanced

protection. Use

top-ups to increase

your accumulation



Kids going to

school, college

Higher studies for child,

marriage

Children independent, nearing

the golden years

Higher Protection,

high on asset

creation but

steadier options,

liquidity for

education expenses

Lump sum money for

education, marriage. Facility to

stop premium for 2-3 yrs for

these extra expenses

Safe accumulation for the golden

yrs.Considerably lower life

insurance as the dependencies

have decreased

Withdrawal from

the account for the

education expenses

of the child

Withdrawal from the account

for higher education/marriage

expenses of the child. Premium

holiday-to stop premium for a

period without lapsing the

policy

Decrease the death benefit-

reduce it to the minimum

possible. Choose the income

investment option. Top-ups form

the accumulation (with reduced

expenses) for the golden yrs cash

accumulation

Because of their flexibility to adjust to different life stage needs, ULIPs fit in very well

with financial planning efforts.



COMPANY PROFILE

Background and Inception of the company

ICICI Prudential Life Insurance Company Limited (‘the Company’) a joint venture

Between ICICI Bank Limited and Prudential plc of UK was incorporated on July

20, 2000 as a company under the Companies Act, 1956 (‘the Act’). The Company

is licensed by the Insurance Regulatory and Development Authority (‘IRDA’) for

carrying life insurance business in India.

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 (UK). The company brings together

the local market expertise and financial strength of ICICI Bank and Prudential’s

International life insurance experience. The company was granted a certificate of

Registration by the IRDA on November 24, 2000 and eighteen days later, issued its first

policy on December 12. 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).

From its early days, ICICI Prudential seemed to have the wherewithal for a large-scale

business. By March 31, 2002, a little over a year since its launch, the company had issued

100,000 policies translating into premium income of approximately Rs. 1,200 million on

a sum assured of over Rs.23 billion. When the company began its operations, the need

was to build a brand that was relatable to, symbolized trust and was easily recognized and

understood. It launched a corporate campaign ICICI Prudential also made using the

theme of ‘Sindoor’ to epitomize protection, trust, togetherness and all that is Indian;

endearing itself to the masses. The success of the campaign, ‘the calling card of the



company’ saw the brand awareness scores almost at par with its 40 year old competitor.

The theme of protection was also extended to subsequent product and category specific

Campaigns –from child plans to retirement solutions –which highlight how the company

will be with its customers at every step of life.

From day one, the company has unflinchingly focused on being mass-market player,

developing products, creating a distribution network and deploying resources that would

further its goal. Apart from ramping up thoroughly training its advisors, the company has

twelve ‘Bancassurance’ partners –the largest in the country. It swiftly revised and added

to its initial range of products, pioneering market-linked products and pension plans, to

offer customers the most flexible life insurance policies in the country. In February 2004,

ICICI Prudential increased its capital base by Rs. 500 million, its ninth capital hike,

bringing the total paid –up equity capital to Rs. 6,750 million. With the authorized capital

of the company standing at Rs. 12 billion, ICICI Prudential continues to have the highest

capital base amongst all life insurers in the country. The challenge ICICI Prudential now

faces is to retain its top-notch position and continue to deliver the finest life insurance

and pension solutions to its ever-growing customer base.

ICICI Prudential’s equity base stands at Rs. 1185 crore with ICICI Bank and Prudential

plc holding 74% and 26% stake respectively. For the year ended March 31, 2006, the

company garnered Rs.2, 412 crore of weighted new business premium and wrote 837,963

policies. The sum assured in force stands at Rs.45, 888 crore. The company has a

network of over 72,000 advisors; as well as 9 bancasurance partners and over 200

corporate agent and broker tie-ups.

ICICI Prudential is also the only private life insurer in India to receive a National Insurer

Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA rating is the highest

credit rating, and is a clear assurance of ICICI Prudential’s ability to meet its obligations

to customers at the time of maturity or claims. For the past five years, ICICI Prudential



has retained its position as the No.1 private insurer in the country, with a wide range of

flexible products that meet the needs of the Indian customer at every step in life.

Beginning operations in December 2000, ICICI Prudential’s success has been meteoric,

becoming the number one private life insurer within months of launch. Today, it has one

of the largest distribution networks amongst private life insurers in India, with branches

in 54 cities. The total number of policies issued stands at more than 780,000 with a total

sum assured in excess of Rs.160 billion.

ICICI Prudential closed the financial year ended march 31, 2004 with a total received

premium income of Rs. 9.9 billion; up 135% last years total premium income of Rs.4.20

billion. New business premium income shows a 106% growth at Rs. 7.5 billion, driven

mainly by the company’s range of unique unit-linked policies and pension plans. The

company’s retail market share amongst private companies stood at 36%, making it clear

leader in the segment. To add to its achievements, in the year 2003/04 it was adjudged

Most Trusted Private Life Insurer (Economic Times ‘Most Trusted Brand Survey’ by AC

Nielsen ORG-MARG). It was also conferred the ‘Outlook Money-Best Life Insurer’

award for the second year running. The company is also proud to have won Silver at

EFFIES 2003 for its ‘Retire from work, not life’ campaign. Notably, ICICI Prudential

was also short-listed to the final round for its ‘Sindoor campaign in EFFIES 2002.

ICICI Prudential’s success is rooted in its philosophy to always offer the customer a

choice. This has been the driving force behind its multi-channel distribution strategy,

which includes advisors, banks, direct marketing and corporate agents. In fact, ICICI

Prudential was the first life insurer to invest in multiple channels and offer the customer

choice and access; thus reducing dependency on any one channel, great strides in the

retirement solutions and pensions market.

The Company’s penetration of the retirement market was driven by the focused approach

towards creating awareness through sustained campaign; ‘Retire from work, not life’.



Within six months, the campaign rewarded ICICI Prudential with an increased share of

23% of the total pensions market and 78% amongst private players.

OBJECTIVE OF THE COMPANY

It will be the endeavor of ICICI Prudential Life Insurance Company Ltd. to

promote a safe, secure, congenial and productive work environment where staff members

will deliver their best without any inhibition, threat or fear. The Company will not

tolerate verbal or physical conduct by any staff member that harasses, disrupts, or

interferes with another’s work performance or that which creates an intimidating,

offensive, or hostile environment.

The Company will actively communicate its policy on Workplace

Harassment to all staff members to spread awareness and thereby, attempt to prevent

incidence of such harassment. In the unlikely event of such an occurrence, the Company

will initiate prompt and strong disciplinary action in line with the stated Policy.

ABOUT THE PROMOTERS:

A) 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 1750ATMs. It offers a wide

range of banking products and financial services to corporate and retail customers

through a variety of delivery channels and through its specialized subsidiaries and

affiliates in the areas of investments banking, life and non–life insurance, venture capital,

asset management and information technology. ICICI bank posted a net profit of Rs1,637

crore for the year ended March 31,2004 .ICICI Bank’s equity shares are listed in India on

stock exchanges at Chennai, Delhi, Kolkata and vadodare, 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).



B) PRUDENTIAL

Established in London in 1848, Prudential plc, through its businesses in the UK and

Europe, the US and Asia, Provides retail financial services products and services to

more then 16 million customers, policyholder and unit holders worldwide. As of June 30,

2004, the company had over US$300 billion in funds under management. 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 the leading European life insurance company with a vast

network of 24 life and mutual fund operations in twelve countries-China, Hong Kong,

India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand

and Vietnam.

HISTORY AND GROWTH

DISTRIBUTION

ICICI Prudential has one of the largest distribution networks amongst private life

insures in India, having commenced operations in 69 cities and towns in India. That are

Agra, Ahmedabad, Ajmer, Allahabad, Amristar, Aurangabad, Bangalore, Barely,

Bhatinda, Bhopal, Bhubhaneshwar, Calicut, Chandigarh, Chennai, Coimbatore,

Dehradun, Durgapur, Faridabad, Goa, Guntur, Gurgaon, Guwahati, Gwalior, Hyderabad,

Hubli, Indore, Jaipur, Jalandhar, Kota,cochin Kottayam, Lucknow, Ludhiana, Madurai,

Mangalore, Meerut, Mumbai, Mysore, Nagpur, Nasik, Noida, New Delhi, Patiala, Pune,

Raipur, Rajkot, Ranchi, Rourkela, Salem, Siliguri, Surat, Thane, Thrissur, Trichy,

Trivandrum, Udaipur, Vadodara, Vapi, Varanasi, Vashi, Vijayavada and Vizag.

The company has seven bank assurance ties – ups, having agreements with ICICI Bank,

South Indian Bank, Bank of India, Lord Krishna Bank and some co-operative Banks, as



well as 160 corporate agents and brokers. It has also tied up with organizations like Dhan

for distribution of Salaam Zindagi, a policy for the socially and economically

underprivileged sections of society.

ICICI prudential has recruited and trained about 50,000 insurance advisors to interface

with and advice customers. Further, It leverages its state–of-the–art IT infrastructure to

provide superior quality of service to customers.

The insurance sector was monopoly of L.I.C. for the past 4 decades. So liberalization has

assured a new era of competition in this sector. Liberalization will bring about strong

marketing of policies by rival firms, which is expected to benefit the customers through a

wider range of products and better services. Insurance is a kind of product that is rarely

bought by the customers and in most cases they are sold to them, so it is essential for the

insurance company to market their products rightly and make people aware of it. Very

soon the market will be flooded with large number of products by a large number of

insurers operating in the Indian market. The potential for growth in the Indian market can

be gauged by the fact that the Indian Insurance Market registered the highest growth in

the Asian region even though India’s share of global insurance market is less than 0.5%

(1998). The private players know that market penetration is low and the potential to

exploit is high.

Some of the other factors that make the Indian Market lucrative are that the Insurance

premier per capita in India is very low and the presence of a very large middle class. The

Confederation of Indian Industry (CII) has projected a growth of Life Insurance premium

from Rs.350 Billion to Rs.1400 billion by 2009. The existing level of awareness of

consumers for insurance products is very low. It is so because only 62% of the Indian

population is educated and less than 10% are well educated. Even the educated

consumers are ignorant about the various products of insurance. Hence it is necessary that

all the insurance company should undertake the extensive plan for educating the

customer.



OWNERSHIP PATTERN

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 IRDA.ICICI Prudential’s equity base stands at Rs.8.25 billion

with ICICI Bank and Prudential holding 74% and 26% stake respectively. In the half year

ended September 30, 2004 the company garnered Rs 498 Crore of new business premium

for a total sum assured of over Rs 23,000 Crore and had over 1 million policies. The

company has a network of over 40,000 advisors; as well as 7 banc assurance tie-ups.

Today, ICICI Prudential has emerged as the No. 1 private life insurer in the country, with

a wide range of flexible products that meet the needs of the Indian customer at every step

in life.

SERVICE

ICICI Prudential has recruited and trained over 83,000 insurance agents to interface with

and advise customers and has the highest number amongst private life insurers on the

Renowned Million Dollar Round Table (MDRT). Further, it leverages its state-of-the-art

IT infrastructure to provide superior quality of service to customers.

Consumer Education

ICICI Prudential has taken the lead in educating the market including seminars on

financial planning and retirement planning

Rural awareness: Gram Sabhas, e-Choupals, Project Shakti, Speaking regional languages

FINSITE - nearly 2000 people have enrolled in the program Newsletters - claims, funds

and group.



ICICI Prudential covers all types of consumers across their life stages, thus ensuring

cover for their entire associated goal based savings

Transparency

Only insurance company to include a key feature document of the policy to the policy

holder

Disclosure of portfolio in the quarterly newsletter

Unit statement

Daily NAV

Customer Centric

ICICI Prudential was the first company in the insurance space to decrease commissions

in a bid to increase overall customer value.

Senior management team visits customers to get their feedback on their policy

and service experience (30 visits a month and 300 in a year).

ICICI Prudential has the widest bouquet of need based products.

Service Delivery

ICICI Prudential has rigorous Six Sigma processes in place. Projects have been

undertaken in several customer-facing processes such as policy issuance, medical

process, premium ratings, etc.

Policy Issuance All policies issued within 10 working days.

Jet - 2003 sigma level was 1.9, currently it is 3.25.

Medical Process 1.9 in 2003 to 3 sigma now

Rating of Premiums Counteroffer acceptances up from 15% (Oct 2002) to 60%

(current)



ABOUT ICICI PRUDENTIAL

BOARD OF DIRECTORS

The ICICI Prudential Life Insurance Company Limited Board comprises reputed

people from the finance industry both from India and abroad.

Ms.Chanda.D.Kochhar, Chairperson

Mr.N.S.Kannan, Director

Mr.K.Ramkumar, Director

Mr.Barry.Stowe, Director

Mr.Adrian.O’Connor, Director

Mr.Keki.Dadiseth, Independent Director

Prof.Marti.G.Subrahmanyam, Independent Director

Ms.Rama.Bijapurkar, Independent Director


http://www.iciciprulife.com/

http://www.icicibank.com/

http://www.icicilombard.com/


Mr.Vinod.Kumar.Dhall, Independent Director

Mr. V. Vaidyanathan, Managing Director & CEO

Management Team

The ICICI Prudential Life Insurance Company Limited Management team comprises

reputed people from the finance industry both from India and abroad.

Mr.V.Vaidyanathan,ManagingDirector&CEO

Ms.AnitaPai, ExecutiveVice President - Customer Service, Technology & Marketing

Dr.Avijit.Chatterjee,Appointed.Actuary

Mr. Puneet Nanda, Executive Vice President

The company has its Registered Office at Mumbai

ICICI Prudential Life Insurance Company Limited

ICICI Prulife Towers, 1089, Appasaheb Marathe Marg,

Prabhadevi, Mumbai- 400025, India.

A JOINT VENTURE BETWEEN ICICI BANK (74%) & PRUDENTIAL

CORPORATION (26 %)

SLOGAN OF ICICI PRUDENTIAL LIFE INSURANCE

We cover you at every step in life

(Suraksha Zindagi ke har kadam par, as interpreted in Hindi).

ICICI Prudential was positioned as an enabler of protection relevant to the needs of the

life stage.


http://www.iciciprulife.com/public/About-us/ProfileTeam-PuneetNanda.htm

http://www.iciciprulife.com/public/About-us/ProfileTeam-Dr.%20Avijit%20Chatterjee.htm

http://www.iciciprulife.com/public/About-us/ProfileTeam-AnitaPai.htm

http://www.iciciprulife.com/public/About-us/ProfileTeam-Vaidyanathan.htm


VISION:

To make ICICI Prudential the dominant Life and Pensions player built on trust by world-

class people and service.

This we hope to achieve by:

Understanding the needs of customers and offering them superior products and

service

Leveraging technology to service customers quickly, efficiently and conveniently

Developing and implementing superior risk management and investment

strategies to offer sustainable and stable returns to our policyholders

Providing an enabling environment to foster growth and learning for our

employees

And above all, building transparency in all our dealings.

The success of the company will be founded in its unflinching commitment to 5 core

values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the

values describe what the company stands for, the qualities of our people and the way we

work.

MISSION:

ICICI Prudential is committed to provide insurance solutions and services that meet or

exceed the requirements of the clients. We shall strive to enhance customer satisfaction

through continual improvement of processes and by improving the competence of our

employees.

CORE VALUES

The success of the company will be founded in its unflinching commitment to 5



Customer First

Bounder less

Ownership

Passion

Integrity

We do believe that we are on the threshold of an existing new opportunity, where we can

play a significant role in redefine and reshaping the sector. Given the quality of our

parentage and the commitment of our team, there are no limits to our growth.

AWARDS WON BY ICICI BANK AND PRUDENTIAL

The bank has got ISO certification ISO 9001 2000

“Bank of the Year Award for India” by The Banker

“Best Bank in India” by Euro (2005)

Best Bank in India" by Euro.

"Best Bank" by Business India (2004)

Prudential UK awarded “Best Pension Provider”

What Investment magazine (2004)

“Most Competitive Annuity Provider of the Year”

Money facts (2004 & 2003)

The first Financial Services Company to get the status of Super Brand

Half-million policy milestone – November 2003

Rs 1000 cr premium income milestone – December 2003

1 million-policy milestone – September 2004

More than 5000 Cr. in Funds under management – Sept 2005



5 Years of leadership among Private Life Insurers – Dec 2005

AWARDS ACHIEVED BY ICICI PRUDENTIAL

ICICI Prudential was voted the No.1 Company in a list of China’s top five insurance

companies with the greatest potential for growth and development at the 2004 World

Financial Laboratory Annual Awards.

ICICI Prudential Life was named ‘Best Life Insurer’ at the Outlook Money Awards

2003-2004. This was the second consecutive year that ICICI Pru won this award.

Prudential ICICI Asset Management and ICICI Prudential Life are among the top 50

most trusted services brands in India according to an independent survey by A.C. Nielsen

during 2003.

For the second successive year, Prudential Vietnam was awarded the Golden Dragon

Prize in 2003 – an annual award honoring the strongest foreign companies in Vietnam.

At the Yahoo! Emotive Brand Awards 2003-2004 Prudential was voted as one of the

most appealing and emotive brands by Hong Kong Internet users, which highlights the

strong public recognition of Prudential as a caring and listening company.

PCA LIFE (Korea) received the Global Marketing Grand Prix (Overseas Company)

Award for the successful launch of their PCA Platinum Annuity.

PCA Life (Taiwan) was named as one of the five ‘most reputable’ life insurance

companies in Taiwan for 2003 by Commonwealth magazine.

At the Investment Fund Awards 2003, the Prudential Singapore “PRUlink Singapore

Managed Fund” won the 10-year Special Award for the highest absolute return over 10

years in the Singapore authorized Investment-Linked Products category.

PCA Securities Investment Trust’s Hi-Tech Fund was recognized by Standard & Poor’s

Taiwan Investment Funds Awards 2003 as the Best Performing Fund in the ‘Three-year

Taiwan TMT (Technology Media Telecommunication)’ category.



COMPETITORS IN INSURANCE INDUSTRY:

a) LIC -Fully owned by Government.

b) Postal Life Insurance.

Private Players -

a) Bajaj Allianz Life Insurance Co. Ltd.

b) Birla Sun Life Insurance Co. Ltd.

c) HDFC Standard Life Insurance Co. Ltd.

d) ICICI Prudential Life Insurance Co. Ltd.

e) ING Vysya Life Insurance Co. Ltd.

f) Max New York Life Insurance Co. Ltd.

g) MetLife India Insurance Co. Pvt. Ltd.

h) Kotak Mahindra Old Mutual Life Insurance Co. Ltd.

i) SBI Life Insurance Co. Ltd.

j) TATA AIG Life Insurance Co. Ltd

k) AMP Sanmar Assurance Co. Ltd.

l) Aviva Life Insurance Co. Ltd.

m) Sahara India Life Insurance Co. Ltd.

n) Shriram Sunlam.

o) PNB Life Insurance.

p) Reliance Life Insurance.

q) Axa Bharti Enterprises.



WORK FLOW

Actuary

Actuary is a group of mathematician who making insurance product, and these are

the people analyses customers’ requirement and also follows Government policies and

regulation etc. They are well aware about what customers looking for… They are

creating initial insurance product.

Under writers

After making initial insurance product actuaries forward this initial product to under

writers, these people are the real risk-taking people who make initial insurance product

into final product. After under writing final insurance product move to marketing

developers.

Market Developers

These people taking care of further development of product. They will deals with

distribution and promotion activities. Then the product will move to sales people who

directly contact with customers.

Sales people

Sales people are the people directly contact with customers. Its ability of sales

people to give clear idea regarding the new product to the customers. Insurance company

contact with customers through sales persons.



Work flow structure:

Babasabpatilfreepptmba.com

ACTURY

FORM

POLICIES

GOVERNMENT

UDER

WRITERS

UNDER

WRITERS

MARKET

DEVELOPERS

ADVERTISEMENT

AGENCIES

SALES PEOPLE

CUSTOMERS

46


PRODUCTS

INSURANCE SOLUTIONS 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 products can be

enhanced with up to 5 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.

Life Time & Life Time II offer customers the flexibility and control to

customize the policy to meet the changing needs at different life stages. Each

offer 4 fund options Preserver, Protector, Balancer and Maximiser.



Life Link II is a single premium Market Linked Insurance Plan which combines

life insurance cover with the opportunity to stay invested in the stock market.

Premier Life is a limited premium paying plan that offers customers life

insurance cover till the age of 75.

Invest Shield Life is a Market Linked plan that provides capital guarantee on the

invested premiums and declared bonus interest.

Invest Shield Cash is a Market Linked plan that provides capital guarantee on

the invested premiums and declared bonus interest along with flexible liquidity

options.

Invest Shield Gold is a Market Linked plan that provides capital guarantee on

the invested premiums and declared bonus interest along with limited premium

payment terms.

PROTECTION SOLUTIONS

Life Guard is a protection plan, which offers life cover at very low cost. It is

available in 3 options? level term assurance, level term assurance with return of

premium and single premium.

Home Assure is a mortgage reducing term assurance plan designed specifically

to help customers cover their home loans in a simple and cost-effective manner.

CHILD PLANS

Smart Kid education 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.



Smart Kid plans are also available in unit-linked form ? both single premium and

regular premium.

RETIREMENT SOLUTIONS

ForeverLife is a retirement product targeted at individuals in their thirties.

SecurePlus Pension is a flexible pension plan that allows one to select between 3

levels of cover.

MARKET-LINKED RETIREMENT PRODUCTS

Lifetime Pension IIis a regular premium market-linked pension plan

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

Invest Shield Pension is a regular premium pension plan with a capital guarantee

on the investible premium and declared bonuses.

Golden Years: is a limited premium paying retirement solution that offers tax

benefits up to Rs 100,000 u/s 80C, with flexibility in both the accumulation and

payout stages.

ICICI Prudential also launched “Salaam Zindagi”, a social sector group insurance policy

targeted at the economically underprivileged sections of the society.

HEALTH SOLUTION

Health Assure: Is a regular premium plan which provides l ong term cover

against 6 critical illnesses by providing policyholder with financial assistance,

irrespective of the actual medical expenses.



Health Assure Plus: Is a regular premium plan which provides long term cover

against 6 critical illnesses by providing financial assistance, irrespective of actual

medical expenses, as well as an equivalent life insurance cover

GROUP INSURANCE SOLUTIONS

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

benefits to their employees.

ICICI Pru Group Gratuity Plan: ICICI Pru’s group gratuity plan helps

employers fund their statutory gratuity obligation in a scientific manner. The plan

can also be customized to structure schemes that can provide benefits beyond the

statutory obligations.

ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined

contribution superannuation scheme to provide a retirement kitty for each member

of the group. Employees have the option of choosing from various annuity

options or opting for a partial commutation of the annuity at the time of

retirement.

ICICI Pru Group Term Plan: ICICI Pru’s flexible group term solution helps

provide affordable cover to members of a 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 Prudential Life offers flexible riders, which can be added to the basic policy at a

marginal cost, depending on the specific needs 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

rider sum assured under the policy. If the death occurs while traveling in an

authorized mass transport vehicle, the beneficiary will be entitled to twice the sum

assured as additional benefit.

Accident Benefit: This rider option pays the sum assured under the rider on death

due to accident.

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

expenses prior to death.

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

Smart Kid, Secure Plus and Cash Plus

Waiver of Premium: In case of total and permanent disability due to an accident,

the premiums are waived till maturity. This rider is available with Secure Plus and

Cash Plus.

The Structure

The structure of the organization represents the hierarchy of the organization. It

represents the reporting system of the organization. Thus, organization structure is the

pattern of relationships among various activities and positions. From the structure or



organ gram of the organization we can have a clear picture of the responsibility of the

personnel working in the organization. It refers to the differentiation and integration of

activities and authority, role and relationships in the organization. Hence organization

structure is the basic framework within which the manager’s decision-making behavior

takes place.

In ICICI Prudential Life Insurance the structure of the organization represents the

hierarchy of the organization.

ORGANIZATION CHART

DETAILED STUDY OF DEPARTMENTS

Tied Agency



Tied Agency is the largest distribution channel of ICICI Prudential, comprising a large

advisor force that targets various customer segments. The strength of tied agency lies in

an aggressive strategy of expanding and procuring quality business. With focus on sales

& people development, tied agency has emerged as a robust, predictable and sustainable

business model.

Bancassurance and Alliances

ICICI Prudential was a pioneer in offering life insurance solutions through banks and

alliances. Within a short span of two years, and with nearly a large number of partners,

B & A has emerged as a vital component of the company’s sales and distribution

strategy, contributing to approximately one third of company’s total business.

The business philosophy at B&A is to leverage distribution synergies with our partners

and add value to its customers as well as the partners. Flexibility, adaptation and

experimenting with new ideas are the hallmarks of this channel.

Customer Service and Operations

The Operations department oils the work processes between the customer and the

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 underwriters, and manages work processes.

The Vision at Customer Service is to deliver ‘World Class Service’ at every opportunity.

Units such as the 9 to 9 contact centre, Outbound Call Centre, Customer Care and Query

Resolution Unit are all committed to providing effective solutions to over lakhs of

customers across the country.

Information Technology

The Information Technology function at ICICI Prudential is committed to enable

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 offerings to end-users, the Solutions Group- Web that provides

real-time information to customers and is responsible for customer relationship

management, IT Architecture & 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 organization. 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 deployment of business application.

Marketing

The Marketing function at ICICI Pru covers an array of activities - brand and media

management, channel support, direct marketing and corporate communications. The

Brand and Communications team is in charge of advertising, consumer research, media

planning & buying and Public Relations; that helps develop and nurture ICICI

Prudential's corporate identity while effectively communicating its varied product

offerings to the customer. Channel marketing provides support to the sales force by

streamlining the design and development of collaterals and sales tools across distribution

channels. The Direct marketing team was set up to generate high quality leads for

profitable business. The team achieves this through target database acquisition and

communicating customized product information through e-mailers, telemarketing and

innovative direct mailers.

Finance

Finance function in ICICI Prudential is committed to create an infrastructure that is

aligned to shareholder expectations. Finance basically comprises of four functions. .



Corporate Planning and MIS provide feedback on business strategies. This includes

driving the budgeting process, providing strategic inputs for decision-making and

management reporting and analysis. The Accounts function includes preparation and

maintenance of financial records, funds management, and expense processing and

treasury operations. Compliance ensures that every action is within the regulatory

framework. This includes reviewing compliance requirements and supporting the ethical

framework of ICICI Pru life. Internal audit provides assurance to the management over

the organizations' control framework and includes process risk management, information

security assessment and business continuity assessment.

Human Resource

The people strategy of ICICI Prudential is “To build a committed team with a culture of

innovation, learning and growth. The Human Resource Function at ICICI Prudential

drives the people strategy of the business. With its initial focus on operational excellence

to deliver benefits and services to staff members, HR is now committed to building

capability through state of the art processes. A robust performance management system,

compensation system and a segmented training architecture enable it to deliver value to

the organization.

Business Excellence

The Business Excellence function is committed to building a quality mindset across the

organization. ICICI Prudential is the first organization in the Insurance Industry that has

adopted the Six Sigma Methodology for process efficiency and measurement. The team

is also driving the Malcolm Baldrige framework across the organization, an intervention

that examines management of key inputs for Business Excellence.

SWOT ANALYSIS OF ICICI PRUDENTIAL LIFE INSURANCE



Strength

Wide variety of products offered by the company

High quality service delivered by the company

Wide spread distribution network has helped to increase its operations

Dedicated staff and advisors of the company has helped the company to issue

highest numbers of policies and thereby achieve No. 1 place amongst private

players.

Advertisement campaigns of the company to create awareness among people as

been successful and also become one of the biggest strength of the company.

Weakness

The product offered is little expensive compared to LIC and cannot be afforded

by lower income group.

The operation of the company is limited to major cities and towns.

Opportunities

Company can extend its operation to rural and sub-urban areas by developing

products which suit their needs.

Since most of the insurable population in our country is unaware of the life

insurance, therefore the company can undertake aggressive marketing and

thereby tap this uninsurable segment.

Threats

Stiff competition from LIC and other private players like Birla Sun life, HDFC std

life etc

Anticipated tax rates will have a direct impact on the demand of the Insurance.



RESEARCH METHODOLOGY

PROJECT TITLE:

“A study of investment decisions of individual investor with regard to UNIT LINKED

INSURANCE PLANS at ICICI prudential life insurance co ltd HUBLI branch”

TYPES OF DATA COLLECTED

a. Primary Data Collection: Primary data has been collected for the study

With the aid of questionnaire.

b. Secondary Data Collection: Secondary data has been collected from

Website and Brochures

SAMPLING

Sampling Method: Random Selection

Sample Size: 100

SURVEY

The survey has been conducted in the Hubli city.



MEASURING TOOLS:

SPSS Software used for measuring the response is in terms of percentage method using

graphical charts like Bar graphs and Pie charts.

Frequencies:

Frequency 1gender

94 94.0 94.0 94.0

6 6.0 6.0 100.0

100 100.0 100.0

male

female

Total

ValidFrequency Percent Valid Percent

CumulativePercent

gender

female

male



Analysis:

The above table indicates that among 100 respondents 94% are male respondents and

only 6% are female respondents.

Interpretation:

From the survey we came to know that maximum numbers of respondents are male. Very

few respondents are female.

Frequency 2

age

27 27.0 27.0 27.0

71 71.0 71.0 98.0

1 1.0 1.0 99.0

1 1.0 1.0 100.0

100 100.0 100.0

15-25

26-45

46-55

56-65

Total


CumulativePercent



age

56-65

46-55

26-45

15-25

Analysis:

The above chart indicates that out of 100 respondents 27% of respondents fall under the

age group of 15-25, 71% of respondents fall under the age group of 26-45, only 1% are

fall under age group 46-55 and another 1% of respondent fall under the age group of

56-65.

Interpretation:

From the survey we come to know that most of the respondents are between the age

group of 26-45.

Frequency 3

occupation

16 16.0 16.0 16.0

57 57.0 57.0 73.0

13 13.0 13.0 86.0

4 4.0 4.0 90.0

10 10.0 10.0 100.0

100 100.0 100.0

salaried govt employee

salaried pvt employee

business man

professional

retired and others

Total


CumulativePercent



occupation

retired and others

professional

business man

salaried pvt employe

salaried govt employ

Analysis:

The above table shows out of 100 respondents 16% of are govt employees, 57% of are

pvt employees, 13% of respondents are businessmen’s, only 4% of respondents are

professionals and 10% of respondents are retired and others.

Interpretation:

From the survey we came to know that most of the respondents are salaried private

employee and the remaining are govt, professionals, and businessmen’s.

Frequency 4



income

95 95.0 95.0 95.0

4 4.0 4.0 99.0

1 1.0 1.0 100.0

100 100.0 100.0

below 2,00,000

2,00,000-5,00,000

above 5,00,000

Total


CumulativePercent

income

above 5,00,000

2,00,000-5,00,000

below 2,00,000

Analysis:

The above table indicates that out of 100 respondents 95% of respondents income level

is below 2,00,000 , 4% of respondents income level is between 2,00,000-5,00,000 and

only 1% of respondents income level is above 5,00,000.

Interpretation:

From the survey we came to know that most of the respondent’s income level is below

200000 and only one respondent income level is greater than 500000.



Frequency 5

are you aware of unit linked insurance plans?

96 96.0 96.0 96.0

4 4.0 4.0 100.0

100 100.0 100.0

yes

no

Total


CumulativePercent



noyes

Fre

qu

en

cy

120

100

80

60

40

20

0

Analysis:

The above table shows that out of 100 respondents 96% of respondents are aware of

ULIP and 4% are not aware.

Interpretation:

From survey we came to know that awareness level of ULIP is more among the

respondents and least respondents unaware.



Frequency 6

how are you made aware of about new ulips?

4 4.0 4.0 4.0

38 38.0 38.0 42.0

32 32.0 32.0 74.0

7 7.0 7.0 81.0

19 19.0 19.0 100.0

100 100.0 100.0

advertisement

family and friends

advisers

internet

Total


CumulativePercent



internet

advisers

family and friends

advertisement

Fre

qu

en

cy

50

40

30

20

10

0

Analysis:

This above chart shows that 38% of the respondents aware of ULIP through

advertisements. 32% of the respondents are getting awareness through family and friends,

7% of the respondents are aware through advisers & 19% of the respondents are aware

from the internet.

Interpretation:

From the survey we came to know that most of the respondents aware of ULIPs through

advertisements Because of insurance co. are creating more awareness through Media’s

ex. Magazines, News papers & TV etc. and least percent of respondents getting

awareness through advisors.



Frequency 7

are you interested investing money on ulip?

4 4.0 4.0 4.0

87 87.0 87.0 91.0

9 9.0 9.0 100.0

100 100.0 100.0

yes

no

Total


CumulativePercent



noyes

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:

This above chart shows that 87% of respondent’s interested investment in ULIP, 9% of

respondents don’t want to invest in ULIP and 4% of the respondents not responded.

Interpretation:

From the survey we came to that most of the respondents are interested to invest the

money on ULIPs. And only least respondents not interested.



Frequency 8

where you want to invest your money?

4 4.0 4.0 4.0

35 35.0 35.0 39.0

9 9.0 9.0 48.0

50 50.0 50.0 98.0

2 2.0 2.0 100.0

100 100.0 100.0

icici pru

bajaj allianz

LIC

aviva life insurance

Total


CumulativePercent



aviva life insuranceLICbajaj allianzicici pru

Fre

qu

en

cy

60

50

40

30

20

10

0

Analysis:

The above table shows out of 100 respondents 50% respondents wants to invest in LIC,

35% respondents wants to invest in ICICI PRU, 9 % in BAJAJ ALLIANZ, only 2% in

AVIVA life and 4% are non respondents.

Interpretation:

From the survey we came to know that most of the respondents want to invest in LIC and

rest are in the other co.



Frequency 9what made you to go for that company?

4 4.0 4.0 4.0

37 37.0 37.0 41.0

18 18.0 18.0 59.0

30 30.0 30.0 89.0

11 11.0 11.0 100.0

100 100.0 100.0

brand name

service

customer relationship

better policy option

Total


CumulativePercent

what made you to go for that company?

what made you to go for that company?

better policy option

customer relationshi

service

brand name

Fre

qu

en

cy

40

30

20

10

0

Analysis:

The above table shows that out of 100 respondents 37% of respondents wants invest in

the company for Brand name,18% respondents wants to invest for the service provided,

30% wants to invest for the customer relationship the company maintains. 11% of

respondents want to invest for the better policy options available, and 4% have not

responded.

Interpretation:



From the survey we came to know that most of the respondents considering brand name

while investing and least percent of respondents consider better policy option while

investing.

Frequency 10

did you ever invested in icici pru?

4 4.0 4.0 4.0

19 19.0 19.0 23.0

77 77.0 77.0 100.0

100 100.0 100.0

yes

no

Total


CumulativePercent



noyes

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:

The above table shows that out of 100 respondents 19 % of the respondents have invested

in ICICI pru and 77 % respondents have not invested and 4% are not responded.

Interpretation:



From the survey we came to know that most of the respondents have not invested ICICI

pru and very least are invested in ICICI pru.

Frequency 11

if yes then which policy do you own of icici pru?

81 81.0 81.0 81.0

3 3.0 3.0 84.0

8 8.0 8.0 92.0

7 7.0 7.0 99.0

1 1.0 1.0 100.0

100 100.0 100.0

savings solution

childrens solution

market linked solution

retirement solution

Total


CumulativePercent



retirement solution

market linked soluti

childrens solution

savings solution

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:

The above table shows 3% of respondent own savings solution policies, 8% of

respondents own child solution policies, 7% of respondents own market linked solutions,

only 1% of the respondent own retirement solution, and 81% not responded.



Interpretation:

From the survey we came to know that most respondents own child plans and very least

are own retirement solutions.

Frequency 12

how much is the premium?

81 81.0 81.0 81.0

4 4.0 4.0 85.0

9 9.0 9.0 94.0

6 6.0 6.0 100.0

100 100.0 100.0

below 12,000

12,000-19999

20,000-50,000

Total


CumulativePercent



20,000-50,00012,000-19999below 12,000

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:

In this chart we conclude that 4% of the respondents are invested below 12000. 9% have

invested between 12000- 19999 and 6% have invested between 20000-50000. These all

are high risk takers. 81% of the clients have not responded.

Interpretation:



From the survey we came to know that most of the respondents are having the premiums

between 12000-19000. Least is having below 12000 premiums.

Frequency 13

how would you rate the services of icici pru?

81 81.0 81.0 81.0

5 5.0 5.0 86.0

12 12.0 12.0 98.0

1 1.0 1.0 99.0

1 1.0 1.0 100.0

100 100.0 100.0

very good

good

average

very bad

Total


CumulativePercent



very badaveragegoodvery good

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:

From the above table out of 100 respondents 5% of customer has rated ICICI PRU as

very good, 12% says good and 1% have rated as average, and only 1% rated very bad.

81% not responded.



Interpretation:

From the survey we came to know that most of respondents rated good for the service

provided by ICICI pru. And least respondents rated very bad.

Frequency 14

how many members in your family have an icici pru policy?

81 81.0 81.0 81.0

7 7.0 7.0 88.0

5 5.0 5.0 93.0

3 3.0 3.0 96.0

4 4.0 4.0 100.0

100 100.0 100.0

everyone

employed individuals

only children

self

Total


CumulativePercent



self

only children

employed individuals

everyone

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:

From the above table 7% respondents say’s all are having the policies, 5% employed

individuals, 3% are only child policies, 4% say’s self and 81% have not responded.

Interpretation:



From the survey we came to know that most respondents said all the family members

having ICICI pru policies. And least is said having only child policies.

Frequency 15

how would you rate the offers and promotional activities of icici pru?

81 81.0 81.0 81.0

4 4.0 4.0 85.0

10 10.0 10.0 95.0

5 5.0 5.0 100.0

100 100.0 100.0

very good

good

average

Total


CumulativePercent



averagegoodvery good

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:

From the above table 4% respondents rated very good, 10% rated good, 5% as average,

and 81% have not responded.

Interpretation:



From the survey we came to know that most of the respondents rated good for the offers

and promotional activities of ICICI pru.

Frequency 16

how do you recognize ulip as investment avenue?

10 10.0 10.0 10.0

38 38.0 38.0 48.0

34 34.0 34.0 82.0

17 17.0 17.0 99.0

1 1.0 1.0 100.0

100 100.0 100.0

exelent

satisfactory

good

poor

Total


CumulativePercent



poorgoodsatisfactoryexelent

Fre

qu

en

cy

50

40

30

20

10

0

Analysis:

The above table shows that out of 100 respondents17% respondents recognize it as good,

10% clients are not preferred, 34% satisfied and 38% clients recognize it as excellent and

1% as poor.

Interpretation:



In order to know the customers, were asked how they recognize ULIP as investment

avenue. It was found that most of the respondents recognized excellent and only least

have recognized as poor.

Frequency 17

what factor do you consider while investing in ulip?

13 13.0 13.0 13.0

28 28.0 28.0 41.0

14 14.0 14.0 55.0

14 14.0 14.0 69.0

31 31.0 31.0 100.0

100 100.0 100.0

higher returns

liquidity

life cover

all the above

Total


CumulativePercent



all the abovelife coverliquidityhigher returns

Fre

qu

en

cy

40

30

20

10

0

Analysis:

Here 28% of the respondents consider high returns, 14% of the respondents consider

liquidity and life cover, and 31% of the respondent considers all above factor and 13%

are not responded.



Interpretation:

From the survey we came to know that most of the respondent considers higher returns,

liquidity and life cover all together and least considers life cover factor while investing.

Frequency 18

what is the reson for not investing?

19 19.0 19.0 19.0

26 26.0 26.0 45.0

27 27.0 27.0 72.0

21 21.0 21.0 93.0

7 7.0 7.0 100.0

100 100.0 100.0

uncertainty

high cost

not interestedin investment

others

Total


CumulativePercent



others

not interested in in

high cost

uncertainty

Fre

qu

en

cy

30

20

10

0

Analysis:

From the above table out of 100 respondents 26% of the respondents are uncertain to

invest. 27% of the respondents think it is high cost and 21% of them are not interested in

investments, 7% of respondent says other and 19% are non respondents.



Interpretation:

From the survey we came to know respondents thinks that ICICI charging high cost and

least are in the category of others.

Frequency 19

according to you which ulip is most preferable for investing?

7 7.0 7.0 7.0

41 41.0 41.0 48.0

47 47.0 47.0 95.0

4 4.0 4.0 99.0

1 1.0 1.0 100.0

100 100.0 100.0

child plans

pension plans

health plans

ohers

Total


CumulativePercent



ohers

health plans

pension plans

child plans

Fre

qu

en

cy

50

40

30

20

10

0

Analysis:

In this order 41% of the respondents preferred child plans, 47% preferred pension plans,

4% preferred health plans, 1% say others and 7% are not responded.

Interpretation:



From the survey we came to know that most of respondents preferred pension plans and

least have preferred others.

Frequency 20

what was your experiance having investing in ulips?

81 81.0 81.0 81.0

15 15.0 15.0 96.0

4 4.0 4.0 100.0

100 100.0 100.0

gained profit

neither profit nor loss

Total


CumulativePercent



neither profit nor lgained profit

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:

When customers were asked experience having invested in ULIP, it was found that 4%

clients said that neither profit nor loss and 15% clients said profit. So it means that clients

are getting profit from investment. Finally it shows that ULIP is performing Good.

Interpretation:



From survey we found that most of investors have gained profit and least of that gained

either profit or loss.

Frequency 21

what is your opinion upon current ulip performance?

11 11.0 11.0 11.0

29 29.0 29.0 40.0

56 56.0 56.0 96.0

4 4.0 4.0 100.0

100 100.0 100.0

exellent

good

better

Total


CumulativePercent



bettergoodexellent

Fre

qu

en

cy

60

50

40

30

20

10

0

Analysis:

Here 4% of respondent agreed that its performing Better and 56% of respondent agreed

that its performing Good and 29% respondent said excellent respectively. And 11% are

not responded.

Interpretation:



From the survey we came to know that most of the respondent opinion upon performance

of ULIP is good and least of that have the better opinion.

Frequency 22

you allways take the help of a advisor while investing in ulips?

16 16.0 16.0 16.0

22 22.0 22.0 38.0

43 43.0 43.0 81.0

10 10.0 10.0 91.0

7 7.0 7.0 98.0

2 2.0 2.0 100.0

100 100.0 100.0

strongly agree

agree

iether agree nor disagre

disagree

strongly disagree

Total


CumulativePercent



strongly disagree

disagree

iether agree nor dis

agree

strongly agree

Fre

qu

en

cy

50

40

30

20

10

0

Analysis:



From the above table 22% are strongly agree, 43% are agree with above, 10% says either

agree nor disagree, 7% are disagree and only 2% are strongly disagree, 16% have not

responded.

Interpretation: From survey we came to know most of the respondents agrees that they will take the help

of advisor while investing in ULIPs and least have strongly disagreed.

Frequency 23

do you have any plan of investing in near future?

7 7.0 7.0 7.0

60 60.0 60.0 67.0

33 33.0 33.0 100.0

100 100.0 100.0

yes

no

Total


CumulativePercent



noyes

Fre

qu

en

cy

70

60

50

40

30

20

10

0

Analysis:

From the above table 60% of respondents plan to invest in ULIP and 33% do not plan to

invest, 7% have not responded.



Interpretation:

From the survey we found most of the respondents planning to invest in near future and

least are not interested in investing in future.

Frequency 24

when do you plan to invest?

36 36.0 36.0 36.0

22 22.0 22.0 58.0

11 11.0 11.0 69.0

31 31.0 31.0 100.0

100 100.0 100.0

right now

after one month

after six month

Total


CumulativePercent



after six monthafter one monthright now

Fre

qu

en

cy

40

30

20

10

0

Analysis:

From the above table 22% of respondents plan to invest right now, 11% after a month

and 7% plan to invest after six months and 36% have not responded.



Interpretation: From the survey we found that most of the respondents investing after six months. And

least is said after a month.

Frequency 25

how likely are you to recommend investment in ulip to your friend?

6 6.0 6.0 6.0

78 78.0 78.0 84.0

16 16.0 16.0 100.0

100 100.0 100.0

definitely will recommend

might not recommend

Total


CumulativePercent



might not recommenddefinitely will reco

Fre

qu

en

cy

100

80

60

40

20

0

Analysis:



The above table indicates that 78 % of the respondents definitely will recommend about

the investment in ULIP. 16 % of the respondents might or might not recommend. 6%

have not responded.

Interpretation:

From the survey we found that most will recommend to their friends least might not

recommend.

FINDINGS

Most of the respondents are having below 2,00,000 income

Awareness level of ULIP is good among the respondents.

Most of the respondents aware of ULIP through advertisements. Because of

insurance co. are creating more awareness through Media’s ex. Magazines, News

papers & TV etc. rest of are getting awareness through family and friends.

Most of the respondents interested to investment in ULIP

Maximum respondents wants to invest in LIC

Most of respondents considers brand name while investing.

Maximum no of respondents have not invested in ICICI.

Most of the respondent invested in ICICI child plans.

Most of the customers have the premiums below 20,000

Most of the respondents rated the service of ICICI as good

Most respondents say’s in there family all are having the ICICI policies

Most customers rated good for ICICI pru’s offers and promotional activities.

Maximum respondents recognize ULIP as investment Avenue

Most of the respondent considers all the factors like higher returns, liquidity and

life cover.

Maximum respondents think ICICI charging high cost.

Most people preferred pension plan for investing.

Most of customers gained profit by investing in ULIP.



Most of the respondent’s opinion upon current ULIP performance is good.

Maximum number of respondents said they take the help of advisor while

investments.

Most of the respondents plan to invest in ULIP.

Maximum respondents plan to invest after six months.

Maximum respondents say’s they will definitely recommend about the investment

in ULIP to his friends.

SUGGESTIONS

Most of the peoples are middle class peoples so the new products have to be

launched according to which that suits there income.

Most of the investors consider brand name so the ICICI should increase there

service quality ex: post sale services, customer relationship. To continue as a

leader in private insurance co.

Maximum number of people takes the help of advisor while investing in ULIP

so the company has to provide proper training for the advisors to plan the

investments according to the needs of the customers.

The insurance sector is still having the untapped market and LIC is the leader

in the sector so the ICICI should have to take step forward to know what are

the individual’s investment decisions, according to their perceptions,

preferences and income levels.



CONCLUSION

The study aimed at identifying investor decisions with regard to ULIPs, so I have

concluded that majority of the respondents are satisfied with ULIPs performance and they

are having good investment decisions. Hence ICICI pru has great potential market in

HUBLI to make an aware about ULIP’s.

This study has basically helped to know how Unit Linked Insurance Plans are working

and how they differ. After comparing investment decisions of individuals it can be

concluded that most of investors go with the brand names and where there is low initial

charges are incurred.



ANNEXURY

QUESTIONNAIRE

Sir/ Madam,

Note: Please tick (√) in the appropriate box.

Respondent profile

NAME:

ADDRESS:

GENDER: Male Female

AGE: 15-25 25-45 45-55 55-65

OCCUPATION: Salaried Govt employee Salaried Pvt Employee

Business man Professional

Retired and others

INCOME (annual): Below Rs. 2, 00,000



Rs.200000 to Rs. 5, 00,000

Above Rs.5, 00,000

1. Are you aware of unit linked insurance plan (ULIP)?

a. Yes b. No

2. How are you made aware of about new ULIPs?

a. Advertisement b. Family & Friends c. advisors

d. Internet

3. Are you interested investing money on unit-linked insurance plan

a. Yes b. no (if no, go to Q. 6)

4. Where you want to invest your money?

a. ICICI prudential b. Bajaj Allianz

c. LIC d. Aviva Life insurance

e. Others………………………….

5. What made you to go for that company?

a. Brand Name b. service

c. Customer relationship d. Better policy option

e. Others (specify)

6. If no

Give reason……………………………………………………………….

7. Did you ever invested in ICICI PRUDENTIAL life Insurance? (If no go to Q.15)

a. Yes b. No

8. If ‘yes’, then which policy do you own of ICICI pru?

a. Savings solution b. Protection solution

c. Children solution d. Marked-linked solution

e. Retirement solution

9. How much is the premium….?

a. below 12,000 b. 12000 to 20000



c. 20000 to 50000 d. more than 50000

10. How would you rate the services of ICICI prudential life insurance?

Very good good average bad very bad

11. How many members in your family have an ICICI Prudential life insurance policy?

a. Everyone b. Employed individuals

c. Only children d. Self

12. How would you rate the offers and promotional activities of ICICI pru?

Very good good average bad very bad

13. How do you recognize ULIP as Investment Avenue?

a. Excellent b. satisfactory c. Good d. Poor

14. What factor do you consider while investing in ULIP?

a. Higher Returns b. Liquidity

c. Life covers d. All the above

15. What is the reason for not investing?

a. Uncertainty b. High cost

c. Not interested in investment d. Others

16. According to you which ULIP is most preferable for investing?

a. child plans b. pension plans c. health plans

d. Other specify…………………………

17. What was your experience having investing in ULIPs?

a. Gained profit b. Neither profit nor loss c. Gained loss

18. What is your opinion upon current ULIP performance?

a. Excellent b. Good c. Better d. Poor

19. You always take the help of a advisor while investing in ULIPs.



Strongly agree agree either agree/nor disagree disagree strongly disagree

20. Do you have any plan of investing in near future? (If no go to Q. 22)

a. Yes b. No

21. When do you plan to invest?

a. right now b. after one month

c. After six months

22. How likely are you to recommend investment in ULIP to your friend?

a. Definitely will recommend

b. Might not recommends



BIBLIOGRAPHY

WWW.iciciprulife.com

WWW.google.com

WWW.icicidirect.com

Business magazines

Product broachers.


Economy & Finance

A project report on a study of investment decisions of individual investor with regard to uli ps