a project report on a study of investment decisions of individual investor with regard to ulips

7/31/2019 A PROJECT REPORT on a Study of Investment Decisions of Individual Investor With Regard to ULIPs

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

ContentsSl. 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

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II Chapter 2

Purpose & need of insurance

Industry profile

IRDA

Organization Profile

Board of directorsWork flow

Organization Chart

Swot analysis

Research methodology

Measuring tools

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III Chapter 3

Analysis and interpretation

Findings

Suggestions

Conclusion

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IV Chapter 4

Annexure

Bibliography

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Babasabpatilfreepptmba.com

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Executive summary

The main aims of the investor is to minimize the risk involved in investment & maximizereturn and today there are number of options available to investor like Post office

investment, bank deposit, Real estate, debentures, Government securities, stock marketinsurance & gold etc. Among these, ULIP introduced by the insurance companies is theoption which require less capital & give the benefit of Professional Management & suitablfor 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 wasestablished 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 i pipeline of expansion to cover some parts of North Karnataka.

ULIP came into play in the 1960s and became very popular in Western Europe andAmericas. In India also it has become popular. Today ULIP contribute 80% of the premiumcollected by the insurance company.


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STATEMENT OF THE PROBLEM

PROBLEM DEFINITION

To know the factors that affects the investment decisions of individual investor whileinvesting in ULIPs

RESEARCH STUDYA 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


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Life insurance is a contract providing for a payment of a sum of money to the personassured 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 givesrise to the necessity for some form of protection against the financial loss arising fromdeath. Insurance substitutes this uncertainty by certainty. The objective of insurance isnormally 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 thesame risks come together and agree that, if any one of the members suffers a loss, theothers 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 throughunexpectedly early death or made non-functional through sickness and disabilities caused by accidents. Accidents may or may not happen. Death will happen, but timing isuncertain. If it happens around the time of ones retirement, when it could be expectedthat the income will normally cease, the person concerned could have made somearrangements to meet the continuing needs. But if it happens much earlier when thealternate arrangements to meet the continuing needs are not in place, insurance isnecessary to help those dependent on the income.

The risk only means that there is a possibility of loss or damage. It may or may nothappen. There has to be an uncertainly about the risk. Insurance is done against thecontingency 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.


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The peril cannot be avoided through insurance. The peril can sometimes be avoidedthrough better safety and damage control management. Insurance only tries to reduce theimpact of the risk on the owner of the asset and those who depend on that asset. It may nofully 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 againstsuch 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 andthat 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 anarrangement 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 becausit encourages the savings habit, second because it provides a safety net to rural and urbanenterprises and productive individuals. And perhaps most importantly it generates longterm inventible funds for infrastructure building. The nature of the insurance business issuch that the cash inflow of insurance companies is constant while the payout is deferredand contingency related. The IRDA bill provides for the establishment of an authority to protect the interest of theholders of insurance policies, to regulate, promote and insure orderly growth of theinsurance industry and amend the insurance Act 1938, the life Insurance Act, 1956 and


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

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 becomeeven more important due to the disintegration of the prevalent joint family system, asystem in which a number of generations co-existed in harmony, a system in which asense 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 ialso a sector which will lead to benefits across the full spectrum, from the individual whowill now have wider choices, to the economy which will see increased savings, to theinfrastructure sector which can look forward to long term funding being available. varietyis the spice of life, unless you are in insurance business. Traditionally, the most successfu


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insurance firms generally take on the least risk. However, factors such as deregulationglobalization, and the internet are shaking up the industry.

THE INSURANCE CAN BE CLASSIFIED INTO TWO1). 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 policywill 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 andcover 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


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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 benefitsand features that are right for us and our family .We might be able to buy the policy fromthe same agent or company or company representative who sells us property and liability.

Insurance for your home, automobile or business and although you wont qualifyfor any discount by buying your life insurance and other insurance from the samerepresentative, working with a single advisor for all your insurance needs can make youfinancial 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, youwill pay a commission, also called as load that is built into the premium rate.


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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. Secondeven if they were insured, they were treated as substandard lives and extra premium wascharged. Third, there were gross irregularities in the functioning of Life insurance wasnationalized in the year 1956, and then general insurance was nationalized in the year 1972In 1999, the private insurance companies were allowed back again into insurance sectowith maximum cap of 26 percent foreign holding.

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


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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 InsuranceCompany was started by Anita Bhavsar in Kolkata to cater to the needs of Europeancommunity. The pre-independent era in India saw discrimination among the life offoreigners and Indians with higher premiums being charged for the latter. In 1870, BombayMutual Life Assurance Society became the first Indian insurance company covering Indialives at normal rates.At the dawn of the twentieth century, many insurance companies were founded. In the yea1912, the Life Insurance Companies Act and the Provident Fund Act were passed toregulate the insurance business. The Life Insurance Companies Act, 1912 made itnecessary that the premium-rate tables and periodical valuations of companies should becertified by an actuary. However, the disparage still existed as discrimination betweenIndian 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. Beforthat, the industry consisted of only two state insurers: Life Insurers (Life InsuranceCorporation of India, LIC) and General Insurers (General Insurance Corporation of IndiaGIC). GIC had four subsidiary companies.With effect from December 2000, these subsidiaries have been de-linked from the parencompany and were set up as independent insurance companies: Oriental InsuranceCompany Limited, New India Assurance Company Limited, National Insurance Compan

Limited and United India Insurance Company Limited.Currently, in India only two million people (0.2 % of the total population of 1 billion) arecovered under Mediclaim, whereas in developed nations like USA about 75 % of the tota population is covered under some insurance scheme. With more and more privatecompanies in the sector, the situation may change soon.


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Acts

The insurance sector went through a full circle of phases from being unregulated tocompletely regulated and then currently being partly deregulated. It is governed by anumber 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 LifInsurance Corporation Act. All 245 insurance companies operating in the country weremerged into one entity, the Life Insurance Corporation of IndiaThe General Insurance Business Act of 1972 was enacted to nationalize the about 100

general insurance companies and subsequently merging them into four companies. All thcompanies were amalgamated into National Insurance, New India Assurance, OrientalInsurance and United India Insurance, which were headquartered in each of the fourmetropolitan cities.Until 1999, there were not any private insurance companies in India. The government theintroduced the Insurance Regulatory and Development Authority Act in 1999, thereby deregulating the insurance sector and allowing private companies. Furthermore, foreigninvestment was also allowed and capped at 26% holding in the Indian insurancecompanies.

The Insurance Regulatory and Development Authority (IRDA):

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill inParliament in December 1999. The IRDA since its incorporation as a statutory body inApril 2000 has fastidiously stuck to its schedule of framing regulations and registering th private sector insurance companies.


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The other decisions taken simultaneously to provide the supporting systems to theinsurance sector and in particular the life insurance companies were the launch of theIRDAs online service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that theinsurance companies would have a trained workforce of insurance agents in place to seltheir 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 oglobally compatible regulations. In the private sector 12 life insurance and 6 generalinsurance companies have been registered.

MISSION

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


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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 gothrough 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 compareto other developed nations can be judged by a comparison of per capita life premiumClearly, there is considerable scope to raise per capita life premium if the market iseffectively 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 sectorchannelises the savings of the people to long term investments. In India whereinfrastructure is said to be of critical importance, this sector will bring the nations ownmoney for the nation. This has made the sector the hottest one in India after IT. Withsocial security and security to the public at large being the agenda for opening the sector


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the role of the regulator becomes all the more serious and one that would be carefullywatched at every step. The Insurance Regulatory and Development bill is now an Act. With this India is now thecynosure of all the global insurance players. Numerous players, both Indian and foreignhave announced their intention to start their insurance shops in India. IRDA, under thechairmanship of Mr. Rangachary, opened the window for applying licenses in India. One othe main differences between the developed economies and the emerging economies is thainsurance products are bought in the former while these are sold in latter. Focus ofinsurance industry is changing towards providing a mix of both protection/risk over andlong-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


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Fiscal Reforms There is no denying that a thriving insurance industry is critical for every moderneconomy. 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 thaemerged in the License-Permit Raj though desirable and necessary would not alone promote growth unless accompanied by fiscal reforms and a thorough revamping of thfinancial sector. While in the early period of reforms the government removed many of thlicensing requirements thus giving freedom to the industry to decide on when, where andhow much to invest, a process of fiscal consolidation and reforms in the tax structure wainitiated 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 outsidecompetition for a long period had enough time and resources to withstand competitionfrom multinationals. The reforms in the financial sector are an integral part of the wholereforms process and unless there is major break through in this area, a sustained growth othe economy is not feasible.

Financial Sector Reforms The main engines of growth in any economy are (i) a thriving banking industry providingtimely and adequate credit (ii) a buoyant stock market where capital is easily accessed an(iii) a dynamic insurance industry that covers risks giving the entrepreneur the ability toexperiment 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 Bankto determine the interest rates based on the risk profile of the customer. The freeing of thinterest 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 systemacquired strength, vibrancy and efficiency and the Indian Banks are now able to effectivelcompete with their global counterparts. There has been a notable improvement in thefinancial health of the banks in terms of capital adequacy, profitability and asset quality. A


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regards stock market, the controller of capital issues was replaced by SEBI, an independenregulator and we have been witnessing for the last few years increased confidence in thmarket by the domestic as well as international investors. The flow of funds into the stockmarket is the greatest testimony to the confidence the individuals and corporate repose inthe Indian stock market.

Insurance Reforms

It may be recalled that while the reforms in various sectors of the economy were eitherwelcomed or considered essential to overcome a crisis, there was considerable debate othe need for reforms in insurance industry. There were many who maintained that sinceinsurance contracts between insurers and the insured involve special fiduciary obligationsit is better if those obligations are guaranteed by the State ownership of insurancecompanies. It was argued that insurance industry was nationalized on the grounds that (ithe State would be in a better position to apply the massive resources generated throughinsurance for nation building activities; (ii) the insurance companies were urban centric anthe vast majority of the population that live in the rural areas were denied the benefit oinsurance and the State would have the means and the motivation to reach out to thissection of the population and (iii) the governance standards in some of the companies wer

low and that there was a threat of insolvency. The votaries of status quo argued that theseconsiderations 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 inthe absence of competition in terms of wider choice and competitive pricing and that thereach 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 economiactivity 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 insurancindustry and that insurance penetration and enlargement of the market can be accomplisheonly when a large number of companies compete with each other. It was also realized tha


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the objectives of nationalization of the industry could largely be accomplished throughappropriate regulatory measures and a state monopoly was no longer necessary. The champions of change finally prevailed and the Insurance Regulatory and DevelopmenAuthority 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 upof the sector for private participation had at times thrown up serious concerns about theimplementation of insurance reforms in this country, once the legislation was put throughthe actual process of inducting private players into the market had gone off smoothly. I donot think there is any other sector in this country where the transition from state monopolto 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 interimRegulator through those turbulent 4 years (1996 to 1999) between the creation of the officand the passing of the IRDA Bill by the Parliament. This office was able to appreciate th

concerns of the Government, the Parliament and the private investors and harmonize thesvarious view points while framing the Regulations. They also had time to study the varioumodels obtaining in the world for regulation of the industry and identify what suited theneeds of our country.

Supervision and regulation of insurance is a relatively new experience in India. It is the joof the Regulator to ensure that the insurers have, at any point of time, sufficient resourcesto meet the liabilities and that all customers are treated in an equitable manner. When thestate enterprises controlled the entire industry, the safety of the policyholders funds wasensured through state guarantee while the fair dealings with the customers was achievedthrough parliamentary oversight of the state enterprises. The opening of the sector for private participation naturally raised issues about ensuring solvency of the companies an


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fair treatment to the insured. The Regulations framed by the Authority deal with both thissues in a comprehensive way. The former is addressed by stipulating a high level ofcapital requirement for entry into the field and rigorous enforcement of the solvencyrequirements, while the latter is covered by the regulations put in place for protection o policyholder interests. The Authority was keen that only companies with a sound financial background enterinsurance industry and, therefore, stipulated a high solvency margin in addition to highentry capital requirements. The high initial capital requirements and the 26% cap onForeign Direct Investment had, in no way, deterred the Indian enterprises and the majoforeign insurance companies from collaborating to form the Indian Insurance

companies. The industry has so far witnessed the entry of 15 new private companies in thlife segment and 8 in the non-life segment. In addition, two insurers have been grantedlicense to operate exclusively in the health sector. Of the private insurers who commenceoperations in the country other than one insurer each in life and non life segment, all otherhave set up businesses in collaboration with a foreign partner. In case of one life insurerwhere both the foreign and the Indian partner quit from the Indian insurance company inthe year 2005, the entire equity stake has been picked up by an Indian entity. Thus, as ondate, 21 insurance companies in the private sector are operating in the country incollaboration with established foreign insurance companies from across the globe.

The insurance sector was opened up for private participation on the ground that in spite oenormous contributions made by the public sector to expand the coverage and spreadawareness about insurance, the interests of the consumers would be better served if theris 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 ocompanies spreading their wings across the country and offering a variety of productscatering to the demands of different sections of the population. It was also felt thatcompetition would generate a healthy attitude towards redressal of consumer grievanceand improve the quality of service. We have now seven years of experience of public and


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

Growth of Premium

A remarkable feature of the post liberalization landscape is the unprecedented growth in th premium. The growth is significant in life insurance. The first year premium collected bthe insurers in the year 2006-07 was Rs.75,400 crs compared to Rs.6560 crs in the year1999-2000, the year prior to the opening up of the sector for private participation. Thirepresents a compound annual growth rate of nearly 42% and an average annual growthrate of 131%. If we take a corresponding period of 7 years prior to the liberation the firs

year premium increased from Rs.2375 crs in 1992-93 to Rs.6560 crs in 1999-2000, acompound Annual growth rate of 16%. A significant feature of this impressive growth inthe post reform period is the contribution made by the LIC to the growth. The compoundannual growth rate in the case of LIC was 36% in the post reform period while it was onl16% in the period prior to reforms. What has prompted the LIC to significantly increase it performance level? Obviously competition has spurred the organization to gear itself upand 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 companiehave managed to gain a market share of 26% by the year 2006-07. That they have beenable to make such a significant inroad into the market dominated by the LIC is a greattestimony to the leadership of the captains of private industry. The happy feature, howeveris that their market share had not been gained at the expense of LIC but has come out of thenlarged insurance market. The credit for the enlargement of the market should legitimatelygo to the private sector which had identified new markets that were hitherto unexplored b

the LIC. That the LIC had later followed the lead of the private sector speaks volumesabout the contribution made by the liberalization process to the enlargement of the market.

Insurance Penetration


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The opening of the sector has, as earlier pointed out, led to unprecedented increase incoverage, 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 penetratiowas 1.93% in 1999 it rose to 4.8% in the year 2006. It has thus more than doubled in 7years. While the increase is impressive in the case of life, where it increased from 1.39% t4.1%, it remained stagnant at nearly 0.6% in the case of non-life. The increased economiactivity coupled with recent reforms in general insurance market, would certainly helpexpand the market in the years to come.

Insurance Density

In the area of insurance density, significant contribution has been made by the privatesector. We had the problem of not only absence of risk protection through insurance bualso a considerable amount of under insurance. During the pre-liberalization era, thenationalized companies were unable to target niche markets and were content to sell a largnumber of low ticket items spread over the whole country. The private sector has, on thecontrary, started looking at the requirements of various segments of the population, andintroduced need based selling through excellent counseling. It is not uncommon to see th

CEOs of insurance companies personally making presentations to the heads of industriaand service sector companies and advising them on what products are best suited to theiemployees. The product development has also benefited through these interactions as thinsurance chiefs could profitably use their feedback to evolve new products. Through thi process they were able to minimize at least to some extent, the problem of underinsurance. We see a significant increase in the size of the policies. While the average sizeof the policy before opening up was around Rs.50,000/- it has now gone up to Rs.1 lakh ithe case of L.I.C. In the case of private insurers, the average size is Rs.2.50 lakhs. Theinsurance density which was $10 in the year 1999 has gone up to $33.2 in 2006.

Product Development


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The opening up has augured well for the consumer who has now access to a wide range onew 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 producfrom all sections. Availability of riders, particularly health riders, has been a positivedevelopment. In the non-life segment crop insurance based on rainfall and temperatureexperiments in health insurance, Directors and Officers liability covers have made theirentry and have come to stay. The removal of tariffs will give a further boost todevelopment of tailor made products in the years to come.

Agents Training

The expanding market demands a large agency force. The insurers have, therefore, beenrecruiting agency force on a continuous basis. Presently there are more than 20 lakhindividual agents and nearly 5000 Corporate Agents. In order to introduce an element o professionalism in the insurance intermediaries elaborate training and testing arrangementwere introduced by the Authority. The demand for tied agency force has led to a situationwhere the resources of the institutes providing training have been stretched. Theinspections by the Authority of these institutes have revealed a number of areas whereimprovements 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 thecourses conducted in a short span as a result of which many of the agents did not receiveadequate training. It was also noticed that the licensed training institutes allowedfranchisees to conduct training on their behalf which was irregular. The insurers, in theiranxiety to recruit agents, did not pay any attention to the type of training imparted. TheAuthority had, during 2004, streamlined the system of training and impressed upon theinsurers the need for greater attention being paid to the training of their agency force. Th

revised guidelines were issued after extensive consultations with the stakeholders and it ihoped that this effort would result in improving the quality of the agency force. TheAuthority 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 anadvise on the appropriate policy.


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It would not be out of place to mention here the importance of the field force beingadequately trained. Being the person on the spot as a representative of the insurer, it isessential that the agent recognizes and understands the need of the prospect. Havingidentified 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 theearliest opportunity to quit. The large attrition rate in the contracts bears silent testimony tthis fact. In this regard, another important factor that comes to my mind is the unhealthyand illegal practice of paying rebates to solicit business. Sec. 41 of the Insurance Act, 193strictly prohibits rebating for procuring business. Apart from the statutory imposition, the practice also is generally responsible for the poor retention ratios. Although the retentio

ratios of insurance companies have been progressively showing improvement, a great deaneeds to be done in this area. A well-trained agent, fulfilling his role as the primaryunderwriter, 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 theinsurance market. The institution of corporate agents was a new experiment started by th

Authority to facilitate sale of insurance policies through existing institutions which are incontact with a large section of the population in the discharge of their normal activitiesThe Corporate Agent model is expected to bring down costs of procurement of businessubstantially to the insurance company while benefiting the corporate with fee basedincome which improves its revenue stream. The insured himself, should feel comfortablwith this model as he would be dealing with an Institution that is familiar to him. In partsof Europe the Bancassurance model has worked well and the experience of the three partie

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 arrangementwith Banks so that they have access to their databank which is a valuable resource for theinsurer to build his customer base. I am confident that in the years to come Bancassurancwould be a critical intermediary in the spread of insurance in the country.


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Brokers

The introduction of brokers in the Indian insurance industry in the liberalized scenario isanother significant development. Brokers act as representatives of the policyholdersalthough they are paid by the insurers. As a result, they are expected to bring better servicto 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 inchoosing 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 foinsurance education, training and research. The Insurance Institute of Indias role appear

to have been confined to professional examinations conducted by it. The course is arecognized qualification for professional competence in the area of insurance. What wa perhaps ignored is the need to innovate by way of introduction of new subjects in tune witthe demand and expectations of an evolving market after a thorough review of the existincourse curriculum. Examples of such subjects include Health Insurance, Unit LinkedInsurance, Micro insurance, tapping of alternate channels of distribution, ALM (AssetLiability Management) related issues and re-visiting the insurance regulations in thecontext of the evolving economic environment. The market realities dictate that these areaare dealt with in greater detail. The various stakeholders need to be receptive to thechanging ground realities to be in a position to meet the challenges.


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Similarly research in insurance remains a neglected area and there is need for a concertedeffort to develop and define areas of focus for research in tune with the requirements of thindustry. Without a research focus no institute can expect to make tangible gains in the neafuture in terms of value addition and meeting the expectations of its members and theindustry at large. Experiences of the other economies and particularly the emergingeconomies are particularly relevant in this context.

Rural and Social Focus

During the debate on opening of the insurance sector, concern was expressed in somesections that the competition generated with the entry of private insurers would result in al

the insurers including the public sector insurers to chase the niche markets in the relativelwell off regions and their activities would, therefore, be mostly urban centric and theywould 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 companiewere being used as instruments of state for implementing welfare schemes benefiting thrural 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 theselosses. This situation would alter with entry of private players and removal of tariffs. Thecushion enjoyed by the PSUs would disappear and they have to compete with private sectofor business and they would then be unable to take on any additional load imposed by thegovernment by way of obligations to the poor. It was then argued by many academicianthat all business relating to rural areas and weaker sections need not be loss making and ainsurers should have the obligation to serve the rural areas and weaker sections. TheInsurance Act was, therefore, amended authorizing the Regulator to lay down certainobligations on the insurers towards rural areas and weaker sections.


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The Authority notified the regulations on obligations of insurers towards the rural andsocial 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 ruraand social sector obligations which are linked to the year of commencement of operationof the respective company.

Concerns and expectations

The Insurance industry has, in the last 7 years, grown enormously. Global players areinterested in the market and are anxious to come to India. There is a vast untapped potentiawith a major portion of the savings parked in Banking sector. Part of those savings caneasily migrate to insurance. While the Authority is happy about the positive developmentin 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 tcontinue to outsell their plain vanilla counterparts going ahead. So what is it that makesULIPs so attractive to the individual is, as follows

1. Insurace cover plus savings : ULIP serve the purpose of providing life insurancecombined with savings at market-linked returns. To that extent, ULIPs can be termed as atwo-in-one plan in terms of giving an individual the twin benefits of life insurance plussavings. This is unlike comparable instruments like a mutual fund for instance, which doenot offer a life cover.

2. Multiple investment options : ULIP offer a lot more variety than traditional lifeinsurance plans. So there are multiple options at the individual's disposal. . ULIPs generallcome in three broad variants:

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


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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/equityallocations may vary across insurance companies. Individuals can opt for a variant basedon their risk profile. For example, a 30-Yr old individual looking at buying a life insuranc plan that also helps him build a corpus for retirement can consider investing in theBalanced or even the Aggressive ULIP. Likewise, a risk-averse individual who is notcomfortable 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 ULIPsafford the individual. Individuals can switch between the ULIP variants outlined above tocapitalize on investment opportunities across the equity and debt markets. Some insuranccompanies allow a certain number of `free' switches. This is an important feature thaallows the informed individual/investor to benefit from the vagaries of stock/debt marketsFor instance, when stock markets were on the brink of 7,000 points (Sensex), the informeinvestor could have shifted his assets from an Aggressive ULIP to a low-risk Conservativ

ULIP.

Switching also helps individuals on another front. They can shift from an Aggressive to Balanced or a Conservative ULIP as they approach retirement. This is a reflection of thechange in their risk appetite, as they grow older.

4. Works like an SIP : Rupee cost-averaging is another important benefit associated withULIPs. 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 facteven the annual premium in a ULIP works on the rupee cost-averaging principle. An adde benefit with ULIPs is that individuals can also invest a one-time amount in the ULIP eitheto benefit from opportunities in the stock markets or if they have an investible surplus in particular year that they wish to put aside for the future.


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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


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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 childFlexibility 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

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


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education expenses

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 ventureBetweenICICI Bank Limited andPrudential plc of UK was incorporated on July20, 2000 as a company under the Companies Act, 1956 (the Act). The Company


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is licensed by the Insurance Regulatory and Development Authority (IRDA) for carryinlife insurance business in India.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premiefinancial powerhouse and Prudential plc, a leading international financial services groupheadquartered in the United Kingdom (UK). The company brings together the local markeexpertise and financial strength of ICICI Bank and Prudentials International life insurancexperience. 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. ICICPrudential was amongst the first private sector insurance companies to begin operations iDecember 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 issue100,000 policies translating into premium income of approximately Rs. 1,200 million on sum assured of over Rs.23 billion. When the company began its operations, the need was t build a brand that was relatable to, symbolized trust and was easily recognized andunderstood. It launched a corporate campaign ICICI Prudential also made using the themof Sindoor to epitomize protection, trust, togetherness and all that is Indian; endearingitself to the masses. The success of the campaign, the calling card of the company saw th 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 companywill 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 wouldfurther its goal. Apart from ramping up thoroughly training its advisors, the company ha


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twelve Bancassurance partners the largest in the country. It swiftly revised and added tits initial range of products, pioneering market-linked products and pension plans, to offecustomers the most flexible life insurance policies in the country. In February 2004, ICICPrudential increased its capital base by Rs. 500 million, its ninth capital hike, bringing thetotal paid up equity capital to Rs. 6,750 million. With the authorized capital of thecompany standing at Rs. 12 billion, ICICI Prudential continues to have the highest capita base amongst all life insurers in the country. The challenge ICICI Prudential now faces ito retain its top-notch position and continue to deliver the finest life insurance and pensiosolutions to its ever-growing customer base.

ICICI Prudentials 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 companygarnered Rs.2, 412 crore of weighted new business premium and wrote 837,963 policiesThe sum assured in force stands at Rs.45, 888 crore. The company has a network of ove72,000 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 InsureFinancial Strength rating of AAA (Ind) from Fitch ratings. The AAA rating is the highescredit rating, and is a clear assurance of ICICI Prudentials ability to meet its obligations tocustomers at the time of maturity or claims. For the past five years, ICICI Prudential haretained its position as the No.1 private insurer in the country, with a wide range of flexibl products that meet the needs of the Indian customer at every step in life. Beginning operations in December 2000, ICICI Prudentials success has been meteoric becoming the number one private life insurer within months of launch. Today, it has one othe largest distribution networks amongst private life insurers in India, with branches in 5cities. The total number of policies issued stands at more than 780,000 with a total sumassured in excess of Rs.160 billion.


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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, drivenmainly by the companys range of unique unit-linked policies and pension plans. Thecompanys retail market share amongst private companies stood at 36%, making it clealeader in the segment. To add to its achievements, in the year 2003/04 it was adjudgedMost 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 awarfor the second year running. The company is also proud to have won Silver at EFFIES2003 for its Retire from work, not life campaign. Notably, ICICI Prudential was alsoshort-listed to the final round for its Sindoor campaign in EFFIES 2002.

ICICI Prudentials success is rooted in its philosophy to always offer the customer achoice. This has been the driving force behind its multi-channel distribution strategy, whicincludes advisors, banks, direct marketing and corporate agents. In fact, ICICI Prudentiawas the first life insurer to invest in multiple channels and offer the customer choice andaccess; thus reducing dependency on any one channel, great strides in the retirementsolutions and pensions market.

The Companys penetration of the retirement market was driven by the focused approachtowards creating awareness through sustained campaign; Retire from work, not lifeWithin six months, the campaign rewarded ICICI Prudential with an increased share o23% 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 memberwill deliver their best without any inhibition, threat or fear. The Company will not tolerateverbal or physical conduct by any staff member that harasses, disrupts, or interferes withanothers work performance or that which creates an intimidating, offensive, or hostileenvironment.


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The Company will actively communicate its policy on WorkplaceHarassment to all staff members to spread awareness and thereby, attempt to preventincidence of such harassment. In the unlikely event of such an occurrence, the Companywill initiate prompt and strong disciplinary action in line with the stated Policy.

ABOUT THE PROMOTERS :

A) ICICI BANK

ICICI Bank is Indias second largest bank with total assets of about Rs 112,024 croreand a network of about 450 branches and offices and about 1750ATMs. It offers a widerange of banking products and financial services to corporate and retail customers througa variety of delivery channels and through its specialized subsidiaries and affiliates in theareas of investments banking, life and nonlife insurance, venture capital, assetmanagement and information technology. ICICI bank posted a net profit of Rs1,637 crorfor the year ended March 31,2004 .ICICI Banks equity shares are listed in India on stockexchanges at Chennai, Delhi, Kolkata and vadodare, the stock Exchange, Mumbai and th National Stock Exchange of India limited and its American Depositary Receipts(ADRs) arlisted on the New York Stock Exchange(NYSE).

B) PRUDENTIAL

Established in London in 1848, Prudential plc, through its businesses in the UK andEurope, 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 302004, 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 lifassurance, pensions, mutual funds, banking, investment management and general


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insurance, In Asia, prudential is the leading European life insurance company with a vasnetwork of 24 life and mutual fund operations in twelve countries-China, Hong KongIndia, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand andVietnam.

HISTORY AND GROWTH

DISTRIBUTION

ICICI Prudential has one of the largest distribution networks amongst private lifeinsures in India, having commenced operations in 69 cities and towns in India. That are

Agra, Ahmedabad, Ajmer, Allahabad, Amristar, Aurangabad, Bangalore, Barely, BhatindaBhopal, Bhubhaneshwar, Calicut, Chandigarh, Chennai, Coimbatore, Dehradun, DurgapurFaridabad, Goa, Guntur, Gurgaon, Guwahati, Gwalior, Hyderabad, Hubli, Indore, JaipurJalandhar, Kota,cochin Kottayam, Lucknow, Ludhiana, Madurai, Mangalore, MeerutMumbai, 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 BankSouth Indian Bank, Bank of India, Lord Krishna Bank and some co-operative Banks, awell as 160 corporate agents and brokers. It has also tied up with organizations like Dhanfor distribution of Salaam Zindagi, a policy for the socially and economicallyunderprivileged sections of society.

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

and advice customers. Further, It leverages its stateof-theart IT infrastructure to providsuperior quality of service to customers.

The insurance sector was monopoly of L.I.C. for the past 4 decades. So liberalization haassured a new era of competition in this sector. Liberalization will bring about strong


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marketing of policies by rival firms, which is expected to benefit the customers through 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 thinsurance company to market their products rightly and make people aware of it. Very soonthe market will be flooded with large number of products by a large number of insurersoperating in the Indian market. The potential for growth in the Indian market can be gauge by the fact that the Indian Insurance Market registered the highest growth in the Asianregion even though Indias share of global insurance market is less than 0.5% (1998). Th 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. ThConfederation of Indian Industry (CII) has projected a growth of Life Insurance premiumfrom Rs.350 Billion to Rs.1400 billion by 2009. The existing level of awareness ofconsumers 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 consumerare ignorant about the various products of insurance. Hence it is necessary that all theinsurance 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 service

group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after Receivinapproval from IRDA.ICICI Prudentials equity base stands at Rs.8.25 billion with ICICBank and Prudential holding 74% and 26% stake respectively. In the half year endedSeptember 30, 2004 the company garnered Rs 498 Crore of new business premium for


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total sum assured of over Rs 23,000 Crore and had over 1 million policies. The companyhas a network of over 40,000 advisors; as well as 7 banc assurance tie-ups. Today, ICICIPrudential has emerged as the No. 1 private life insurer in the country, with a wide range oflexible 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 withand advise customers and has the highest number amongst private life insurers on theRenowned Million Dollar Round Table (MDRT). Further, it leverages its state-of-the-artIT infrastructure to provide superior quality of service to customers.

Consumer Education

ICICI Prudential has taken the lead in educating the market including seminars onfinancial planning and retirement planningRural awareness: Gram Sabhas, e-Choupals, Project Shakti, Speaking regional languagesFINSITE - nearly 2000 people have enrolled in the program Newsletters - claims, fundsand group.

ICICI Prudential covers all types of consumers across their life stages, thus ensuringcover for their entire associated goal based savings

Transparency

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

Disclosure of portfolio in the quarterly newsletter

Unit statement Daily NAV

Customer Centric


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ICICI Prudential was the first company in the insurance space to decrease commissionsin a bid to increase overall customer value.Senior management team visits customers to get their feedback on their policy andservice 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 beenundertaken 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 nowRating of Premiums Counteroffer acceptances up from 15% (Oct 2002) to 60%(current)

ABOUT ICICI PRUDENTIAL


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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, ChairpersonMr.N.S.Kannan, Director Mr.K.Ramkumar, Director

Mr.Barry.Stowe, Director Mr.Adrian.OConnor, Director Mr.Keki.Dadiseth, Independent Director Prof.Marti.G.Subrahmanyam, Independent Director Ms.Rama.Bijapurkar, Independent Director Mr.Vinod.Kumar.Dhall, Independent Director Mr. V. Vaidyanathan, Managing Director & CEO

Management Team


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The ICICI Prudential Life Insurance Company Limited Management team comprisesreputed people from the finance industry both from India and abroad.

Mr.V.Vaidyanathan ,ManagingDirector&CEOMs.AnitaPai , ExecutiveVice President - Customer Service, Technology & MarketingDr.Avijit.Chatterjee ,Appointed.ActuaryMr. 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.

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:


40
http://www.iciciprulife.com/public/About-us/ProfileTeam-Vaidyanathan.htmhttp://www.iciciprulife.com/public/About-us/ProfileTeam-AnitaPai.htmhttp://www.iciciprulife.com/public/About-us/ProfileTeam-Dr.%20Avijit%20Chatterjee.htmhttp://www.iciciprulife.com/public/About-us/ProfileTeam-PuneetNanda.htmhttp://www.iciciprulife.com/public/About-us/ProfileTeam-Vaidyanathan.htmhttp://www.iciciprulife.com/public/About-us/ProfileTeam-AnitaPai.htmhttp://www.iciciprulife.com/public/About-us/ProfileTeam-Dr.%20Avijit%20Chatterjee.htmhttp://www.iciciprulife.com/public/About-us/ProfileTeam-PuneetNanda.htm


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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 corevalues -- 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 to5

Customer First

Bounder less

Ownership

Passion


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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


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ICICI Prudential was voted the No.1 Company in a list of Chinas top five insurancecompanies with the greatest potential for growth and development at the 2004 WorldFinancial Laboratory Annual Awards.

ICICI Prudential Life was named Best Life Insurer at the Outlook Money Awards 20032004. This was the second consecutive year that ICICI Pru won this award. PrudentialICICI Asset Management and ICICI Prudential Life are among the top 50 most trustedservices 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 Prizin 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 mos

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) Awarfor the successful launch of their PCA Platinum Annuity.

PCA Life (Taiwan) was named as one of the five most reputable life insurance companiein Taiwan for 2003 by Commonwealth magazine.

At the Investment Fund Awards 2003, the Prudential Singapore PRUlink SingaporeManaged Fund won the 10-year Special Award for the highest absolute return over 10years in the Singapore authorized Investment-Linked Products category.

PCA Securities Investment Trusts Hi-Tech Fund was recognized by Standard & PoorsTaiwan Investment Funds Awards 2003 as the Best Performing Fund in the Three-yearTaiwan TMT (Technology Media Telecommunication) category.


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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. Ltdk) 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


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Actuary

Actuary is a group of mathematician who making insurance product, and these are the people analyses customers requirement and also follows Government policies andregulation etc. They are well aware about what customers looking for They are creatininitial insurance product.

Under writers

After making initial insurance product actuaries forward this initial product to underwriters, these people are the real risk-taking people who make initial insurance product intfinal product. After under writing final insurance product move to marketing developers.

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

distribution and promotion activities. Then the product will move to sales people whodirectly contact with customers.

Sales people

Sales people are the people directly contact with customers. Its ability of sales peopleto give clear idea regarding the new product to the customers. Insurance company contacwith customers through sales persons.

Work flow structure:


ACTURY

FORMPOLICIESGOVERNMENTUDER

WRITERSUNDER WRITERSMARKETDEVELOPERS

ADVERTISEMENTAGENCIES

SALES PEOPLECUSTOMERS

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PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS:


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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 enhance

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 protectionalong with adequate returns.

Cash Back is an anticipated endowment policy ideal for meeting milestone

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

purchase of an asset.

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.


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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 childs 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.


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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


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

benefits to their employees.

ICICI Pru Group Gratuity Plan : ICICI Prus 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 optionsor opting for a partial commutation of the annuity at the time of retirement.

ICICI Pru Group Term Plan : ICICI Prus 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 dea