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Project Report

Title

STUDY THE FEASIBILITY OF ULIP PLANS

Submitted to: Submitted by:

Prof. Mona Sahay Neera Ahuja

PGDM 2006-08

Institute of Technology and Science

Ghaziabad

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Acknowledgement

I owe my sincere & heartiest gratitude to Mr.Kapil Bhateja (FSC, ICICI Prudential Life

Insurance Company, Mr.Deep Sharma RSM) who gave me the opportunity to work in

ICICI Prudential Life Insurance Company as a summer trainee & helped with whenever I

needed him.

The entire project from the very idea of it to reality would not have been possible without

the guidance and support of many people.I would therefore like to take the golden

opportunity of expressing my sincere and profound gratitude to all those people who

helped me throughout the project .

Finally, I would like to extend my sincere thanks to the employees of ICICI prudential

Kanpur during the training period for their kind cooperation.

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CONTENTS

Introduction1. History Of insurance2. Liberalization of the Insurance Sector

Industry Overview1. What is Insurance?2. Reason for Insurance3. Importance for Insurance4. Advantages of Life Insurance

Overview of Indian Insurance MarketCompany Profile

1. ICICI Prudential Life Insurance Pvt. Ltd.2. Sponsors3. Prudential Plc.4. Bank Assurance 5. Technology6. Aim of the company

Problem of Study for Comparative AnalysisResearch Methodology & LimitationsInsurance ProductsProduct PlanQuestionnaireChart FindingsRegulations- The Agency LawsInsurance Regulatory & Development AuthorityResearch Objective, Methodology & FindingsSWOT Market Share Chart & GraphRecommendationsConclusion Bibliography

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Executive Summary

The beginning of the project starts with: -

Chapter# 1 tells about the history of insurance, what is insurance, what are the reasons

because of which a person should opt for insurance & the importance of insurance in

human life. Insurance does not only provide life coverage but also other benefits like tax

relief, payment on maturity which can be further be utilized either for the education of

children, insurer’s old age or even for paying off debts.

It also discusses the post-liberalization era & the opportunities & threats before the

insurance sector. The problem of the study as to why it ahs been taken up by the

researcher & the objective of the research have been discussed.

Chapter# 2 deals with the research methodology followed by the researcher during the

project. It tells about the locale of the study & the sample size taken. It also mentions the

sources of data collection

Chapter# 3 deals with analysis of the survey.

Chapter# 4 mentions the conclusion of the project & recommendation thereafter.

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Introduction

History of Insurance

Historians believe that insurance first developed in Sumer & Babylonia. The merchants

& traders of these societies transferred & pooled their money to protect themselves from

pirates.

In the 18th century BC, Babylonian king, Hammurabi developed a code of law known as

the code of specific rules governing the practices of early risk-sharing activities.

Insurance developed during the 1700’s in the North American colonies. In 1730,

Benjamin Frank contributed for the Insurance of Houses from Loss by Fire. The company

collected contributions & this money went into an investment fund. Interest on this fund

went towards paying claims dividends to those who contributed money.

The Industrial Revolution in the US, in the early & mid 1800’s prompted dramatic group.

During this time, many companies were establishes to sell life insurance policies &

annuities. Several shared profits among policy holders, also developed. In addition, some

life insurance companies charged premiums according to age of people & health.

Life insurance, in its present form, came to India from the United Kingdom with the

establishment of a British firm, Oriental Life Insurance Company in Calcutta in 1818,

followed by Bombay Life Insurance Assurance Company in 1823, the Madras Equitable

Life Insurance Society in 1829, & the Oriental Government Security Life Assurance

Company in 1874. Prior to 1871, Indian lives were treated as sub-standard & charged

extra premium of 15% to 20%. Bombay Mutual Life Assurance Society, an Indian

insurer which came into existence in 1871, was the first to cover Indian lives at normal

rates.

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The Indian Life Assurance Companies Act, 1912 was the first statutory measure to

regulate life insurance business. Later in 1928, the Indian Insurance Companies Act was

enacted, to enable the govt. to collect statistical information about both life & non-life

insurance business transacted in India by Indian & foreign insurers, including the

provident insurance society. Comprehensive arrangements were, however, brought into

effect with the enactment of the Insurance Act, 1938. Efforts in this direction continued

progressively & the Act was amended in1950, making far reaching changes, such as

requirement of equity capital for companies carrying on life insurance business, stricter

controls on investment of life insurance companies, ceiling on the expenses of

management & agency commission etc.

By 1956, 154 insurers, 16 non-Indian insurers & 75 provident societies were carrying on

life insurance business in India. On 19th January 1956, the management of the entire life

insurance business of 229 Indian insurers & provident insurance societies & the Indian

life insurance business of 16 non-Indian life insurance companies then operating in India,

was taken over by the central govt. & then nationalized on 1st September 1956 when Life

Insurance Corporation came into existence.

An ordinance was passed in 1968 to amend the Insurance Act to regulate/control non-life

insurance resulting in set up of GIC in 1973. Malhotra committee submitted its report in

1994 & recommended means to reintroduce an element of competition by withdrawing

the exclusivity of LIC & GIC. In 1997, Insurance Regulatory Authority (IRA) was

established which was later re-styled as IRDA in 1999.

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Liberalization of the Insurance Sector

Liberalization commitments of the country to help in disciplining future economic

policies will include the insurance reforms. When the world over, insurance, markets

have been opened up, India cannot remain in isolation. Globalization is the new

economic reality, which is here to stay, heralding a new era of insurance in India. With

the opening of the insurance industry, India stands to gain the following major

advantages:

1. Globalization will provide improved opportunities to the customers for better

products, with more reasonable & affordable pricing.

2. The customer will get quicker servicing.

3. It will enhance the savings rate.

4. Long term funds for infrastructure development will be available to the country.

5. It will secure for India larger inflows of foreign capital needed to sustain our GDP

growth.

What is Insurance?

Insurance is a legal contract that protects people from the financial costs those results

from loss of life, loss of health, lawsuits, or property damage. Insurance provides a means

for individuals & society to cope up with some of the risks faced in every day life by

every body. People purchase contracts of insurance, called a Policy, from various

insurance companies.

Almost every person existing in this world is associated with insurance, directly or

indirectly. Directly, in the sense that he/she has insured his/her life by some kind of

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insurance policy from any company. Indirectly, in the sense they must have insured the

assets of their own for example their house, car, or any thing else.

Insurance can be divided into three categories.

1. Life Insurance

2. General Insurance

3. Health Insurance.

Life insurance is a contract for payment of a sum of money to the person assured (or

failing him/her, to the person entitled to receive the same) on the happening of the event

insured against. Usually the contract provides for the payment of an amount on the date

of maturity or at specified intervals or at unfortunate death. The contract also provides for

payment of premium periodically to the corporation by the assured.

General insurance includes many areas of insurance like marine, motor, engineering,

health, fire, etc. The contract provides for the payment of an amount on the happening of

some contingency. These types of contracts are annual in nature.

Reason for insurance

In life, losses are sometimes unavoidable. People may fall seriously sick or lose income

or savings to pay off medical bills. Individuals or their relatives may come across

untimely death, whatsoever the reason may be. The assets of people may get damaged

due to some heavenly act or by some nuisance creator.

No one knows in advance when a loss will occur or how serious that loss will be. The

uncertainty surrounding potential losses is known as Risk. Insurance offers a way for

people to replace risk with known costs- the costs of buying & maintaining insurance

policies.

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Insurance pools risks shared by many people, thereby, reducing the risks faced by a

group. People pay to buy insurance coverage (protection from risk). In exchange, all

policy holders (people who own insurance policies) receive a promise that the group of

policy holders as represented by the insurance organization will pay when any policy

holder experience any kind of loss.

Importance of Insurance

Insurance benefits society by allowing individuals to share the risks faced by many

people. But it also serves many other important economic & societal functions. Insurance

provides the capital that communities need to quickly rebuild & recover economically

from natural disasters. Insurance itself has become a significant economic force in most

of the industrialized countries. Businessmen buy insurance to cover their employees

against work related injuries & health problems. They also insure their assets against any

kind of wear n tear by natural forces & forcibly.

Insurance companies perform a type of monetary redistribution- they collect premiums &

eventually redistribute that money as payments. Depending on the type of insurance,

redistribution can take place anywhere from a month to many decades. Because of this

delay between collecting & paying out funds, insurance companies invest their funds to

bring extra revenue. Such investments help business & government finance their

operations, & few profits from these investments support the operations of insurance

companies. With these investment earnings, insurance companies can keep rates much

lower than would otherwise be possible.

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Advantages of Life Insurance

1. It is superior to an ordinary saving plan: Unlike other saving plans, it affords

full protection against risk of death. In case of death, the full sum assured is made

available under a life assurance policy; whereas under saving scheme the total

accumulated saving alone will be available. The later will be considerably less

than the sum assured, if death occurs during early years.

2. Easy settlement & protection against creditors: The life assured can name

person(s) called Nominee to whom the policy money would be payable in the event

of his death. The proceeds of a life policy can be protected against the claim of the

creditors of the life assured by effecting a valid assignment of the policy.

3. Ready marketability & suitability for quick borrowing: After an initial period,

if the policy holder finds him unable to continue payment of premiums, he can

surrender the policy for a cash sum. Alternatively, ha can tide over a temporary

difficulty by taking loan on the sole security of the policy without delay. Further, a

life insurance policy is sometimes acceptable as security for a commercial loan.

4. Tax Relief: The Indian Income-Tax Act allows deduction of certain portion of the

taxable income which is diverted to payment of life insurance premiums from the

total income tax liability. When this tax relief is taken into account, it will be found

that the assured is in effect paying a lower premium for his insurance.

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OVERVIEW OF THE INDIAN INSURANCE MARKET

The insurance landscape in India is undergoing a tectonic shift. Despite its more than

teeming one billion populations, India still has a low insurance penetration of 1.95

percent, 51st in the world. Although India boasts a saving rate of around 25 percent, less

than 5 percent is spent on insurance.

With the entry of competition, the rules of the game have begun to change. The market is

already beginning to witness a wide array of products from players whose number is set

to grow. In such a scenario, the differentiators among the different players s products,

pricing & service. What really increases the appeal of insurance is the benefit of

protection of lives & assets from insurance products.

Only 22% of the insurable population possesses life insurance. What’s more, in a

country over billion people, life insurance premium forms only 1.8% of GDP indicate the

extent of underinsurance. Recognizing the huge potential of the market & the need to

make insurance, particularly the life insurance, available on a wider scale, the

government opened the industry to private players in 1999 and was flooded with

applications. Major international insures- Prudential & Standard life of UK, Sun Life of

UK, Sun life of Canada & AIG, MetLife & New York Life of the US, to name a few-tied

up with leading companies of India to reach out this vast market.

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Today, the Indian Insurance industry has a dozen of private players, each of which are

making strides in raising awareness level, introducing innovative products & increasing

the penetration of life insurance in the vastly underinsured country. The success of effort

is noteworthy –private insurers captured nearly 9 percent of new business premium

income in two years of operations.

The biggest beneficiary of the competition amongst the life insurers is the consumer. A

wide range of products, customer focused service & professional advice has become the

mainstay in the industry. It is seen a dramatic increase in customer awareness, with

penetration cutting across the socio-economic class & attracting people who have never

purchased insurance before. With the heightened awareness comes a willingness to

evaluate life insurance as an integral part of financial planning kit a significant change n

earlier attitude, where insurance is purchased as a tax saving pool.

Not only has there been shift in the perception of life insurance, but also the way its sold.

From being a purely advisors driven business, the sector has seen the emergence of a

number of channels, including bank assurance, corporate agents & direct marketing.

These channels though very new, are quickly gaining importance because they present

customers multiple ways of approaching life insurers.

There is also a huge improvement in service attitude & delivery making a customer a

focus of each initiative. Technology has come to aid giving the platform, the reach & the

ability to service each customer seamlessly. Multiple touch points have emerged –

contact centers, email, facsimile, websites, snail-mails etc.

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Company Profile

ICICI Prudential Life Insurance Company Limited

ICICI Prudential Life Insurance Company Limited was incorporated on July 20, 2000.

The authorized capital of the company is Rs.2300 Million and the paid up capital is Rs.

1500 Million. The Company is a joint venture of ICICI (74%) and Prudential plc UK

(26%).

The Company was granted Certificate of Registration for carrying out Life Insurance

business, by the Insurance Regulatory and Development Authority on November 24,

2000. It commenced commercial operations on December 19, 2000, becoming one of the

first few private sector players to enter the liberalized arena.

The Company is now operational in Agra, Ahmedabad, Ajmer, Allahabad, Amritsar,

Aurangabad, Bangalore, Bhatinda, Bhopal, Bhubaneswar, Chandigarh, Chennai,

Coimbatore, Dehradun, Goa, Guntur, Gurgaon,Greater Noida, Hyderabad, Hubli, Indore,

Jaipur, Jalandhar, Jamnagar, Jamshedpur, Jodhpur, Kanpur, Karnal, Kochi, Kolakata,

Kota, Kottayam, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpur,

Nasik, Noida, New Delhi, Patiala, Pune, Rajkot, Ranchi, Surat, Thane, Thrissur, Trichy,

Trivandrum, Vadodara, Vashi, Vijaywada.

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Till March 31,2002 the Company has issued 100,000 polices translating into a Premium

Income of around Rs. 1,200 Million and a sum assured of over Rs.15,000 Million.

The Company recognizes that the driving force for gaining sustainable competitive

advantage in this business is superior customer experience and investment behind the

brand. The Company aims to achieve this by striving to provide world-class service

levels through constant innovation in products, distribution channels and technology-

based delivery. The Company has already taken significant steps to achieve this goal.

Sponsors

ICICI Ltd was established in 1955 by the World Bank, the Government of India and the

Indian Industry, to promote industrial development of India by providing project and

corporate finance to Indian industry.

Since inception, ICICI has grown from a development bank to a financial conglomerate

and has become one of the largest public financial institutions in India. ICICI has

financed all major sectors of the economy, covering 6,848 companies and 16,851

projects. In the fiscal year 2000-2001, ICICI had disbursed a total of Rs 319.65 billion.

ICICI has now developed a whole range of activities to become a Universal Bank. Some

of ICICI spectrum of activities includes:

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Commercial Banking - ICICI Bank, India's first internet bank.

Information Technology - ICICI InfoTech, transaction processing, software

development

Investment Banking - ICICI Securities, one of the key players in the Indian

Capital Markets

Mutual Fund - Prudential ICICI AMC, leading private sector mutual fund player

in India

Venture Capital - ICICI Venture, leading private equity investor with focus on IT

and HealthCare

Retail Services - ICICI PFS, Marketing and Distribution of Retail Asset Products

Distribution - ICICI Capital, Distribution and Servicing of Retail Liability

Products

ICICI is listed on the Indian Stock Exchanges and on the New York Stock Exchange

(NYSE). On September 22, 1999, it became the first Indian company to be listed on

the NYSE (symbol: IC and IC.D). The listing of ICICI BANK has followed this on

NYSE (symbol: IBN) on March 28, 2000.

Prudential Plc:

Prudential Plc was founded in 1848. Since then it has grown to become one of the largest

providers of a wide range of savings products for the individual including life insurance,

pensions, annuities, unit trusts and personal banking. It has a presence in over 15

countries, and caters to the financial needs of over 10 million customers.

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It manages assets of over US$ 259 billion (Rupees 11, 39,600 crore approx.) as of

December 31, 1999. Prudential plc has had its presence in Asia for the past 75 years

catering to over 1 million customers across 11 Asian countries. Prudential is the largest

life insurance company in the United Kingdom. Asia has always been an important

region for Prudential and it has had a presence in Asia for over 75 years. In fact

Prudential's first overseas operation was in India, way back in 1923 to establish Life and

General Branch agencies.

In the US, Prudential owns Jackson National Life, one of the leading life insurance

companies. Prudential controls approximately 4% of all the listed shares on the second

largest stock exchange in the world, the London Stock Exchange, making it one of the

largest institutional investors in the UK. Prudential is focused on the Internet generation

and is one of the first financial service organizations to use the Internet on a fully

integrated basis.

In October 1998, Prudential launched a "branchless" bank based on the internet.

Unusually titled as " egg:|". The bank has in a short span of its existence become a

leading banking service provider in the UK. Infect in the first six months of its existence

it garnered over 5 billion (US$ 8 billion) in deposits from over 500,000 customers.

Development of superior products and services that offer value for money and security

while producing superior financial returns enables Prudential to maximize the value of its

shareholder's investment and to establish lasting relationships with customers and policy

holders.

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ICICI and Prudential came together in 1993 to provide mutual fund products in India and

today are the largest private sector mutual fund company in India. The two companies

bring together two of the strongest financial service brands in Asia known for their

professionalism, excellent quality of service and long term commitment.

Bank Assurance

The company has twelve bank assurance tie-ups, having agreements with ICICI Bank,

Allahabad Bank, Federal Bank, South Indian Bank, Bank Of India, Lord Krishna Bank,

& Punjab & Maharashtra Co-Operative Bank, Goa State Co-Operative Bank, Indoor

Paraspar Sahakari Bank, Manipal State Co-Operative Bank, Shamrao Vithal Co-

Operative Bank & Jalgaon People’s Co-Operative Bank as well as some corporate agents.

It has also tied up with organizations like Dhan for distribution of Salaam Zindagi, a

policy for the socially & economically underprivileged sections of society.

Technology

The company continuously leverages on the state of art technology that it posses. The

modern & updated technology infrastructure helps not only to provide superior quality of

products & services to the customers but at the same time helps in creating a prudent

reward & recognition program for the company itself. The company can leverage on this

advantage to drive out one of the best CRM industry at the present. The parent company

also is in a move to duplicate the ICICI model in other world market. It is nothing but a

result of the superb all-round performance that the company has shown in all the facets of

business & over the period of time. But one important has been the continued focus on

growth & the strife for results from the workforce itself.

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Aim of the Company

Their vision is to make ICICI Prudential Life Insurance Company the dominant new

insurer in the life insurance industry. This they hope to achieve through their

commitment to excellence, focus on service, speed and innovation, and leveraging our

technological expertise.

The success of the organization will be founded on its strong focus on values and clarity

of purpose. These include:

Understanding the needs of customers and offering them superior products and

service

Leveraging technology to serve customers quickly, efficiently, & conveniently.

Developing & implementing superior risk management & investment strategies to

offer sustainable & stable returns to the policy holders.

Building long lasting relationships with their partners

Providing an enabling environment to foster growth and learning for their

employees

They believe that they can play a significant role in redefining and reshaping the sector.

Given the quality of their parentage and the commitment of their team, they feel that

there will be no limits to their growth. The success of the company lies in its unflinching

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commitment to five core values: - Integrity, Customers first, Boundary less,

Ownership, & Passion.

Problem of Study

Since privatization of insurance sector in India is a new concept for insurance market

in India hence people are not much aware of the products being offered by these new

private players. Moreover, after studying the insurance scenario in India & keeping

the needs of the customers in mind the companies are introducing new products. The

customers is finding difficulty in comparing these products & choosing the right one

for himself since each product is unique in itself but the deciding factor is still the

monetary investment.

Based on current market trends the researcher finds that not much has been done in

this regard so I have decided to analyze the various products being offered by the

insurance companies. And the general public’s perceptions & knowledge about these

insurance companies.

Objectives of the Study

Based on the problem of the study the following objectives have been outlined:

1. To find out the various life insurance products being offered by ICICI

prudential.

2. To find out the annual premium collected under each plan.

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3. To find out the most profit making products under each plan.

4. General Perception of the insurance companies.

Research Methodology

This chapter deals with the research methodology adopted by the researcher. The

researcher has conducted the study using both the primary & secondary data.

The researcher started the research work with the help of secondary data from various

books & magazines. When the researcher collected a fair amount of idea about the type

of study that has been conducted & how he should go with it. Then he moved on to the

primary sources of data collection.

The main source here were the interviews scheduled comprising of structured & semi-

structured questions. When the interview schedule was administered some unstructured

questions were asked & noted down.

The researcher went in for purposive & convenient sampling. The universe of the study is

India & the locale of the study being Delhi. The sample size was chosen on the basis of

insurance companies operating in Delhi.

Limitation

1. Time constraint

2. Knowledge constraint

3. Reluctance of respondents to provide information

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Research methodology

Sample frame

The area for the study was preferably Kanpur .

The respondents were mostly in the age group of 25-60 years, as these were

the people who are the target for the company’s products as well as company’s

aim of increasing & developing its channel network.

The respondents were from all walks of life that included services, business &

even housewives. The respondents were like MBA’s, businessmen, self-

employed, CA’s, Advocates & other professionals.

The sample size was very much limited to the area of study. About 300 people

were contacted & roughly 50 were present for one to one interaction.

Methodology Adopted

As for the prospecting of the respondents is concerned, random sampling from the

existing database & telecalling was used extensively.

Next step involved was of suspecting which was initiated by getting the

appointments & having a personal interaction.

The sales pitch was provided with the help of business opportunity presentation &

also with the discussion & interviews conducted

The last step was getting the questionnaire & the application form filled up with

the required payment, training undertaken & depositing the form with DOPS.

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The Research Findings

Most of the people contacted were aware of the company but were very much

unaware of the company’s product & their comparative advantages over the

competition in the market.

Being an insurance advisor is seen as an additional source of income & not a

full time employment by most of the people, least a career.

There were respondents who were existing advisors of other companies but

were interested in getting their family members registered as the company’s

advisor

The target population for the study was mostly the self-employed segment so

the urge to earn more money sitting at home was very much evident

The biggest hurdle in getting the process completed was the obligation to

undergo 100 hours of training. Most of the people were very reluctant in

undergoing training which was time consuming & disturbing to their primary

work

Even the option of online training was not that impressive to them due to lack

of computer knowledge

Further, the next problem that was evident was the prescribed fee of Rs. 1,000

was at times too much for the people specially for those who come in the

lower middle class but who do possess a good social network & could be a

viable option for the company

As regard the perception of the company is concerned the most outstanding

factor that stood out was the inability, on the respondent’s side, to differentiate

between the ICICI Prudential & the LIC. Moreover the policies of the LIC

were also casting their effect on the benefits being spelt out to the prospect.

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Another important factor for the company was that all the respondents were

aware of the ICICI brand name & hence the company’s name & its

international linkage is likely to pay off in the coming period of time

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Insurance 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 13 products can be enhanced with

up to 4 riders, to create a customized solution for each policyholder.

Savings Solutions

Save n Protect is a traditional endowment savings

plan that offers life protection along with adequate returns.

SecurePlus is a transparent & featured-packed

savings plan that offers 3 levels of protection.

CashPlus is a transparent, featured-packed savings

plan that offers 3 levels of protection as well as liquidity option.

CashBak 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.

Protection Solutions

LifeGuard 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.

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Child Solutions

SmartKid provides 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.

Market-linked Solutions

LifeLink is a single premium Market Linked Insurance

Plan, which combines life insurance cover with the opportunity to stay, invested in the

stock market.

LifeTime offers customers the flexibility and control to

customize the policy to meet the changing needs at different life stages. It offers 3

investment options - Growth Plan, Income Plan and Balanced Plan.

Market-linked retirement products

LifeTime Pension is a regular premium market-linked

pension plan

LifeLink Pension is a single premium market-linked

pension plan.

Flexible Rider Options

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

cost, depending on the specific needs of the customer.

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Accident & disability benefit: If death occurs as the

result of an accident during the term of the policy, the beneficiary receives an additional

amount equal to the sum assured under the policy.

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 specified critical illness. Benefits are payable to the insured

for medical expenses prior to death.

Major Surgical Assistance benefit: Provides financial

support in the event of medical emergencies, ensuring that benefits are payable to the life

assured for medical expenses incurred for surgical procedures. Cover is offered against

43 different surgical procedures.

Income benefit: This rider pays the 10% of the sum

assured to the nominee every year, till maturity, in the event of the death of the life

assured. It is available on SmartKid, SecurePlus & CashPlus

Waiver of Premium: In case of total & permanent

disability due to an accident, the premiums are waived till maturity. This rider is available

with SecurePlus & CashPlus.

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Hospital care

Life is all about being prepared. Be it your job, finances, family or future. Being prepared is the key to be in control of your life .that is why it is important to plan ahead for emergency, medical cost, so that you stay prepared for any eventuality. Hospital care offers a cashless hospitalization facility, clear coverage norms, fixed benefit payouts and even a recuperating allowance. So, you are aware of what you get under this policy which in turn will help you plan your treatment better. And since the cost of your treatment is taken care of, you can look forward to the most important aspect fast recovery.

Key benefits of hospital care

A. Facility of cashless hospitalization in more than 3000 network hospital

B. Benefit amount will be paid in addition to payment received you from other medical insurance plans.

C. You will received lump sum benefit amount irrespective of the actual billing

D. Long term guaranteed coverage up to 20 yearsE. Tax benefits on premium paid upto RS 50000 under section 80D

Coverage under the policy

a) Daily hospitalization cash benefits (DHCB)1. Get a benefit amount if you are hospitalized for

more than 24 hours i.e. At least 2 consequentive nights and must be charged for 2 days room expenses

2. the benefit amount is fixed and will be paid irrespective of actual hospitalization expenses

3. DHCB is payable for hospitalization up to 90 days per policy year, which includes any days spent in intensive care unit

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LIFE TIME SUPER

LIFE TIME SUPER is the unit linked insurance policy that offers benefit of life insurance cover along with flexible investment options.

KEY BENEFITS OF LIFE TIME SUPER

a) Potentially higher returns over the long term by investing in a unit linked funds b) Additional allocation of units at regular intervals to boost your investment c) Option to withdraw your money systematically over a period of 5 years on

maturity of the policy d) In case of an unfortunate event or death your family will receive sum assured or

fund value whichever is higher e) Cover continuance option available which ensures continuance of the life

insurance cover , even if you wish to take a break in premium payment f) Tax benefits on premium paid and benefits received under the policy as per the

prevailing income tax laws

switching option Under this option you can switch our investments between the funds at

any time depending on your financial priorities and investment objective. In any policy year, 4 switches can be done free of charge. The minimum

switch amount is RS 2000.

Additional allocation of units

There will be an additional allocation of units every 4th year starting from the end of the 4th year at the rate of 4%of annual premium into your investment fund .additional

allocation of units will be made only if the premiums have been paid regularly up to the date of allocation

Partial withdrawal benefit

Partial withdrawals will be allowed after completition of 3 policy years and on the payment of full 3 years premium. The minimum partial withdrawal amount is RS2000

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Maturity benefit

On maturity of this policy you will be entitled to receive the fund value at the time of maturity .alternatively you can opt for settlement options available

Settlement options

On the maturity of the policy, you can choose to take the fund value as a structured benefit. with this facility you can opt to get payments on a yearly, half-yearly , quarterly or monthly basis for the period of 1,2,3,4,or 5 years post maturity . At any time during the settlement period you have the option to withdraw the remaining fund value. During

the settlement period the investment risk in the investment portfolio is borne by the policy holder

LIFE TIME PLUS

LIFE TIME PLUS is a regular premium unit linked insurance policy that offers the benefit of life insurance cover along with flexible investment options . Thus you enjoy

potentially higher returns without compromising on the security of your family

KEY BENEFITS OF LIFE TIME PLUS

This policy offers you the protection of sum assured and fund in case of an unfortunate event of death

Potentially higher returns over the long term by investing in market linked funds Additional allocation of units at regular intervals to enhance your investment Option to withdraw your money systematically over a period of 5 years on

maturity of the policy Cover continuance option available which ensures continuance of life insurance

cover even if you take a break in premium payment Tax benefits on premium paid and benefits received under this policy as per the

prevailing income tax laws

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SMART KID

SMART KID NEW UNIT LINKED REGULAR PREMIUM policy is the policy in which you can invest your money in unit linked funds which allow you to withdraw

money to meet the educational expenses of your child.

KEY BENEFITS OF SMART KID

1. lump sum payment of sum assured plus company contributes future premiums in the unfortunate event of death of parent

2. with income benefit rider , the child would receive an annual allowance every year till maturity in the unfortunate event of death of the parent

3. withdrawal facility to provide money for key educational expenses of the child 4. potentially higher returns over the long term by investing in unit linked funds 5. cover continuance option to ensure continuance of life insurance cover even if

you take a temporary break in premium payments tax benefits on premiums paid and benefits received under the policy as per the prevailing

income tax laws

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Questionnaire

1. How many companies do you know are in the insurance business?

2. According to you, which is the most popular insurance company?

3. How many policies do you know about these companies?

4. Have you have purchased any life insurance? If yes, then of which company?

5. Are you satisfied with the service provided by the company?

6. Main reason of dissatisfaction?

7. Which company would you opt for as an alternative?

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According to you, which is the most popular insurance company?

67

13

5

53

4 1 2

LIC

ICICI Prudential

MAX New York Life

Birla Sunlife

Tata-AIG

Bajaj Allianz

SBI Life Insurance

HDFC

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Have you purchased any life insurance? If yes, then of which company?

40

60

Yes

No

73

16

92 2

LIC

ICICI Prudential

Max New York Life

HDFC

Birla Sunlife

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Are you satisfied with the service provided by the company?

30

50

20

Yes

No

Some What

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Main reason of dissatisfaction?

5

11

12

72

Unfriendly service

Hidden facts about thepolicy

Wrong information

Problems during claims

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Which company would you opt for as an alternative?

15

46

10

5

10

113

LIC

ICICI Prudential

Max New York Life

HDFC

SBI Life Insurance

Bajaj Allianz

Birla Sunlife

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Regulations - The Agency Laws

The basics of the insurance business in India are governed by the Agency Law, which is

part of the Indian Contracts Act, 1872. Further, after the industry got opened up the

regulatory authority has been the Insurance Regulatory & Development Authority

(IRDA).

Agent- The Definition.

According to the section 182 of the Indian Contract Act, 1872, “an agent is a person

employed to do any act for another or to represent another in dealing with a third person”.

In the insurance sector the term “Agent” is ordinarily applied to a person engaged by the

insurer to procure new business.

Powers of the Agent

An agent can act only to the extent of authority may be expressed or implied. An

authority is said to be expressed when it is given by words spoken or written. It is implied

when it is to be inferred from the circumstances of the case.

Life Insurance Agent

The Insurance Act, 1938 defines an agent as “one who is licensed under the act & is paid

consideration of his soliciting or procuring insurance business including business relating

to continuance, renewal or revival of policies of insurance”.

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The Insurance Regulatory & Development

Authority

Duties, Powers & Functions

Section 14 of IRDA Act, 1999 lays down the duties, powers & functions of IRDA.

Subject to the provisions of the Act & any other law for the time being in force,

the Authority shall have the duty to regulate, promote & ensure orderly growth of

the insurance business & re-insurance business.

Without prejudice to the generality of the provisions contained in sub-section(1),

the powers & functions of the Authority shall include,

1. Issue to the applicant a certificate of registration, renew, modify, withdraw,

suspend or cancel such registration.

2. protection of the interests of the policy holders, insurable interest, settlement of

insurance claim, surrender value of policy & other terms & conditions of

contracts of insurance.

3. specifying requisite qualifications, code of conduct, & practical training for

intermediary or insurance intermediaries & agents;

4. specifying the code of conduct for surveyors & loss assessors;

5. promoting efficiency in the conduct of insurance business;

6. promoting & regulating organizations connected with the insurance & re-

insurance business;

7. levying fees & other charges for carrying out the purpose of this Act;

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8. calling for information from, undertaking inspection of, conducting enquiries &

investigations including audit of the insurers, intermediaries, insurance

intermediaries & other organizations connected with the insurance business;

The Duties & Obligations of the Agent

As per the IRDA guidelines every advisor must be trained & licensed to sell life

insurance. The responsibilities & obligations of the advisors have been clearly defined.

Every insurance agent should himself & the insurance company that he represents

along with the license particulars.

The advisors should take into the actual needs of the clients before recommending

a plan.

All requisite information in respect of the products recommended should be

provided with a ‘Sales Illustration’ & the premium to be paid.

The agent is obligated to disclose the scales of commission likely to be earned by

him through sale of the recommended product, should the client wish to know it.

The nature of information required in the application form should be adequately

explained along with the requirement for supporting documents.

Once the proposal is submitted, the advisor shall inform the status of decision by

insurer promptly.

In case of a claim, the advisor is required to render necessary assistance in

complying with the requirements for settlement of claims by the insurer.

He/she should not interfere with any proposal introduced by any other any

insurance advisor/agent or force the client to terminate an existing policy taken

from him/her & take a new proposal within 3 years.

An advisor cannot induce the client to omit any material information or submit

any wrong information in the proposal form.

Further no rebating or offering any inducements in lieu of taking a policy is

allowed.

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ADVISORSThe importance of advisors

ICICI Prudential Life Insurance Co. Ltd. aspires to provide state of the art of customers’

service & opportunities & avenues for enterprising people to grow & prosper. The

company wish to grow exponentially that is backed by the latest technology, hence

offering its customers:

Faster & more accurate service.

Multi-channel distribution systems.

Highly trained professional sales people offering quality pre & post sales service.

It is in the above mentioned areas of personal specialization where the importance of an

advisor clearly stands out the advisor not only contribute in brining in new business for

the company, but also plays an important part in offering world class pre & post sales

service to the clients to the clients with the support of the organization. But the company

in its principles clearly states out that an advisor to means “much more than a salesman

or a saleswoman, we at ICICI Prudential recognize our advisors as the ambassadors of

our organization in the market place & we consider the advisor force would be our

biggest differentiating factor in the coming years”. The advisor is an important asset not

only for the organization from the business point of view but also to the society on the

whole as he/she is someone who provide valuable service to the community be helping

people attain financial security & build funds for their future needs thereby assisting them

in getting their financial freedom.

If looked from the other side of the business where the company is operating the

competitive Indian market & more so in the business of life insurance where the

customers looks for self-belief & faith then the advisor certainly holds the vital link in

the overall business proposition. They represent the company’s face & words on which

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the customers can trust because the customer knows that face. The advisor helps to create

a web from the business to grow & driving the customer to come to the company with

complete trust & faith.

The principle of channel development

The company in its vision out the urge to become the dominant players in the players in

the industry. The company believes that a high level of self-motivation & a coherent team

work for the organization can only achieve this on the whole. The company stresses great

emphasis on its core values which are:

Integrity

Customer first

Boundary less

Ownership

Passion

These are the foundation on which the organization works & the base for the overall

business environment of the company. based on the above mentioned ‘Pillars’ of the

company the management has devised the basic principles for the program as a whole

which are as following.

Recruit the best

Experts in knowing what exactly their customers wants is well versed in spotting the

talents from the pools & recruiting only those who have the intellect, energy, drive & the

passion to initiate new beginnings & even a lot of changes if they feel so. The incumbents

are treated as winners & the ‘custom hiring’ principle necessitates the factor of having the

right person at the right place with the right work. And definitely no compromises on

expertise & competencies.

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Personal Responsibility

The company believes that it is the prerogative of the company to create the team that it

wants. Therefore it aims at providing the learning & development conduits to employees

to enhance the domain of knowledge the important leadership & team skills.

Empowered Teams

Each employee is a stake holder in the organization & its growth. It is the one of the

important specialty here that the responsibility comes with a degree of autonomy &

accountability. The area of operation & growth is to be decided by the individuals

himself. But the communication is across the channels & ranks whereby the targets are

sent & the corrective measures & rewards also come to them. The most important factor

is the employee participation & empowerment.

Rewards & Recognition

The rewards in the company are directly proportional to the work & targets achieved &

gone beyond. You work hard you earn more. The contributions done are recognized in

the most objective & transparent manner & on the demonstrated competence level. But

yes there is certainly an extra for the people who go beyond then what is expected from

them.

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Shared Vision & Purpose

The company focuses on having the organizations striving towards a common goal,

which is easily done through the effective communication & work channel. Large scale

interactive process at the organization & group level helps in getting the employees know

of what is expected of them & how has been achieved. This factor encompasses through

all the critical intervention by the team members or the mentor of the team.

The working environment

The company is in a continuous search for the best of talents in the market, which align

with the vision & mission of the organization. The company states out its working culture

in certain important factors for the interested incumbents:

Urge from the incumbent to be a part of a world class sales team.

The freedom of working from his/her own office/residence.

The flexibility of working hours, full time or part time.

Opportunity to earn commission, bonus & incentives.

Unlimited earnings- directly proportional to your efforts.

Most important- the chance of flexible career.

The company is aware of the current trends in the market & the essential factors of

increasing the personal & human feeling to business. Thus, the company has got some

underlying facts & reasons for the working in a specific manner.

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The company gives the space & time required to grow, achieve & to seek new domains &

opportunities. The changing dynamics of business makes it evident that the new

opportunities will come from the gaps & needs in the market. Therefore, the need is to be

alert enough to notice these new happenings & tap them as & when they arise. The

people in the company are its most important asset but the real focus should be on

delivering on the promises undertaken.

The company also stresses out that the incumbents should have that urge & self belief so

that they are confident enough of driving the innovation & change drives that they think

are essential. The company believes in being innovative & tenacious enough to open a

new domains & horizons of business & hence regularly in the process of developing new

products & offerings state of art services to all its clients, brokers & agents in the

business. Further, with the growing symbiosis of technology in the business the company

also focuses on this aspect in the sense that it takes e-commerce & technology on a very

high priority with increasing resource being targeted at the new business economy & the

internet.

46

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THE PROFILE OF AN ADVISOR

Qualifications

1. Age should be ideally between 25-60 years.

2. Minimum education qualification is 10 + 2.

3. Good & convincing communication skills.

4. Capacity to build an impressive network.

5. Engaged in gainful business or corporation.

6. Willing to undergo extensive training & development programs

7. Pleasing personality.

Skills & Competencies

As quoted by Mr. Shubro Mitra, Head HR, ICICI Prudential Life Insurance the company

is always on a look out for people who have the following the skills & competencies that

we require in business are:

Actuarial skills.

Investment management skills.

Core operation skills.

Core underwriting skills.

Relationship management skills.

Project management skills

47

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The procedures of becoming an advisor

ICICI believes in getting who can align with the company’s principle & beliefs well

enough to grow on their own. In the words of the top management the company believes

that one can become an advisor for the leader only & only if he/she has the following:

Confidence

Self-motivation

Persuasion

Urge to be financially independent

Relationship skills

The broad steps that best describe the procedure of becoming an advisor in the company

are as following:

Confirmation of mutual interest as between the company & the individual

Appearing & clearing the selection interview

Profiling of the test dates between parties

Draft payment favoring ‘ICICI Prudential Life Insurance Co. Ltd.’, payable

Mumbai

Finalizing of the training dates & the venue

The company provides for the all-round development of the individual & any previous

experience or inexperience in the related field is not an obstacle. The professional

approach of the company in the training module helps it to train the incumbents in the

best possible manner. The company has got a professional in-house training staff that is

one of the best in the practice. The company has laid down for a State-of-art training on:

Selling skills

Product knowledge

Relationship skills

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The training is delivering through several convenient options keeping in view the

requirements of the individuals & the target of the company. The training is done at the

timing & venue decided upon by the parties concerned.

The incumbents have to complete hundred hours of training in any model that they

choose from. The guidelines laid down for the training are as per the books IRDA. The

training concept can be classified according to very different aspects, which can be the

delivery medium, & the time involved.

On the basis of the delivery medium the process can be of:

Face to face training

Online training

Self learning

On the basis of the time involved the process can be of:

Full time- involving 15 days

Part time- involving 27 days

Online training- involving 2 months

So if we summarize the steps & formalities involved in the whole process, the formalities

for a candidate to become the advisor as per the IRDA are:

Filling up the insurance advisor form

Documents required

7 passport size photographs

Acceptable age proof

Acceptable education proof

Acceptable residence proof

Payment through the demand draft

Completion of the training

Reporting of the form with the DOPS

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SWOT ANALYSIS

STRENGTH

ICICI Prudential Life Insurance Company Limited is right now the market leader in

Private Insurer segment.

WEAKNESS

The company right now has lesser number of agents (i.e. financial advisors) than LIC of

India which affects their sales in comparison to LIC of India.

OPPURTUNITY:

ICICI Prudential Life Insurance Company Limited can give LIC of INDIA agents an

opportunity to join ICICI Prudential Life Insurance Company Limited as ICICI

Prudential has got more incentive packages & servicing quality better than LIC of

INDIA. Doing this they can reduce their cost of training and can exploit their experience.

THREAT:

Other big brand names like BIRLAS, TATA, HDFC, SBI, and AVIVA. etc.

50

_____________________________________________________

Market Share37.1

13.515.2

5.53.1

7.4

1.8 0.6

6.1

1.3 0.5

ICIC

I PRU

HDFC

STAN

DARD

BIRL

A SU

N

ALLIA

NZBA

JAJ

OM K

OTAK

SBI L

IFE

ING

VYSY

A

MET

LIFE

TATA

AIG

AVIV

A LIF

E

AMP

SAMM

AR

Perc

enta

ge

51

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Recommendations

After going through the above table regarding market share of various companies in the

financial year 2006-2007, there is no reason why ICICI prudential should rejoice of being

the number one company in the country. The growth that companies like BIRLA

SUNLIFE, SBI LIFE INSURANCE, TATA-AIG, BAJAJ ALLIANZ, OM KOTAK

MAHINDRA, AVIVA, ING VYASA, METLIFE, & AMP SANMAR have produced that

can be quite a big unseen threat for the company in the coming years. So the company

should start thinking of what they want from the market & where they want to see

themselves after a span of 10 years because if the popularity of these companies

continues then one day they will become good competitors of ICICI Prudential & then

the consequences can be quite disturbing for the company.

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Conclusion

The company is in the regular process of investing considerably in expanding the

advisor base & administration & building infrastructure to meet demand in the

increasing market

The company’s group business is also beginning to show results, with restructured

group gratuity, superannuation & term products attracting 85 corporate clients

A new employee goes through a two day induction module which introduces

him/her to the life insurance industry, concepts of life insurance, the shared values

of the company as well as information on the company & core business processes,

which is reinforced through an intranet based induction module which can be

accessed anywhere, anytime

Training focuses on a learning architecture addressing both development of

generic & functional competencies comprising the four areas of leadership,

business mastery, personal effectiveness & functional mastery

The compensation strategy is based on the threefold model of pay for

Performance, Pay for the Job & Pay in line with the market

The company anticipates the market place to get increasingly competitive & it

believes that its first mover advantage will pay rich dividends & enable to

consolidate the leadership position amongst the private sector insurance players.

Being an ICICI Prudential insurance advisor can be one of the most rewarding

careers you will find. It is also hard work. But at ICICI Prudential life, your hard

works pays off in the form of compensation & recognition

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BIBLIOGRAPHY

Marketing management by - Philip Kotler Research methodology by – CR. KOTHARI

WEBSITEwww.iciciprulife.com

www.google.com

ANNUAL REPORT BY – ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED

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