Understanding the Basics of Natural and Target by Sanjay Gupta

A PROJECT REPORT ON

SUBMITTED TO MAEER’s MIT SCHOOL OF BUSINESS BY

PIYUSH SHRIVASTAVA Roll No. 260278 Batch No. 26th Batch

IN PARTIAL FULFILLMENT OF POST GRADUATE DIMPLOMA IN MANAGEMENT (PGDM) May-June, 2009-10

MAEER’s MIT SCHOOL OF BUSINESS PUNE

Table of CONTENTS Chapter No.

I 1.1 1.2 1.3 1.4 1.6 1.5 1.6 II 2.1 2.2 2.2 2.3 2.3.1 2.3.2 2.3.3 2.4 2.4.2 2.4.3 2.4.4 2.5 2.6 2.7

Title Declaration from student Certificate from organisation Certificate from Guide Acknowledgement List of Tables List of Graphs List of charts List if abbreviations, if any Executive summary Introduction Background of the study Theoretical background of the topic Company profile Statement of the problem Need of the study Scope of the study Objectives of the study Research Methodology Research design Primary data Secondary data Sample design Population Sample size Sampling method Method of data collection Instrument for data collection Drafting of a questionnaire Testing of questionnaire / Pilot survey Field work Data- analysis techniques Limitations

Page No. iii iv v vi vii viii ix x xi No. pages approx. 10 -15

No. pages approx. 05-07

III IV V VI

Data Processing and Analysis Findings Conclusions Recommendations

A B

Bibliography Appendices / annexure Questionnaire/s, if any List of contacts. If any

No. pages approx. 20-25 No. pages approx. 02-03 No. pages approx. 01-02 No. pages approx. 01-02

DECLARATION I, Mr.

PIYUSH SHRIVASTAVA

hereby declare that this project report is the record of authentic work carried out by me during the period from May to June and has not been submitted to any other University or Institute for the award of any degree / diploma etc.

Signature Name of the student (Piyush Shrivastava) Date:

CERTIFICATE FROM THE COMPANY

CERTIFICATE This is to certify that Mr. Piyush Shrivastava of MAEER’s MIT School of Business has successfully completed the project work titled “Understanding the Basics of Natural and Target Market” in partial fulfillment of requirement for the completion of PGDM course as prescribed by the MAEER’s MIT School of Business. This project report is the record of authentic work carried out by him during the period from May to June. He has worked under my guidance. Signature Name: Project Guide (Internal) Date: Counter signed by Signature Name Director Date:

ACKNOWLEDGEMENTS The success of this final report is the outcome of Guidance and valuable suggestions provided by all the concerned without whom the report could not fide on the right back. I am deeply indebted to Ms. Abhilasha Ajmera for giving me the opportunity to undergo my project in their esteemed branch and their timely suggestion and valued guidance. I also want to give my vote of thanks to the employees of ICICI Prudential Life Insurance. They constantly encouraged me and showed the right path from day first till the completion of my project. I would like to express my sincere gratitude to M. for giving me an opportunity to do this project work. I also express my sense of deep gratitude towards employees for introducing the program which enables us to learn more. Finally, I will be failing in my duty, if I do not thank my parents, friends and well wishers for their enthusiastic support and who have directly or indirectly helped in some way or the other in making this final report a success.

List of Tables 7

Table No.

Title

Page No.

1 2 3 4 5 . . . . . . . . . . . . . . . . . . . . . . . n List of Graphs Graph No.

Title 8

Page No.

1 2 3 4 5 . .

. . . . . . . . . . . . . . . . . . . . . n List of Charts Chart No.

Title

1 9

Page No.

2 3 4 5 . . . . . . . . . . . . . . . . . . . . . . . n List of Abbreviations Abbreviation

Full form

EXECUTIVE SUMMARY Objectives of the study:  To understand and analyze the life insurance strategies of ICICI Prudential Bank.  To understand an organization culture.  To understand the need of insurance.  To know and how to handle the pressure of work in an organization.

Methodology Adopted: The methodology adopted for the present study was focused on discussion, interview and close observation. Through the project is based upon study research, it was necessary to collect maximum information from the organization. The information regarding to the products and services of an organization can be get through the employees and the customers. We can also take out the information by primary data also. We can use the questionnaire method. By this method, we can actually understand what a customer / consumer wants from the organization. It helps to improve the quality of the product and the services of an organization. There are two types of data through which we collect the information and execute the results afterwards. They are as follows: ✔ Primary Data ✔ Secondary Data Primary Data: It is the information which has never been discovered or found out or available in the written format. This data or information is totally new and helps very effectively and efficiently to solve the unanswered questions. There are two methods to get primary data: ➢ The questionnaire method 12

➢ The observation method. Secondary Data: It is that information or data which has been already found out by someone or available in the written format. As the data is already published and known in the general, that’s it is known as Secondary Data. We can get this type of data from: ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢

Newspapers Internet Radio Magazines Books Television Pamphlets Journals Documents And many more

Major Findings: To understand the major findings related to the life

insurance of different banks, we compared three different types of insurance and compared with the ICICI Prudential Life. The three types of insurance are as follows: 1) HDFC Standard Life Insurance 2) Bajaj Allianz life Insurance Company Limited. 3) LIC, India Findings are mentioned in detail in the “Data Analysis portion” of the project report. Information regarding business banking, hence analysis and final execution is mentioned as follows on the basis of respective points: ✔ ✔ ✔ ✔ ✔

Most valuable bank Customer satisfaction Opinion about Axis Bank Awareness about product and services Time taken to solve the query on telephone

Recommendations: This project served as a great learning experience. It gave the opportunity to work in an organization and its unique culture. Through this experience, we not only learned to adjust to each other’s schedules and attitudes, but we also learned to be more responsible. 13

In addition to this, we also got an in-depth view of the insurance and its strategies. We vividly experienced how to face the situation and the problem of the customer at the most complicated time. It teaches us how to survive in an organization and its culture.

Chapter â&#x20AC;&#x201C; I

Introduction

1.1 Background of the study Mainly, we take the project in our hand to understand something new, something different and to enhance our knowledge. While working in an organization, we also learn about the organization culture, how to handle the work pressure and to search study, not only we manage our professional life and the personal life. We also do the research to know and to find some unanswered questions. By the help of research study, we not only get rid of our queries and problems but also got some new and primary information or data which helps the researcher in the further study. There should be some purpose, objective and scope of the study because these contents of the report remain the research alive otherwise the research would be of no use. Not only are these contents necessary in the research but topics such as data analysis, findings and conclusions makes the complete research and execute the final result in time. It is necessary to study the background of the study so that we can understand how to work on the research study and what should be the content so that the researcher can achieve its goal and present the findings on time.

1.2 Theoretical background of the topic 16

Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount called a premium at regular intervals or in lump sums. There may be designs in some countries where bills and death expenses plus catering for after funeral expenses should be included in Policy Premium. In the United States, the predominant form simply specifies a lump sum to be paid on the insured's demise. As with most insurance policies, life insurance is a contract between the insurer and the policy owner whereby a benefit is paid to the designated beneficiaries if an insured event occurs which is covered by the policy. The value for the policyholder is derived, not from an actual claim event, rather it is the value derived from the 'peace of mind' experienced by the policyholder, due to the negating of adverse financial consequences caused by the death of the Life Assured. To be a life policy the insured event must be based upon the lives of the people named in the policy. Insured events that may be covered include: â&#x20AC;˘ Serious illness Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into

the contract to limit the liability of the insurer; for example claims relating to suicide, fraud, war, riot and civil commotion. Life-based contracts tend to fall into two major categories: • Protection policies - designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance. • Investment policies - where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US anyway) are whole life, universal life and variable life policies. LIST OF LIFE INSURANCE COMPANIES IN INDIA 1. Bajaj Allianz life Insurance Company Limited. 2. Birla Sunlife Insurance Company Limited. 3. HDFC Standard Life insurance Company limited. 4. ICICI Prudential Life Insurance Company Limited. 5. ING Vysya Life Insurance Company Limited. 6. Life Insurance Corporation of India. 7. Max New York Life Insurance Company Limited. 8. Met Life India Insurance Co. Pvt. Ltd. 9. Kotak Mahindra Old Mutual Life Insurance Limited. 10. SBI Life Insurance Co. Ltd. 11. Tata AIG Life Insurance Co. Ltd. 12. Reliance Life Insurance Co. Ltd. 13. Aviva Life Insurance Company India Ltd. 14. Sahara India Life Insurance Company Ltd. 15. Sriram Life Insurance Company Ltd. And many more…..

1.3 COMPANY PROFILE

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, which is one of India's foremost financial services companies, and 18

Prudential plc, which is a leading international financial services group headquartered in the United Kingdom. ICICI Prudential began the operations in December 2000. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). It has been voted as India's Most Trusted Private Life Insurer for three consecutive years. ICICI Prudential Life Insurance Company has various insurance plans that have been designed for different individuals, as every individual has different insurance needs. It is the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India. ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims. For the past eight years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

Board Of Directors : The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Ms. Chanda D. Kochhar, Chairperson Mr. N. S. Kannan, Director Mr. K. Ramkumar, Director Mr. Barry Stowe, Director 19

Mr. Adrian O’Connor, Director Mr. Keki Dadiseth, Independent Director Prof. Marti G. Subrahmanyam, Independent Director Ms. Rama Bijapurkar, Independent Director Mr. Vinod Kumar Dhall, Independent Direct Mr. V. Vaidyanathan, Managing Director & CEO Mr. Puneet Nanda, Executive Vice President

Our Vision : To be the dominant Life, Health and Pensions player built on trust by world-class people and service. This we hope to achieve by: • Understanding the needs of customers and offering them superior products and service • Leveraging technology to service customers quickly, efficiently and conveniently • Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders • Providing an enabling environment to foster growth and learning for our employees • And above all, building transparency in all our dealings The success of the company will be founded in its unflinching commitment to Integrity, Customer First, Boundary less, Ownership and Passion. Each describes what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector.

Our Values : Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.

Contact Information: 20

Registered Office ICICI Towers, 9th floor, Bandra-Kurla Complex Mumbai - 400 051. Tel: 494 3232 Delhi office: 3rd floor, Videocon Towers, E-1, Rani Jhansi Road, New Delhi - 110055. Tel: 601 3232, Email: wecoveru@icici.com Visit us on: www.iciciprulife.com

Products and Services: Insurance Solutions for Individuals: ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder. Savings & Wealth Creation Solutions: ➢ ICICI Pru Save 'n' Protect is an ideal plan for those who want to accumulate funds on a regular basis while enjoying insurance protection. ➢

ICICI Pru Cashbak is a single policy that combines the triple benefit of protection, savings & periodic liquidity.

➢

ICICI Pru Life Time Gold is a unit-linked plan which offers potentially higher returns over the long term with flexible investment options to help you achieve your goals. It offers 8 fund options - Preserver, Protector, Return Guarantee Fund, Balancer, Flexi Balanced, Multiplier, R.I.C.H and Flexi Growth.

➢

ICICI Pru Life Stage RP is unit linked plan that provides you with an option of lifecycle-based portfolio strategy that continuously re-distributes your money across various asset classes based on your profile, helping you achieve your desired financial goals.

➢

ICICI Pru Life Link Super is a single premium unit linked insurance which offers attractive premium allocation along with the opportunity to enjoy potentially high returns over the long term, without compromising on 21

the protection of your family. ➢

ICICI Pru Invest Shield Life New is a unit linked plan that allows the customer to enjoy the benefits of potentially higher returns while guaranteeing him that he will get back at least all the premiums paid by him, while providing protection to his family with a life insurance cover.

➢

ICICI Pru Invest Shield Cashbak is a unit linked plan that provides premium guarantee while maintain a balance between return, safety & liquidity.

➢

ICICI Pru Wealth Advantage is a unique whole life single premium unit linked plan that provides long term coverage up to the age of 70 years and provides you the option to systematically withdraw your money.

➢

ICICI Pru Secure Save is a unique unit linked insurance plan which aims to grow your money over time with an assurance of a minimum guaranteed amount at maturity to protect you from any market downside.

➢

ICICI Pru Life Stage Assure a unit linked insurance plan that provides Guaranteed Maturity Addition of 100%- 450% of first year premium based on the term and number of premiums paid, with the additional advantage of a lifecycle based portfolio strategy that allocates the investor’s money across various asset classes based on his age and risk appetite.

➢

ICICI Pru Assure Life is a unit linked insurance plan that provides a Guaranteed Maturity Addition ranging from 140% to 450% of the first year premium while giving you the flexibility to choose your portfolio strategy from the second year.

Protection Solutions: 

ICICI Pru Pure Protect is a flexible and affordable term product, with which you can ensure your life and provide total security for your family in case of an unfortunate event.



ICICI Pru Life Guard is a protection plan, which offers life cover at low cost. It is available in 2 options –level term assurance with return of premium & single premium.



ICICI Pru Home Assure is a mortgage reducing term assurance plan 22

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

Child Plans: ✔

ICICI Pru Smart Kid New ULRP is a policy that is designed to provide money at key educational milestones in the child's life. Smart Kid plans are also available in traditional form.

Retirement Solutions: ➢

ICICI Pru Forever Life is a traditional retirement product that offers guaranteed returns for the first 4 years.

➢

ICICI Pru Life Time Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement.

➢

ICICI Pru Life Stage Pension is a regular premium unit linked pension plan that provides you with a unique lifecycle-based strategy that continuously re-distributes your money across various asset classes based on your age and risk profile.

➢

ICICI Pru Life Link Super Pension is a single premium unit linked pension plan.

➢

ICICI Pru Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options.

➢

ICICI Pru Life Stage Assure Pension is a unique pension plan that assures guaranteed additions of up to 200% of the first year premium, giving investors an unmatched start towards accumulating for their retirement kitty.

➢

ICICI Pru Elite Pension is a unit linked pension plan that provides 23

flexibility to the customer to pay for a limited term and lets him build a kitty for his retirement to provide an annuity for life.

Health Solutions: 

ICICI Pru Hospital Care is a fixed benefit inpatient hospitalization plan, covering various stages of treatment with a daily allowance, ICU, procedures & recuperating allowance. It covers a range of medical conditions and has long term guaranteed coverage up to 20 years.



ICICI Pru Crisis Cover is a 360-degree product that will provide longterm coverage against 35 critical illnesses, total and permanent disability, and death. ICICI Pru Diabetes Care Active is a long term insurance policy created for individuals with Type II diabetes and pre-diabetes. It offers long term (up to 20 years) control over diabetes through a specially designed Wellness Programmed including regular health checkups and a Diabetes Coach to facilitate diabetes management. It also provides you coverage against seven major critical illnesses.



ICICI Pru Cancer Care is a specialty health plan for most types of cancers. The plan gives a lump sum payout on diagnosis as well as at different stages in the treatment of various cancer conditions.



ICICI Pru MediAssure is a reimbursement inpatient hospitalization health insurance policy that provides guaranteed insurability till age 75 years.



ICICI Pru Health Saver is a comprehensive health plan, provides a reimbursement inpatient hospitalization cover along with building a health savings fund to cover any other day-to-day medical expenses.

Group Insurance Solutions: ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. ➢

Group Gratuity Plan: ICICI Prudential Life's group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner and also avail of tax benefits as applicable to approved gratuity funds. 24

➢

Group Leave encashment Plan: It offers a market linked and traditional leave encashment plan designed to aid the employer to build a fund to meet their future leave encashment liability. The contributions made will be invested as per the chosen investment plans and will be available for payment of the benefit when it falls due. It provides for term cover for all the employees covered under the policy.

➢

Group Superannuation Plan: It offers a flexible market linked and traditional schemes that provide substantial benefits to both employers and employees. Both defined contribution and defined benefit (DB) schemes are offered to optimize returns for members of the trust and rationalize cost. Group Immediate Annuities: ICICI Prudential Life realizes the importance of prudent retirement planning. With this in mind, it has developed a suite of life and joint life annuities which guarantee periodic payment to annuitants up to death. Further there are options which return the purchase price on death of annuitants.

➢

Group Term Plan: ICICI Prudential Life's flexible group term solution helps provide an affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.

Flexible Rider Options: ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer. ✔

Accident & disability benefit:: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the 1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser.

✔

Critical illness benefit: Critical Illness Benefit Rider provides protection against 9 critical illnesses to the policyholder when attached to the basic plan.

PRODUCT PORTFOLIO At ICICI Prudential, we understand that your needs & goal varies at different stages of your life. Hence we offer a range of insurance plans to help you achieve your financial objective. • Wealth creation Solution ULIPs are the right insurance solutions for you if you are looking for a strong wealth creation proposition allied to a core insurance element. Such plans are ideal for people who are in the late 20s or the early 30s who by investing in such a plan can have the flexibility of using it to fund any of their long-term financial goals such as purchase of a house or funding of their children education. •

Retirement solution Retirement is the end of active employment and brings with it the cessation of regular income. However, our pension plans ensure that your regular, disciplined savings accumulate over a period of time to provide you a steady income post-retirement. Our Unit linked pension plans also come with a wide range of annuity options which gives you the flexibility to structure the post-retirement benefit pay-outs.

•

Health Insurance Health Insurance has become extremely important today given the rise in healthcare expenses and lifestyle related diseases. It is vital, therefore, to invest in an adequate health cover for you and your entire family. Health Insurance helps cover your medical expenses. By doing so, it safeguards you against a significant financial impact that can result from any medical eventuality. Our health insurance plans can prevent a medical emergency from becoming a financial one.

â&#x20AC;˘ Child Insurance As a parent, one of your important responsibilities is to ensure that your Childs development is not hampered either due to rising costs or tough circumstances that cannot be foreseen. Our child insurance plans offer money at key milestones of your Childs education thus ensuring that your Childs education continues unhampered even if something unfortunate happens to you.

The ICICI Prudential Edge: The ICICI Prudential edge comes from our commitment to our customers, in all that we do - be it product development, distribution, the sales process or servicing. Here's a peek into what makes us leaders. 1. Our products have been developed after a clear and thorough understanding of customers' needs. It is this research that helps us develop Education plans that offer the ideal way to truly guarantee your child's education, Retirement solutions that are a hedge against inflation and yet promise a fixed income after you retire, or Health insurance that arms you with the funds you might need to recover from a dreaded disease. 2. Having the right products is the first step, but it's equally important to ensure that our customers can access them easily and quickly. To this end, ICICI Prudential has an advisor base across the length and breadth of the country, and also partners with leading banks, corporate agents and brokers to distribute our products. 3. Robust risk management and underwriting practices form the core of our business. With clear guidelines in place, we ensure equitable costing of risks, and thereby ensure a smooth and hassle-free claims process. 4. Entrusted with helping our customers meet their long-term goals, we adopt an investment philosophy that aims to achieve risk adjusted returns over the long-term. 5. Last but definitely not the least, our team is given the opportunity to learn and grow, every day in a multitude of ways. We believe this keeps them engaged and enthusiastic, so that they can deliver on our promise to cover you, at every step in life.

Promoters: ✔

ICICI Bank

ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank and the second largest bank in the country with consolidated total assets of about US$ 95 billion as of March 31, 2009. ICICI Bank’s subsidiaries include India’s leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Bank’s presence currently spans 19 countries, including India. ✔

Prudential Plc

Established in London in 1848, Prudential plc is a leading internal retail financial services group with significant operations in Asia, the US and the UK. Prudential has been writing protection and savings insurance for over 160 years, and today has more than 21 million customers worldwide and over 249 billion in assets under management (as of December 31, 2008). In Asia, Prudential is the leading Europe-based life insurer with operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the 28

Philippines, Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the largest asset management companies in terms of overall assets sourced in Asia ex-Japan, with 36.8 billion funds under management (as of December 31, 2008) and operations in ten markets including China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates. â&#x153;&#x201D; The Company ICICI Prudential Life's capital stands at Rs. 4,780 crores (as of June 30, 2009) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April 1, 2009 to June 30, 2009, the company has garnered total received premium of Rs 807 crores and has underwritten over 9 million policies since inception. The company has assets held over Rs. 43,000 crores as on June 30, 2009. â&#x153;&#x201D; Distribution ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with 2074 branches (including 1,116 micro-offices) and an advisor base of over 225,000 (as on June 30, 2009). The company has 7 banc assurance partners having tie-ups with ICICI Bank, Jalgaon Peoples Co-op Bank, Ratanagiri District Central Co-op Bank, Ballia Kshetriya Co-operative Bank, Renuka Nagrik Sahakari Bank, Arvind Sahakari Bank, Bhandara Urban Co-operative Bank. Today, this company has over 2100 branches, which include 1,116 microoffices, over 290,000 advisors and 18 banc assurance partners. We began our operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of 2074 branches (inclusive of 1,116 micro-offices), over 225,000 advisors; and 7 banc assurance partners. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. We began our operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of over 2100 branches (inclusive of 1,116 micro-offices), over 290,000 advisors; and 18 banc assurance partners.

Foreign Partner: Established in 1848, Prudential plc. of U.K. has grown to be the largest life insurance and mutual fund company in U.K. 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. 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. Their latest venture ICICI Prudential Life plans to take care of the insurance needs at various stages of life.

Key Statistics about ICICI Prudential Life Insurance: Top Locations • Bombay Area, India (500+) • Delhi Area, India (256) Address ICICI Pru Life Towers, 1089 Appasaheb Marathe Marg, Prabhadevi Mumbai, Maharashtra 400025 India Phone: 40391600 Fax: 91 22 2499 7029 Headquarters Bombay Area, India Industry Insurance Type Privately Held Status Operating Company Size 10,000 employees Founded 2000 http://www.iciciprulife.co Website m

More ICICI Prudential Life Insurance Company Limited info » Common Job Titles

Manager Unit Manager

13% 10% 30

Sales Manager 6% Area Manager 5% Human Resources Manager 4%

Top Schools

Median Age

Gender

Univ. of Mumbai 7% Delhi Univ. 6% Kendriya Vidyalaya 3%

28 years

Male Female

81% 19%

Companies related to ICICI Prudential Life Insurance Company Limited Parent Company • First Protective • ICICI Bank Subsidiaries • ICICI Prudential AMC Ltd • ICICI Lombard Career path for ICICI Prudential Life Insurance Company Limited employees Before: • HDFC Bank • HDFC Standard. After: • Tata AIG Life. • Max New York. ICICI Prudential Life Insurance employees are most connected to: 31

Bharti Axa Life Insurance • IDBI Fortis Life Insurance Co Ltd Future Generali India Life Insurance Co • Tata AIG Life Insurance •

Our Growth: ICICI Prudential Life has retained its leadership position over the past eight years, in the Indian private life insurance sector. Some of the factors that distinguish us from other players in the market are: • Assets held are over Rs. 32,000 crores as on March, 2009. • Total capital stands at Rs. 4,780 crores (as of March, 2009) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. • Posted a growth of 13% (April 1, 2008 to March 31, 2009) for garnering total received premium (new business + renewal) of Rs 15,356 crores as against Rs 13,563 crores in FY2008. • Underwritten over 9 million policies since inception. ICICI Prudential Life was formed in 2000 as a 74%–26% joint venture between the Indian development bank ICICI Ltd (now renamed ICICI bank Ltd rated International Long–term ’BB+’) and Prudential Plc of the UK (rated International Long–term AA–’ (AA minus)). In Fitch’s view, ICICI Prudential Life benefits from the resources and expertise of its shareholders. This has assisted the company in building strong management and risk control systems and has also facilitated access to key operational ’know– how’ and advice. Shareholders have also provided ongoing capital support and, on the basis of March 2005 year–end data, Fitch considers ICICI Prudential Life’s capitalization to be very strong. During the current fiscal year, an additional INR2,600 million (USD59m) of equity capital was injected and Fitch expects the shareholders to make further capital contributions in the next few years as the company’s business continues to expand. The Indian life assurance market is dominated by the state company, Life Insurance Corporation of India which has an approximately two thirds market share by new business. However, within the private sector, ICICI Prudential Life has a leading new business market share of 33%. The company has expanded very rapidly; for FY2005 it recorded a premium 32

income of INR23.6 billion (USD527m), of which INR15.8bn was new business. Its focus is on linked life and pensions business, which accounted for 87% of 2005 premiums, with participating life and annuity business accounting for almost all of the remainder. About 70% of its business is produced by tied agents, while another 20% is derived from bank branch sales and the remainder mainly from corporate agencies.

Need for Life Insurance Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. It is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets. Let us look at these unique benefits of life insurance in detail.

Asset Protection From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation. The core benefit of life insurance is that the financial interests of oneâ&#x20AC;&#x2122;s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.

Goal based savings Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence. Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Life insurance is the only investment option that offers specific products tailor made for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met. 34

Life insurance ensures that your family will receive financial support in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It protects your family from financial crises. In addition to serving as a protective cover, life insurance acts as a flexible money-saving scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably. The table below gives a general guide to the plans that are appropriate for different life stages.

Life Stage Young & Single

Primary Need

Life Insurance Product

Asset creation

Wealth creation plans

Young & Just Asset creation & married protection Married with kids

Wealth creation and mortgage protection plans

Children's education, Education insurance, mortgage Asset creation and protection & wealth creation protection plans

Middle aged Planning for retirement Retirement solutions & mortgage with grown up & asset protection protection kids Across all lifeHealth plans stages

Health Insurance

Insurance Features Factors to consider One of the trickiest decisions in the tax-savings process is the one on where do I invest? With a plethora of options to choose from, it is important to 35

understand the various facets of these options and see how they stack up against each other. Remember, you get the tax benefit only once, but you are tied up to the product for a long-term. So, you need to choose accordingly. Given below are some of the important aspects on which you should judge your investment options. • Tax treatment: While all tax-savings options give you tax benefit at the time of investment, find out about the taxation treatment at the time of maturity. What many people don’t know is that there are instruments in which the maturity amount is not tax-free and is treated as taxable income. So, read the fine print and find out whether you stand to gain both at the time of the investment as well at the time of maturity. •

Inflation protection: While fixed returns are desirable from the safety aspect, when seen in the light of inflation, they tend to lose their sheen. In contrast, market-linked investments offer the potential of higher returns, but typically do not come with any guarantee. So, depending on your age, income and risk-appetite, decide where you want to invest.

•

Flexibility: Your financial needs keep on changing with time. Hence it is critical that your chosen tax saving option offers you the flexibility of customizing the product to suit your changing needs & requirements.

•

Liquidity: One of the important criteria by which any investment option is to be judged is the liquidity options available. Ideally your investment plan should allow for money to be withdrawn in the event of sudden eventualities arising. Even after such withdrawals your investment should not close but continue as before.

Dual tax benefit with insurance: Insurance has traditionally been one of the preferred investment options for investors seeking to reduce their tax burden but there are many benefits of insurance that people are not aware of:

• Health insurance joins the party Sec 80C has always been the more popular and glamorous tax savings section. People know how much they can save and what kind of investments come under the ambit of Sec 80C. But, this year’s budgetary provisions brought the limelight on a so-far lesser known tax provision which is Sec 80D. Sec 80D covers premium paid towards health insurance plans. This year’s budget increased the cap of investments under Sec 80D by Rs 15,000. This covers premium paid towards medical insurance taken on the health of self, spouse and dependent children (max Rs 15,000) and on the health of parents. So, now when you combine Sec 80C and 80D, you find that you can invest up to Rs 1.35 Lacs which for someone in the highest tax slab converts to an additional savings of almost Rs.5, 099. Tax treatment at the time of maturity when people are taking a decision related to their tax savings investments, they look for tax savings only at the time of investment. But in doing so, they only see the incomplete picture as they do not look at the tax treatment at the time of the maturity of their investments. So, in the worst case they end up investing in a plan which does give them tax savings at the time of investment but at the time of maturity, the maturity proceeds get taxed. •

For e.g. - if a person invests Rs. 100 in a plan in which the maturity amount gets taxed, he saves Rs. 33 u/s 80C. Let us assume that after a year, this investment matures and the investment value is Rs. 300 (Growth Rs. 200). If this growth were to be taxed on maturity, he will end up paying Rs 66 as tax. So, the net gain for the investor is much lower. Regular premium life Insurance is one of the few tax savings investment options which give you the benefit of tax-free maturity. So, not only do you save tax on your premium payments but you also enjoy tax free maturity benefits.

Awards:

ď ś ICICI Prudential Life Insurance has won the first runner up award for the Best Defect Elimination in Service & Transaction category at Asian Six Sigma Excellence Summit 2009.

ď ś ICICI Pru Life ranked as the Most Trusted Pvt Life Insurance brand in the Brand Equity "Most Trusted Brands 2009" survey

 ICICI Prudential Life won a Gold award for AboutULIPS.com and Health Saver campaign, innovation award for www.taxguru08-09.com and a silver award for its Insurance yoga campaign at the ICICI Group Marketing Excellence award.  Confederation of Indian Industry (CII) - Western Region recently awarded ICICI Prudential Life a 'Commendation for Strong Commitment to HR Excellence 2008' at the CII HR Summit 2008.



ICICI Prudential Life Insurance was awarded with the coveted 'ICAI Award for Excellence in Financial Reporting' by the Institute of Chartered Accountants of India (ICAI) for the financial year ended March 31, 2008. 39

 ICICI Prudential Life was awarded the Life Insurance Company of the Year at the12th Asia Insurance Industry Awards 2008.

 ICICI Prudential Life was awarded with two Bronze Effie's in the services category for its Corporate campaign and Retirement Number campaign.

 ICICI Prudential Life Insurance won the award for the Best Life Insurer-Runner up at the Outlook Money & NDTV Profit Awards 2008. 40

 ICICI Prudential Life was awarded the SAP ACE 2008 Best Business Objects Award for its IT practices

 ICICI Prudential Life won the Award for Brand Excellence in the Banking and Financial services category at the Asia Brand Congress 2008

 Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance Co. Ltd. was adjudged the Businesswoman of the

year at The Economic Times Awards for Corporate Excellence, 2007-08.

ď ś ICICI Prudential Life won the UK Trade & Investment India Business Awards 2008 in the Business Partnership AwardLarge Company category

ď ś ICICI Prudential Life won the ICICI Group Marketing Excellence Award 2008 in three key categories for its marketing initiatives

 ICICI Prudential Life was awarded the INDY’s Award for Excellence in Mass Communication in the category of Most Creative Advertisement-Television

 India's Most Customer Responsive Insurance Company . Avaya Global Connect - Economic Times. Customer Responsiveness Awards, 2007  Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was adjudged as one of the 50 Most Powerful Women in Business by The Financial Express.

 Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was adjudged the Entrepreneur of the Year-Manager at the Ernst and Young Entrepreneur Awards 2007

 Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was awarded the Outstanding Businesswoman of the Year at CNBC TV18's India Business Leader Awards 2007

 ICICI Prudential Life Insurance won the award for the Best Life Insurer-Runner up at the Outlook Money & NDTV Profit Awards 2007

 ICICI Prudential Life’s, retirement solutions campaign for the year 2006-07 was awarded the Bronze Effy trophy in the services category. It also won the Brand Equity Bravery Award 2007, instituted by Ad club.

 ICICI Prudential Life’s website, www.iciciprulife.com was awarded the best website among private life insurers at the Web 18 and Frost & Sullivan Genius of the Web Awards 2007 for commendable work in the online.

 Innovation Award for launching Diabetes Care – Prudence Award 2006. People Award for excellence in training and people development - Prudence Award 2006

 India's Most Customer Responsive Insurance Company. Avaya Global Connect - Economic Times. Customer Responsiveness Awards/  Most Trusted Private Life Insurer. The Economic Times - A C Nielsen Survey of Most Trusted Brands – 2003, 2004 and 2005

 Prudence Customer Centricity Award 2004 & 2005. Prudential Corporation Asia  Best Life Insurer 2003. Outlook Money Awards 2003 & 2004

 IMM Award for Excellence. Institute of Marketing & Management

 Organization with Innovative HR Practices Indira Group of Institutes

 Super brand 2003-04

 Organization with Innovative HR Practices Asia-Pacific H R Congress Awards for HR Excellence

 Silver Effie for Effectiveness of the ‘Retire from Work not life’ advertising campaign Effies 2003

 ICICI Prudential Life was recognized as the most trusted brand amongst private life insurers in the Economic Times-Most Trusted Brand survey 2008.

 IMM Award for Excellence. Institute of Marketing & Management

 Organization with Innovative HR Practices. Indira Group of Institutes

 Organization with Innovative HR Practices. Asia-Pacific H R Congress Awards for HR Excellence

1.4 Statement of the problem

In every working condition, there were some problems always occurred but finally we, anyhow, manage these unwanted problems. During summer training I also faced some real life problems but I managed all of them and reached to my target. 

Due to non-commerce background, I was not aware of banking and their strategies. But as time passed, I leant a lot from the employees and it helped me to know more about life insurance plan.

 To understand the organization culture, is quite a tough job. In the earlier time, it was difficult to get into the culture, but I really appreciated to the employees who supported me a lot.  In the market survey, I faced with the transportation problem. Again due to the co-operation of the employees, this problem also had been solved.



I was confused regarding to the contents of the project report. To solve this matter, my internal and external guide helped me a lot and advised me on regular basis how to work on the project report.



As I was a new trainee in the bank, almost every one motivated me and supported towards my work. Whatever problem I faced there, the employees were always there.



I also appreciated my family and my friends who encouraged me in my difficult times and enhanced my moral support time to time.

1.5 Need of the study Satisfaction is defined as . . . “A person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.” Customer Satisfaction can be defined as supplying or gratifying all wants or wishes, fulfilling conditions or desires, or the state of the mind anything that makes a customer feel pleased or contented. Consumer Behavior: Consumer behavior is defined as the behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs.

The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services ideas, or experiences to satisfy needs and desires Customer value: The ratio between the customersâ&#x20AC;&#x2122; perceived benefits (economic, functional and psychological) and the resources (momentary, time, effort, psychological) used to obtain those benefits. Customer satisfaction: Customer satisfaction is the individualâ&#x20AC;&#x2122;s perception of the performance of the product or service in relation to his or her expectations. Motivation: The processes that account for an individualâ&#x20AC;&#x2122;s intensity, direction, and persistence of effort toward attaining a goal. Personality can be described ad the psychological characteristics that both determine and reflect how person responds to his or her environment. Perception is defined as the process by which an individual selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. Consumer learning is the process by which individuals acquire the purchase and consumption knowledge and experience they apply to future related behavior.

1.6 Scope of the study ➢ This study can be conducted by comparing the performances & products of two private & a government insurance players in insurance industry. ➢ The number of respondents to be surveyed can be improved. ➢ The study can be conducted in Indore city only. ➢ This study can be conducted to analyze the market stand of ICICI Prudential life insurance Company limited.

Thejointstrengths Apowerful joint venture partnershipwitheachcarryinga set of complementingeachothers

strengths

Reputation

Brandstrength

Insurance expertise

Infrastructure Customer base

ICICI

PRUDENTIAL

Product

Market Innovators

Distribution

Local knowledge

Operations

1.7 Objectives of the study For every problem there is a research. As all the researches are based on some and my study is also based upon some objective and these are as follows. 1. To understand the insurance business and products of ICICI Prudential life insurance co ltd. 2. To find out the peopleâ&#x20AC;&#x2122;s perception about life insurance. 3. To find out whether people were really aware of life insurance. 4. To find out how people think about private life insurance. 5. To find out what respondents expect from life insurance. 6. To understand Consumer buying behavior 52

7. To come out with conclusion and suggestions based on the analysis and the Interpretation of data.

Chapter - II

Research Methodology

2.1 RESEARCH DESIGN: Research design provides the glue that holds the research project together. A design is used to structure the research, to show how all of the major parts of the research project - the samples or groups, measures, treatments or programs, and methods of assignment, work together to try to address the central research questions. Research design investigates the process of designing in fields. It is related to Design methods in general or for particular disciplines. A primary interpretation of research design is that it is concerned with undertaking research into the design process. Secondary interpretations would refer to undertaking research within the process of design. The overall intention is to better understand and to improve the design process.

2.2 Primary Data: The data which is collected by new research is known as primary data. There are four types of primary data. They are as follows:    

Personal interview Close observation Survey conduction Group discussion

Hence the primary data which is collected for the report is based on close observation and survey conduction. Survey conduction has been done through the questionnaire.

2.3 Secondary Data: The data which is already exist or known is known as secondary data. We can collect secondary data through: ➢ Internet 55

➢ ➢ ➢ ➢ ➢

Books Newspaper Magazines Television Radio and many more.

The secondary data for the report is taken mainly from the internet and books. They remained as the best source for the data collection for making the project report. Newspaper and magazines were also the helpful source for the knowledge.

2.3 Sample Design: Sampling is that part of statistical practice concerned with the selection of individual observations intended to yield some knowledge about a population of concern, especially for the purposes of statistical inference. The sampling process comprises several stages: • • • • • • •

Defining the population of concern Specifying a sampling frame, a set of items or events possible to measure Specifying a sampling method for selecting items or events from the frame Determining the sample size Implementing the sampling plan Sampling and data collecting Reviewing the sampling process

2.3.1 Population: A population can be defined as including all people or items with the characteristic one wish to understand. Because there is very rarely enough time or money to gather information from everyone or everything in a population, the goal becomes finding a representative sample (or subset) of that population. Sometimes that which defines a population is obvious. For example, a manufacturer needs to decide whether a batch of material from production is of high enough quality to be released to the customer, or should be 56

sentenced for scrap or rework due to poor quality. In this case, the batch is the population.

2.3.2 Sample Size: It means the total number of items which we take out for the sampling process. For an example, to fill up the questionnaire for a particular survey, we can fill it up by 100 customers or people. Therefore the sample size would be 100. Customers can be randomly selected or we can focus on a particular segment (say Hotels, Jewelers, General shops and many more). Formulas, tables, and power function charts are well known approaches to determine sample size.

2.3.3 Sampling Method: A variety of sampling methods can be employed, individually or in combination. Factors commonly influencing the choice between these designs include: • • • • •

Nature and quality of the frame Availability of auxiliary information about units on the frame Accuracy requirements and the need to measure accuracy Whether detailed analysis of the sample is expected Cost/operational concerns

There are various types of sampling methods: 1. 2. 3.

4. 5.

Simple random sampling Systematic sampling Stratified sampling 1) Post stratification 2) Oversampling Probability proportional to size sampling Cluster sampling 57

Matched random sampling 7. Quota sampling 8. Mechanical sampling 9. Convenience sampling 6.

2.4 Method of data collection: Good data collection involves: • Following the defined sampling process • Keeping the data in time order • Noting comments and other contextual events • Recording non-responses Most sampling books and papers written by non-statisticians focus only in the data collection aspect, which is just a small though important part of the sampling process.

2.4.2 Instrument for data collection: Data can be collected in various formats. They can be in the written format, pdf file or may be a presentation or they can be stored in somewhere like computer hard disk, pen drive and floppy or memory card. We can also collect data in the form of primary data and secondary data. Through questionnaire method or observation method, we can collect the information or data related to the primary method whereas newspaper, radio, television, magazines, pamphlets, internet and many more other things helps us to collect the information or data which comes under the light of secondary data. These both types of data help us to execute the final result and solved many of the problems.

2.4.3 Drafting of a questionnaire: 58

✔ ✔ ✔ ✔ ✔

Introduction and screening questions. Asking sensitive screening questions. A checklist of do's and don'ts in the questionnaire format. Pre-coding questions and planning the physical layout. Pre-testing a questionnaire with a workshop in revising questionnaires and pre-testing to avoid future troubles.

2.4.4 Testing of questionnaire / Pilot survey: A preliminary piece of research conducted before a complete survey to test the effectiveness of the research methodology. This should be completed before the final survey commences. The intention is to alert the surveyor to any difficulties that were not anticipated at the survey proposal stage. Pilot surveys are undertaken after pre-tests. A survey, usually on a small scale, carried out prior to the main survey, primarily to gain information to improve the efficiency of the main survey. For example, it may be used to test a questionnaire, to ascertain the time taken by field procedure or to determine the most effective size of sampling unit. The term “exploratory survey” is also used, but in the rather more special circumstance when little is known about the material or domain under inquiry. Pilot survey contains clear, detailed questions on learning, teaching quality, teaching strategy, assessment methods, and workload As a result, survey provides improved measurement of teaching quality, an important factor in the faculty tenure process Provides improved subject teaching and assessment strategy and workload measurements which, in turn, enables instructors to more easily target subject improvements.

2.5 Field work:

Field work is a general descriptive term for the collection of raw data. The term is mainly used in the natural and social sciences studies, such as in biology, ecology, environmental science, geology, geography, geophysics, paleontology, archaeology, anthropology, ethnomusicology, linguistics, and sociology, although it is also used in other subjects, such as in auditing. It is more technically known to scientific methodologists as field research. The interviewing or observation of people to learn their languages, folklore, and social structures constitutes field work. Especially when humans themselves are the subject of study, protocols must be devised to reduce the risk of observer bias and the acquisition of too theoretical or idealized explanations of the actual workings of a culture. Fieldwork emphasizes the integration of academic and hands-on learning. It gives the student an opportunity to apply course work to practical situations. It also allows the student to explore career options, gain valuable skills, and launch a career. Field work enables students to examine the way the theories and the practical experiences of a particular discipline interact. It provides opportunities for observation and participation which are not ordinarily available in class work. Depending on their academic interests, students undertake internships in a variety of organizations and agencies in the local community and other places.

2.6 Data- analysis techniques: Data analysis is a process of gathering, modeling, and transforming data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, in different business, science, and social science domains. Data mining is a particular data analysis technique that focuses on modeling and knowledge discovery for predictive rather than purely descriptive purposes. Business intelligence covers data analysis that relies heavily on aggregation, focusing on business information. In statistical applications, some people divide data analysis into descriptive statistics, exploratory data analysis, and confirmatory data analysis.

The initial data analysis uses descriptive statistics to answer the following four questions: 1. What is the quality of the data? 2. What is the quality of the measurements? 3. Did the implementation of the study fulfill the intentions of the research design? 4. What are the characteristics of the data sample?

2.7 Limitations: Thought the present study aims to achieve the above mentioned objectives in full earnest and accuracy, it may be hampered due to certain limitations, some of the limitations of this study may be summarized as follows, ➢ This study is limited to one private insurance company only. ➢ This study is limited to Indore city only. ➢ And getting accurate responses from the respondents due to their inherent problems. They may be refusing to co-operate. ➢ Respondents may have to be contacted repeatedly or alternate respondent may have to be identified. ➢ For want of time is restricted.

Chapter - III

Data Processing and Analysis

Life Insurance

Insurance vs Assurance The specific uses of the terms "insurance" and "assurance" are sometimes confused. In general, in these jurisdictions "insurance" refers to providing cover for an event that might happen (fire, theft, flood, etc.), while "assurance" is the provision of cover for an event that is certain to happen. "Insurance" is the generally accepted term, however, people using this description are liable to be corrected. In the United States both forms of coverage are called "insurance", principally due to many companies offering both types of policy, and rather than refer to themselves using both insurance and assurance titles, they instead use just one.

Types of life insurance Life insurance may be divided into two basic classes â&#x20AC;&#x201C; temporary and permanent or following subclasses - term, universal, whole life and endowment life insurance. 63

Temporary Term Insurance Term assurance: provides for life insurance coverage for a specified term of years for a specified premium. The policy does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else. There are three key factors to be considered in term insurance: 1. Face amount (protection or death benefit), 2. Premium to be paid (cost to the insured), and 3. Length of coverage (term). Various insurance companies sell term insurance with many different combinations of these three parameters. The face amount can remain constant or decline. The term can be for one or more years. The premium can remain level or increase. A common type of term is called annual renewable term. It is a one year policy but the insurance company guarantees it will issue a policy of equal or lesser amount without regard to the insurability of the insured and with a premium set for the insured's age at that time. Another common type of term insurance is mortgage insurance, which is usually a level premium, declining face value policy. The face amount is intended to equal the amount of the mortgage on the policy ownerâ&#x20AC;&#x2122;s residence so the mortgage will be paid if the insured dies. A policy holder insures his life for a specified term. If he dies before that specified term is up, his estate or named beneficiary receives a payout. If he does not die before the term is up, he receives nothing. In the past these policies would almost always exclude suicide. However, after a number of court judgments against the industry, payouts do occur on death by suicide (presumably except for in the unlikely case that it can be shown that the suicide was just to benefit from the policy). Generally, if an insured person commits suicide within the first two policy years, the insurer will return the premiums paid. However, a death benefit will usually be paid if the suicide occurs after the two year period.

Permanent Life Insurance Permanent life insurance is life insurance that remains in force (in-line) until the policy matures (pays out), unless the owner fails to pay the premium when due (the policy expires OR policies lapse). The policy cannot be canceled by the insurer for any reason except fraud in the application, and 64

that cancellation must occur within a period of time defined by law (usually two years). Permanent insurance builds a cash value that reduces the amount at risk to the insurance company and thus the insurance expense over time. This means that a policy with a million dollar face value can be relatively expensive to a 70 year old. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value.

Life Insurance Products

Riders are modifications to the insurance policy added at the same time the policy is issued. These riders change the basic policy to provide some feature desired by the policy owner. A common rider is accidental death, which used to be commonly referred to as "double indemnity", which pays twice the amount of the policy face value if death results from accidental causes, as if both a full coverage policy and an accidental death policy were in effect on the insured. Another common rider is premium waiver, which waives future premiums if the insured becomes disabled. Joint life: insurance is either a term or permanent policy insuring two or more lives with the proceeds payable on the first death or second death. Survivorship life: is a whole life policy insuring two lives with the proceeds payable on the second (later) death. Single premium whole life: is a policy with only one premium which is payable at the time the policy is issued. 65

Modified whole life: is a whole life policy that charges smaller premiums for a specified period of time after which the premiums increase for the remainder of the policy. Group life insurance: is term insurance covering a group of people, usually employees of a company or members of a union or association. Individual proof of insurability is not normally a consideration in the underwriting. Rather, the underwriter considers the size and turnover of the group, and the financial strength of the group. Contract provisions will attempt to exclude the possibility of adverse selection. Group life insurance often has a provision that a member exiting the group has the right to buy individual insurance coverage. Senior and preneed products: Insurance companies have in recent years developed products to offer to niche markets, most notably targeting the senior market to address needs of an aging population. Many companies offer policies tailored to the needs of senior applicants. These are often low to moderate face value whole life insurance policies, to allow a senior citizen purchasing insurance at an older issue age an opportunity to buy affordable insurance. This may also be marketed as final expense insurance, and an agent or company may suggest that the policy proceeds could be used for end-of-life expenses. Preneed (or prepaid) insurance policies: are whole life policies that, although available at any age, are usually offered to older applicants as well. This type of insurance is designed specifically to cover funeral expenses when the insured person dies. In many cases, the applicant signs a prefunded funeral arrangement with a funeral home at the time the policy is applied for. The death proceeds are then guaranteed to be directed first to the funeral services provider for payment of services rendered. Most contracts dictate that any excess proceeds will go either to the insured's estate or a designated beneficiary. Investment policies With-profits policies: Some policies allow the policyholder to participate in the profits of the insurance company these are with-profits policies. Other policies have no rights to participate in the profits of the company, these are non-profit policies. With-profits policies are used as a form of collective investment to achieve capital growth. Other policies offer a guaranteed return not dependent on the company's underlying investment performance; these are often referred to as without-profit policies which may be construed as a misnomer. 66

Investment Bonds Pensions: Pensions are a form of life assurance. However, whilst basic life assurance, permanent health insurance and non-pensions annuity business includes an amount of mortality or morbidity risk for the insurer, for pensions there is a longevity risk. A pension fund will be built up throughout a person's working life. When the person retires, the pension will become in payment, and at some stage the pensioner will buy an annuity contract, which will guarantee a certain payout each month until death. Annuities An annuity is a contract with an insurance company whereby the insured pays an initial premium or premiums into a tax-deferred account, which pays out a sum at pre-determined intervals. There are two periods: the accumulation (when payments are paid into the account) and the annuitization (when the insurance company pays out). IRS rules restrict how you take money out of an annuity. Distributions may be taxable and/or penalized.

Plans provided by ICICI Prudential Life Insurance Company: Life Insurance Plans Education Insurance Plans • Smart Kid New Unit-linked • Regular Premium • Smart Kid New Unit-linked • Single Premium • Smart Kid Regular Premium Wealth Creation Plans • Wealth Advantage • Life Stage Assure • Life Time Gold • Life Link Super • Life Stage RP 67

Premium Guarantee Plans • Invest Shield Life New • Invest Shield Cash Bank Protection Plans • Pure Protect • Life Guard • Save 'n' Protect • CashBak • Home Assure Retirement Solutions • Life Stage Pension • Life Time Super Pension • Life Link Super Pension • Forever Life Plan • Immediate Annuity Health Coverage Plans • Health Saver • Medi Assure • Hospital Care • Crisis Cover • Cancer Care • Diabetes Care Active • Diabetes Assure ICICI Pru Group Solutions Advantage • Group Super Annuation • Group Gratuity Plan • Annuity Solutions • Group Term Insurance Plan • Group Term Insurance in lieu of EDLI Rural Plans • ICICI Pru Suraksha 68

• ICICI Pru Suraksha Kavach Micro Insurance Plans • ICICI Pru Sarv Jana Plan

Products Offered by ICICI Prudential Life Insurance Endowment Plans ICICI Pru Save n Protect ICICI Pru Assure Invest Money Back Policy Plan ICICI Pru Cashbak (Anticipated Endowment Assurance) Retirement Plans ICICI Pru Forever Life ICICI Pru Reassure ICICI Pru Forever Life (Deferred Pension) ICICI Pru Life Link pension plan ICICI Pru Lifetime Children's Plan ICICI Smart Kid Plan Term Plan Protection Plan ICICI Pru Life Guard Single Premium Life Guard Level Term Assurance with Return of Premium ICICI Pru Life Guard Level Term Assurance Special Plans Invest Shield Life Invest Shield Cash Invest Shield Gold Premier Life Secure Plus Group Plan ICICI Pru Group Term Assurance Policy ICICI Pru Group Gratuity Plan 69

Target Market A target market is the market segment which a particular product is marketed to. It is often defined by age, gender and/or socio-economic grouping. A target market is usually found after segmenting and analyzing the whole market. Target market selection depends on1. Number of competitors in the market 2. The preference/choice of customers 3. Value attached to the product which company wants to convey to the market Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. Target marketing can be the key to a small business’s success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities. While market segmentation can be done in many ways, depending on how you want to slice up the pie, three of the most common types are: • Geographic segmentation – based on location such as home addresses; • Demographic segmentation – based on measurable statistics, such as age or income; • Psychographic segmentation – based on lifestyle preferences, such as being urban dwellers or pet lovers. Two important factors to consider when selecting a target market segment are the attractiveness of the segment and the fit between the segment and the firm's objectives, resources, and capabilities. The focus of marketing effort is people. The goal is to reach a subset of the population who may be interested in your particular product. That group of people is your target market.

Attractiveness of a Market Segment The following are some examples of aspects that should be considered when evaluating the attractiveness of a market segment: • Size of the segment (number of customers and/or number of units) • Growth rate of the segment 70

• Competition in the segment • Brand loyalty of existing customers in the segment • Attainable market share given promotional budget and competitors' expenditures • Required market share to break even • Sales potential for the firm in the segment • Expected profit margins in the segment Market research and analysis is instrumental in obtaining this information. For example, buyer intentions, sales force estimates, test marketing, and statistical demand analysis are useful for determining sales potential. The impact of applicable micro-environmental and macro-environmental variables on the market segment should be considered. Note that larger segments are not necessarily the most profitable to target since they likely will have more competition. It may be more profitable to serve one or more smaller segments that have little competition. On the other hand, if the firm can develop a competitive advantage, for example, via patent protection, it may find it profitable to pursue a larger market segment.

Suitability of Market Segments to the Firm Market segments also should be evaluated according to how they fit the firm's objectives, resources, and capabilities. Some aspects of fit include: • Whether the firm can offer superior value to the customers in the segment • The impact of serving the segment on the firm's image • Access to distribution channels required to serve the segment • The firm's resources vs. capital investment required to serve the segment The better the firm's fit to a market segment, and the more attractive the market segment, the greater the profit potential to the firm.

Target Market Strategies There are several different target-market strategies that may be followed. Targeting strategies usually can be categorized as one of the following: • Single-segment strategy - also known as a concentrated strategy. One market segment (not the entire market) is served with one marketing 71

mix. A single-segment approach often is the strategy of choice for smaller companies with limited resources. • Selective specialization- this is a multiple-segment strategy, also known as a differentiated strategy. Different marketing mixes are offered to different segments. The product itself may or may not be different - in many cases only the promotional message or distribution channels vary. • Product specialization- the firm specializes in a particular product and tailors it to different market segments. • Market specialization- the firm specializes in serving a particular market segment and offers that segment an array of different products. • Full market coverage - the firm attempts to serve the entire market. This coverage can be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment. The following diagrams show examples of the five market selection patterns given three market segments S1, S2, and S3, and three products P1, P2, and P3. Single Segment

Selective Specialization

S1 S2 S3

Product Specialization

S1 S2 S3

Market Specialization

S1 S2 S3

Full Market Coverage

S1 S2 S3

A firm that is seeking to enter a market and grow should first target the most attractive segment that matches its capabilities. Once it gains a foothold, it can expand by pursuing a product specialization strategy, tailoring the product for different segments, or by pursuing a market specialization strategy and offering new products to its existing market segment. Another strategy whose use is increasing is individual marketing, in which the marketing mix is tailored on an individual consumer basis. While in the 72

past impractical, individual marketing is becoming more viable thanks to advances in technology. Examples of target segments that can be created using the above table: â&#x20AC;˘ Women business owners between the ages of 25 and 60 earning more than $25,000 annually form a demographic segment. â&#x20AC;˘ People who drive compact cars due to their fuel efficiency form a benefit segment. Type of Market

Segment Shared Group Characteristics

Demographic Segment Measurable statistics such as age, income, or Occupation. Psychographic Segment Lifestyle preferences such as music lovers or urban dwellers. Use-based Segment

Frequency of usage such as recreational drinking or traveling.

Benefit Segment

Desire to obtain the same product benefits such as luxury, thriftiness, or comfort from food.

Geographic Segment

Location like home address or business address.

Profile of HDFC Life Insurance

Introduction HDFC Standard Life Insurance Company Limited. is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Limited), India's leading housing 73

finance institution and a Group Company of the Standard Life Plc, UK. As on February 28, 2009 HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) 2006, Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others. Our Key Strengths Financial Expertise As a joint venture of leading financial services groups, HDFC Standard Life has the financial expertise required to manage your long-term investments safely and efficiently. Range of Solutions We have a range of individual and group solutions, which can be easily customised to specific needs. Our group solutions have been designed to offer you complete flexibility combined with a low charging structure. Track Record So Far Our gross premium income, for the year ending March 31, 2009 stood at Rs. 5,564.69 crores. As on March 31, 2009, the company has more than 27 lakh polices in force.

Our Parentage HDFC Limited HDFC Limited, Indiaâ&#x20AC;&#x2122;s premier housing finance institution has assisted more than 3.3 million families own a home, since its inception in 1977 across 2400 cities and towns through its network of over 250 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRIâ&#x20AC;&#x2122;s and PIOâ&#x20AC;&#x2122;s to own a home back in India. As of December 2008, the total asset size has crossed more than Rs. 95,000 crores including the mortgage loan assets of more than Rs. 82,800 crores. The corporation has a deposit base of Rs. 17,551 crores, earning the trust of more than 9,00,000 depositors. Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies. 74

Standard Life Group (Standard Life plc and its subsidiaries) The Standard Life Group has been looking after the financial needs of customers for over 180 years. It currently has a customer base of around 7 million people who rely on the company for their insurance, pension, investment, banking and health-care needs. Its investment manager currently administers £125 billion in assets. It is a leading pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of A1 by Moody's. Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was voted a 5 star life and pension’s provider at the Financial Adviser Service Awards for the last 10 years running. The '5 Star' accolade has also been awarded to Standard Life Investments for the last 10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible Mortgage Lender' at the Mortgage Magazine Awards in 2006.

ICICI Prudential vs HDFC Standard India’s top two private-sector banks – ICICI Bank and HDFC Bank – has been trading at a discount to the latter for several years; despite being the larger bank (ICICI Bank is three times as large as HDFC Bank by balance sheet). That’s because investors award higher marks to HDFC Bank for consistently delivering a strong and, more importantly, high-quality performance. In addition, despite being larger, ICICI Bank, in the past, has posted lower net interest margins and higher non-performing assets. Of late, the credit crisis has dealt a blow to ICICI Bank’s operations. While advances – thanks to a higher proportion of retail and unsecured loans – shrank by 3.2 per cent in FY09, gross non-performing assets also climbed to an alarming 4.5 per cent of advances. Net profit growth has also been either flat or negative in the past four quarters; on the other hand, HDFC Bank has grown by more than 30 per cent in the same period. Not surprisingly, ICICI Bank’s stock price has also been less stable than HDFC Bank’s, trading at a price-to-book value of 1.5 times for FY09. HDFC Bank’s stock trades at around 3 times to its FY09 book value. While HDFC will continue to command a premium for the quality of its earnings and consistent performance, the valuation gap between the two banks could narrow a wee bit just for a short while if some positive triggers materialize for ICICI Bank. Currently the value of ICICI Bank’s insurance 75

business at around Rs 100 per share, equivalent to 19 per cent to its fair value. The bank currently holds a 74 per cent stake in its insurance joint venture with Prudential UK. It has said that it might look at a listing or a higher foreign partner stake if investment limits are raised.

Bajaj Allianz Life Insurance Co. Ltd

Bajaj Allianz Life Insurance Co Ltd is a unique joint venture among the global giants Allianz Group (AG) and Bajaj Auto. Allianz AG's world ranking establishes it among the top insurance companies in the world. Bajaj is the biggest two and three wheeler manufacturer in the world. Bajaj Allianz Life Insurance Company boasts of a nationwide presence with 876 offices and over 4 million satisfied customers. The various insurance products include Bajaj Allianz Insurance Online Payment Bajaj Allianz Insurance Policies * Unit Gain Insurances * Term Care Plans 76

* Lifetime Care Insurance Policy * Business Insurance Policies * Savings and Security Policies For You And Your Family * Rural Insurance Plan * Healthcare Insurance * Financial Insurance * Pension Plus * Retirement Plans * Children's Policies * Endowment Plans and many more. Group Insurance Schemes * Insurance For Employee-Employer Groups * Insurance For Non-Employer - Employee Groups * Employees Deposit Linked Insurance * New Group Superannuation Scheme * New Group Gratuity Care Scheme Special Insurance Policies for NRI's * Investgain Endowment Plan * Cashgain Money Back Plan * 路Childgain Kids Special Plan * Swarna Vishranthi Bajaj Allianz India offers convenient premium payment and receipt options. The payments can be direct through cheques, DD's or directly from your accounts or through credit card. The premiums can also be paid online. The insurance policy holders who also have an account with Standard Chartered Bank can avail the direct debit mandate facility. The Bajaj Allianz Life Insurance website offers human life value estimator, child education cost calculator, retirement solutions and required pension estimator and premium calculator online. The Bajaj Allianz insurance agents will guide you about the general life insurance policies best suited to your needs. The insurance agent also briefs you about the insurance quote and the terms on the policy quotes.

Comparison: Insurance Companies

ICICI Prudential

Bajaj Allianz

36%

30%

Product Rating: Customer Service: Claims Settlement: Rates/Premium: Range of Plans: Staff Attitude: Product Recommendation:

ICICI Prudential Life Insurance ICICI Prudential Life Insurance Company is another popular name in the insurance sector of India. Counted as India's No. 1 life insurance company, ICICI Prudential Life Insurance is a collaborative venture between ICICI Bank and Prudential plc. The company wrote about 615,000 policies in the financial year ending on 31st March 2005. The registered offices of ICICI Prudential Life Insurance are located in Delhi and Mumbai.

Bajaj Allianz Bajaj Allianz is a big name in the Insurance industry of India. Born as a result of the collaborative venture of Bajaj Auto and Allianz AG, Bajaj Allianz is involved in general as well as life insurance. Presently, Bajaj

Allianz has offices in more than 550 places. More than 6000 employees serve this company.

Comparison between ICICI Pru & Bajaj Allianz Basis

ICICI Prudential

BAJAJ Allianz

Hospitalization benefits

At least For 2days & max for 90 days per policy year , expense cover range up to 20 lacs

At least for 1day, expense cover range up to 7 lacs

3Dâ&#x20AC;&#x2122;s benefit

Full sum assured is payable in crisis cover plan if death/disability due to an accident

Care first plan also provide the death & disability benefit (if permanent disability occur)

Maturity benefit

Payable in health assure plus plan if no claims made during policy term

Does not provide such benefit

Surgery benefit

Hospital care gives this benefit depending on surgery grade

Max Rs 50,000 per policy year

Critical illness benefit

It covers 35 critical illnesses

It cover 11 critical illnesses

Policy term

Policy term varies from 5-50 years in its different plans

Its each policy term are of 3 years.

Entry age

Min 1 year & max 60 yrs throughout its different plans

Min 18 yrs & max 57 yrs throughout its different plan

Basis

ICICI Prudential

Bajaj Allianz

Special condition plans

It has special plan for diabetes & Cancer.

Such plans are not available here

Hospital networks

4583 hospitals allover India

2000 hospitals allover India

Multiple claim

One can make multiple claim during a policy term but it should not exceed the benefit limit

It also provide multiple claim benefit for various surgical , hospital cash and post hospitalization benefits

Cashless hospitalization

Only in network hospitals

Tax benefit

As per the tax laws under section 80C & 80D

Maximum age of ceasing

80 yrs in hospital care, 75&65 in critical illness plan 70 in all special condition plan

65 in all of the plans

Renewal

In most of the plans Policy term are quite long to cease the maximum age, but wherever needed plan can be renewed

Necessary after 3 yrs to continue the policy to the next 3 yrs

Conclusion: From the point of view of consumers both the companies have mostly common plans with common benefits. But ICICI Pru life has some more advantages over Bajaj Allianz life insurance in the following ways:• • • • •

More specialized plans for special diseases Larger network of hospital Easier Claim. High benefit limit in comparison to Bajaj Allianz. Policyholder can claim for benefit amount from this policy as well as from the other medical Insurance policy. • Policies are available for the child of 1 yr up to 60 yr old person. •

One of the policies of ICICIPru is a health-cum-life insurance plan i.e. Health Assure plus Plan.

Life Insurance Corporation of India (LIC)

The Life Insurance Corporation (LIC) was established about 44 years ago with a view to provide an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly status and became synonymous with life insurance. Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and over six lakh agency force. LIC has hundred divisional offices and has established extensive training facilities at all levels. At the apex, is the Management Development Institute, seven Zonal Training Centers and 35 Sales Training Centers. At the industry level, along with the Government and the GIC, it has helped establish the National Insurance Academy. It presently transacts individual life insurance businesses, group insurance businesses, social security schemes and pensions, grants housing loans through its subsidiary; and markets savings and investment products through its mutual fund. It pays off about Rs 6,000 cr. annually to 5.6 million policyholders.

Objectives of LIC of India â&#x20AC;˘ Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to

• •

• • • • •

reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurancelinked savings adequately attractive. Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return. Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment. Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective.

Current status Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a monopoly of soliciting and selling life insurance in India, created huge surpluses, and contributed around 7 % of India's GDP in 2006. The Corporation, which started its business with around 300 offices, 5.6 million policies and a corpus of INR 459 million (US$ 10 million), has grown to 25000 servicing around 180 million policies and a corpus of over INR 3.4 trillion (US$ 80000 million). The organization now comprises 2048 branches, 109 divisional offices and 8 zonal offices, and employs over 1,002,149 agents. The corporate Office of LIC is in Mumbai. It also operates in 12 other countries, primarily to cater to the needs of Non Resident Indians. With the change in the India's economic philosophy from the early 1990s, and the subsequent relaxation of state control over several sectors of the 83

economy, the monopolistic position of the Life Insurance Corporation of India was diluted, and it has had to compete with a number of other corporate entities, Indian as well as transnational Life Insurance brands. However, it still manages to be the largest player in the Indian market, with the lion's share of 55%. The recent Economic Times Brand Equity Survey rated LIC as the No. 1 Service Brand of the Country. In the financial year 2006-07 Life Insurance Corporation of India's number of policy holders are said to have crossed a whopping 200 million (fourth in terms of population of the countries of the world).

Insurance Products and Services: 1. Insurance Plans include: • Children Plans (such as Jeevan Anurag, Komal Jeevan, CDA Endowment Vesting At 21, Marriage Endowment, CDA Endowment Vesting At 18, Educational Annuity Plan, Jeevan Kishore, and Jeevan Chhaya) • Plans for Handicapped Dependents (such as Jeevan Aadhar,Jeevan Vishwas) • Endowment Assurance Plans [including The Endowment Assurance Policy, The Endowment Assurance Policy-Limited Payment, Jeevan Mitra(Double Cover Endowment Plan), Jeevan Mitra(Triple Cover Endowment Plan), and others] • Plans for High worth Individuals (including Jeevan Shree-I, Jeevan Pramukh) • Money Back Plans (including The Money Back Policy-20 Years, The Money Back Policy-25 Years, Jeevan Surabhi-15 Years, Jeevan Surabhi-20 Years, Jeevan Surabhi-25 Years, Bima Bachat) • Special Money Back Plan for Women (including Jeevan Bharati) • Whole Life Plans (including The Whole Life Policy, The Whole Life Policy- Limited Payment, The Whole Life Policy- Single Premium, Jeevan Anand, Jeevan Tarang) • Term Assurance Plans (including Two Year Temporary Assurance Policy, The Convertible Term Assurance Policy, Anmol Jeevan-I, Amulya Jeevan) • Joint Life Plan (including Jeevan Saathi ) 2. Group Scheme (including Group Term Insurance Schemes, Group Insurance Scheme in Lieu Of EDLI, Group Gratuity Scheme, and others) 84

3. Social Security Scheme including JanaShree Bima Yojana (JBY) Today LIC can boast of great achievements in IT and investment under able Chairmanship of T S Vijayan. After years of poor performance despite near monopoly, LIC started showing performance under G N Bajpai and again went into slip under succeeding chairman till T S Vijayan took over. He faded G N Bajpai into oblivion ably supported by HR initiatives taken by another Genius K B Saha despite serious internal war by MDs. People criticise LIC about large scale miss selling and holes in investment but nobody criticises LIC's superb HR initiatives under sharpest ever HR ED K B Saha and IT initiatives directly under T S Vijayan, the tallest of the Chairmen of LIC.

SWOT ANALYSIS Strengths: a. b. c. d. e. f.

Dedicated Employees. Well Efficient Management. Technology. Diversification of funds. Strong and popular brand name. Adaptability to changes.

Weakness: a. Lack of good services. b. Lack of awareness about insurance among people. c. Less coverage in Rural Areas.

Opportunities: a. Fast growing economy. 85

Increasing per 窶田apita income in India.

c. Saving behavior. d. High growth of ULIP industry.

Threats: a. Arrival of new entrants in the insurance industry. b. Cut throat competition within the industry

Chapter - IV Findings

Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed amount of money on the happening of a certain event.â&#x20AC;? Insurance is a protection against financial loss arising on the happening of an unexpected event. The primary purpose of Life Insurance is the protection of the family. Insurance in its various forms protects against such misfortunes by having the losses of the unfortunate few paid by the contribution of the many that are exposed to the same risk. This is the essence of insurance- the sharing of losses and substitution of certainty for uncertainty. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the insurance companies act as trustees of the amount collected. In is a system by which the losses suffered by a few are spread over many, exposed to similar risks. In its present form, life insurance has its origin in England and made its debut in India in the year 1818.Initially, Indians were not considered on par with Europeans as far as their insurability was concerned. There were also many other failures. It was in the early part of the 20th century that some kind of legislation was made to regulate the industry. From then on life insurance made great strides in the country. On an analysis and evaluation of the data collected from the respondents the following findings were found.

• Before establishment of private concerns the share of LIC was 22% hence there is a wide scope for private concerns to enter in to market. • Total 100 respondents have been approached out of which 75 are the potential respondents who have shown interest for investment and finance plan • Above 20% of respondents are shown interest for investment and financial plan • About 33.33% of respondents are not interest to give their personal records. • About 12.67% of respondents have already been covered by other insurance companies. • About 10% of respondents have given invalid records. • About 10% of respondents are newly employed or trainees. • About 10% of respondents interested for investment plan after knowing ICICI PRUDENTIAL LIFE INSURANCE products.

1. Age of the respondents

PARTICTULARS Less than 25 25 - 35 35 - 45 Above 45 TOTAL

NO.OF.RESPONDEN T 11 40 20 29 100

PERCENTAGE 11% 40% 20% 29% 100

Age of the Respondents NO.OF.RESPONDENT

PERCENTAGE

100 80 60 40 20 0

Less 25 - 35 35 - 45 than 25

Above 45

TOTAL

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d)

11% of the respondents are less than 25 years old. 40% of the respondents are between 25 and 35 years of age. 20% of the respondents are between 35 and 45 years of age. 29% of the respondents are more than 45 years of age.

1. Qualification of the respondents. PARTICUALR

NO.OF.RESPONDEN T 52 29 8 11 100

Graduate Post Graduate Diploma Other discipline TOTAL

PERCENTAGE 52% 29% 8% 11% 100%

Qualification of the Respondents Graduate

Post Graduate

Other discipline

TOTAL

Diploma

100 80 60 40 20 0

PERCENTAGE

NO.OF.RESPONDENT

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d)

52% of the respondents were graduate 29% of the respondents were post graduate 8% of the respondents were diploma 10% of the respondents were other discipline

3) Occupation of the respondents PARTICULARS Business man Professionals Job holders Others TOTAL

NO.OF.RESPONDEN T 34 18 37 11 100

PERCENTAGE 34% 18% 37% 11% 100%

Occupation of the Respondents Business man

Professionals

Others

TOTAL

Job holders

100 80 60 40 20 0

NO.OF.RESPONDENT

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d)

34% of the respondents are businessmen. 18% of the respondents are professionals. 37% of the respondents are job holders. 11% of the respondents are background.

Average annual income of respondents. 91

PARTICULARS Up to 1 lakh 1 lakh - 3 lakh 3 lakh - 5 lakh 5 lakh & above TOTAL

NO.OF.RESPONDENT 33 43 20 4 100

PERCENTAGE 33% 43% 20% 4% 100%

Average annual income of respondents. 100 80 Up to 1 lakh 1 lakh - 3 lakh 3 lakh - 5 lakh 5 lakh & above TOTAL

60 40 20 0 NO.OF.RESPONDENT

ANALYSIS: From the survey it was found that amongst 100 respondents a) 33% of the respondents have an average annual income up to 1 lakh b) 43% of the respondents have an average annual income from 1 lakh to 3 lakh c) 20% of the respondents have an average annual income from 3 lakh to 5 lakh d) 4% of the respondents have an average annual income above 5 lakh

5) Family size of respondents 92

PARTICULARS Below 5 members 5 - 10 members Above 10 members TOTAL

NO.OF.RESPONDENT 50 32 28 100

PERCENTAGE 50% 32% 28% 100%

FAMILY SIZE

28% 50% below 5 members 5- 10 member above 10 member 32%

ANANLYSIS: From the survey it was found that amongst 100 respondents a) 50% of the respondents are below 5 members. b) 32% of the respondents are between 5 to 10 members. c) 28% of the respondents are above 10 members.

6) According to life insurance is. PARTICULARS

NO.OF.RESPONDEN 93

PERCENTAGE

T Risk Coverage Tax Savings Good return Security All the above TOTAL

10 3 4 3 80 100

10% 3% 4% 3% 80%

Life Insurance is Risk Coverage

Tax Savings

Good return

Security

All the above

TOTAL

100 80 60 40 20 0

NO.OF.RESPONDENT

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d) e)

10% of the respondents say risk coverage. 3% of the respondents say tax savings. 4% of the respondents say good returns. 3% of the respondents say financial security. 80% of the respondents say all of the above.

Awareness of ICICI Prudential life insurance

PARTICULARS Yes

NO.OF.RESPONDENT PERCENTAGE 17 17% 94

No TOTAL

83 100

83% 100%

Awareness of ICICI Pru Yes

TOTAL

100 80 60 40 20 0

NO.OF.RESPONDENT

ANALYSIS: From the survey it was found that amongst 100 respondents a) 83% of the respondents say that they are aware of ICICI Prudential life insurance co. b) 17% of the say that they are unaware of ICICI Prudential life insurance co

8) Awareness regarding insurance. PARTICULARS Yes No TOTAL

NO.OF.RESPONDENT PERCENTAGE 2 2% 98 98% 100 100% 95

INSURANCE AWARENESS 100 90 80 70 60 50 40 30 20 10 0

NO.OF.RESPONDENT PERCENTAGE

Yes

TOTAL

ANALYSIS: From the survey it was found that amongst 100 respondents a) 98% of the respondents say that they are aware of insurance. b) Only 2% are unaware of insurance.

9) % of respondents who are under different plans of ICICI Prudential life insurance co. PARTICULARS Invest gain plan Unit gain plan Child gain plan Whole life plan

NO.OF.RESPONDENT PERCENTAGE 41 41% 36 36% 8 8% 15 15% 96

Pension plan TOTAL

1 4 3 8 I Invest C W P 1 6 % 5 N U h e %

No 100

No 100%

gain plan

S in o sliU tR d ie A o N lg n C ia fiE p n le P a L p n lA N a S n

O F I C I C I P R U D E N T I A L ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d) e)

41% of the respondents are under invest gain plan 36% of the respondents are under unit gain plan 97 plan 8% of the respondents are child gain 15% of the respondents are whole life plan No body under pension plan

10)

% of respondents benefits of choosing the particular products

PARTICULARS Risk coverage Additional benefit Maturity date Sum Assured TOTAL

NO.OF.RESPONDENT PERCENTAGE 60 60% 20 20% 12 12% 8 8% 100 100%

Benefits of Particular Products 100 90 80 70 60 50 40 30 20 10 0

Risk coverage Additional benefit Maturity date Sum Assured TOTAL

ANALYSIS: a) 36% of the respondents say that a benefit of choosing the particular Product is for Safety of life. b) 20% of the respondents say that a benefit of choosing the particular products is for additional benefit to family c) 12% of the respondents say that a benefit of choosing the particular products is for maturity date d) 8% of the respondents say that a benefit of choosing the particular products is for sum assured 98

11)

% of disadvantages in insurance plan

PARTICUALRS Liquidity Lapsation Unable to decide premium High risk coverage Fixed Term TOTAL

NO.OF.RESPONDENT 35 20 19

PERCENTAGE 35% 20% 19%

14 12 100

14% 12% 100%

Disadvantages in Insurance Plans 100 80 60 40 20 0

NO.OF.RESPONDENT

Liquidity

Lapsation

Unable to decide premium

High risk coverage

Fixed Term

TOTAL

ANALYSIS: From the survey it was found that amongst 100 respondents a) 35% of the respondents say that disadvantages in insurance plan are liquidity. b) 20% of the respondents say that disadvantages in insurance plan are lapsation. c) 19% of the respondents say that disadvantages in insurance plan is unable decide premium. d) 14% of the respondents say that disadvantages in insurance 99 at high premium. plan are high risk coverage e) 12% of the respondents say that disadvantages in insurance plan is fixed term

12)

% of respondents who want to invest in these different avenues.

PARTICUALRS Recurring Deposit Equity Fund Balanced Fund Mutual Fund Debt Fund Cash Fund TOTAL

NO.OF.RESPONDENT PERCENTAGE 40 40% 25 25% 10 10% 11 11% 5 5% 9 9% 100 100% INVESTMENT AVENUES

11%

40%

R.D Equity Balanced fund Mutual Fund

10%

Debt Fund 25%

Cash Fund

ANALYSIS: From the survey it was found amongst 100 respondents a) b) c) d) e) f)

40% of respondents say that they want to invest in R.D 25% of respondents say that they want to invest in equity 10% of respondents say that they want to invest in balanced fund 11% of respondents say that they want to invest in mutual fund 5% of respondents say that they want to invest in debt market 9% of respondents say that they want to invest in cash 100

What kind of Insurance Plan you look for, one which 1. (a) Allows you to choose insurance at same premium (b) Increase premium as per insurance (c) Increasing premium every year Option

Respons e

Percenta ge

Total

120 Observation- Out of total 120

respondents 63% prefer option A and 30% prefer option B and 8% prefer option C. Findings- Maximum respondents prefer those insurense policies which allows them to choose insurance at the same premium.

2. (a) Allows flexibility in premium payment with minimum payment term (b) Compulsion of paying premium till the term ends

Analysis-

101

Option

Response

Percentage

Observation- Out of total 120 respondents 60% of people prefer option A and 40% of people prefer option B.

Findings- Maximum respondents prefer those insurense policies which Allows flexibility in premium payment with minimum payment term.

3. (a) Allows you to withdraw your investments partially or fully at the time of need (b) Allows you to withdraw only at maturity

Analysis-

Option

Response

Percentage

102

Observation- Out of total 120 respondents 62% of people prefer option A and 38%of people prefer option B.

Findings- Maximum respondents prefer those policies Allows you to withdraw your investments partially or fully at the time of need.

4. (a) Allows you to enjoy returns higher than FD and NSCs still being safe and tax free (b) Allows you to enjoy return at par with FD and NSCs

Analysis-

Option

Response

Percentage

120

100

Observation- 100% respondents prefer option A.

103

Findings- All the respondents prefer those insurance policies which allows to enjoy returns higher than FD and NSCs still being safe and tax free.

5. (a) Allows you to increase or decrease insurance as per need (b) Should never increase or decrease

Analysis-

Option

Response

Percentage

Observation-Out of total 120 respondents 64% people prefer option A and 36% people prefer option B.

Findings- Maximum respondents prefer those insurance policies which Allows to increase or decrease insurance as per their need.

104

6. (a) Should allow you to choose investment strategy as per the need (b) Should be fixed throughout the tenure

Analysis-

Option

Response

Percentage

Observation-Out of total 120 respondents 57% of people prefer option A and 43% people prefer option B.

Findings-Maximum respondents prefer those insurense policies which them to choose investment strategy as per the need.

7. How the bonus should be distributed(a) Periodical (b) On maturity

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AnalysisOption A B

Response 92 28

Percentage 77 23

Observation-Out of total 120 respondents 77% of people prefer option A and 23% of people prefer option B.

Findings- Maximum respondents prefer those insurance policies which distribute bonuses periodically.

8. How would you like premium payment to be made(a) Directly distributed through bank (b) By company agent AnalysisOption A B

Response 82 38

Percentage 68 32

106

Observation-Out of total 120 respondents 68% people prefer option A and 32% of people prefer option B.

Findings-Maximum respondents like their premium payment to be directly distributed through bank. Analysis-

Gen der

age

Total PERCENT AGE

Fami ly Size

41 and 22- 29- abov Fem 3 to 4 to 28 40 e Male ale 4 5 10 5 3 16 2 5 7 55. 27. 16.66 88.8 11.1 27.7 38. 56 78 67 89 1 78 89

age gp 22-28 29-40 41 and above

Inco me grou p 5 and 0abo 1500 ve 00 6 10 33. 33 55.6

1500 003000 00 7 38.88 9

percenta ge 55.56 27.78 16.67

Observation- out of total 18 respondents about 84% of people belong to 22 to 40 age group and only 16% of people belong to age group 41 and above. Findings- maximum people who prefered for the job of financial advisor belong to 22 to 40 age group . gend percent 107

30000 0 onwar ds 1 5.555 6

er age male 88.89 fem ale 11.11

Observation- out of total 18 respondents about 89% people are male and 11% are female. Findings- maximum respondents who prefer to be financial advisor are male. famil percent y size age 3 to 4 27.78 4 to 5 38.89 5 and above 33.33 Observation- out of total respondents 28% respondents have family size 3 to 4 and 39% respondents have family size 4 to 5 and about 33% respondents have family size 5 and above. Findings- family size of more than 4 members mostly prefer the job of financial advisor. percenta income gp ge 0-150000 55.56 150000300000 38.89 300000 onwards 5.56 Observaion- out of total 18 about 56% respondents belong to the income group less than 1.5 lakh and 39 % respondents belong to income group of 1.5 to 3 lakh and remaining 6% belong to the income group above 3 lakh. CROSS ANALYSISTotal no. of respondents = 18 2228

age 29- 41 40 and

Gender Mal Fema e le

Family Size 3 4 to 5 to 5 and 108

Income group 015000 30000 1500 00

Total Percenta ge

10 55.5 6

abo ve 5 3 28

4 16 88. 9

abo 30000 onwar ve 00 0 ds 7 6 10 7 1 33.3 55.55 38.88 5.5555 38.9 3 6 89 6

AnalysisGender

Total PERCENTA GE

Family Size Income group 3 to 4 to 5 and 0150000- 300000 Male Female 4 5 above 150000 300000 onwards 14 1 3 6 6 10 5 0 93.333 6.6666 66.666 33 67 20 40 40 67 33.3333 0 age

TOTAL PERCENTA GE

Family Size

Income group 15000 41 002229and 3 to 4 to 5 and 1500 30000 300000 28 40 above 4 5 above 00 0 onwards 10 4 2 3 7 6 10 5 1 18.7 43.7 62.5 25 12.5 5 5 37.5 62.5 31.25 6.25 age

TOTAL PERCENTA GE

Income group 0150000 41 and Fema 15000 300000 22-28 29-40 above Male le 0 300000 onwards 10 5 3 16 2 10 7 1 55.555 27.777 16.666 88.888 55.555 38.888 5.55555 56 78 67 89 11.11 6 89 6

age Total PERCENTA GE

22-28 29-40 10 5 58.82 29.41 35 17

Gender

Gender Family Size Femal 5 and Male e 3 to 4 4 to 5 above 2 15 2 5 6 6 11.7647 88.23 11.76 29.41 35.294 35.2941 1 52 47 17 12 2

41 and above

109

Finding- Male between the age group 22 to 40 with family size more than 4 and having income between 1.5 lakh to 3 lakh are more likely to be a financial advisor.

Chapter - V

Conclusions

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The financial markets have continued to witness unprecedented liberalization, growth and reforms over the last decade prompted by regulatory compulsions and a rapid integration between domestic and global markets. And as a result, one has seen substantial growth in the number of financial firms (insurance companies, mutual funds, brokerages, banks etc.) and in the number and variety of financial products and services offered by them. As the need of the people is changing so is changing the investment habits of the people and this has brought in a spate of new products and schemes where people can invest. The concept of insurance as an investment option has arrived where people first identify the varying needs of money then converts the needs into specific amount of money and time required to achieve the objective of investments plans. The objective of insurance as an investment is to ensure that investments are driven by pre determined and well thought out investment plan and that the investments are suitable and adequate to meet these plans. But for this the planner must understand the universe of investments options. He/she must be well informed on the risk and return attributes of these options. In addition to the above, companies should also innovate to come up with better products that would suit the Indian population and should also try to market and sell their products through new channels of distribution that can be effective in selling their products to the masses. People should identify 111

their needs and then decide on the type of policy they want to invest in. insurance is a good investment option for those people who do not know where to invest and who do not want to the risk of capital erosion. But, people who are financially savvy can opt for term insurance and invest the rest in other options that may give them higher returns.

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Chapter - VI

Recommendations

113

Since ICICI Prudential Life Insurance co. ltd is the largest in terms of FDI invested, in terms of work force, in terms of market share, in terms of no. of customers. All these positive stands of the company place at the number one position. On second aspect whatever amount of money ICICI Prudential save, can be used to increase the no. of policies, which will helpful to increase the market share of the company. Since the customers think about the companies in the industry, when they invest money in the life insurance industry. So itâ&#x20AC;&#x2122;s necessary to increase the market share of the company. There are some recommendations.

â&#x20AC;˘ Open some more branches in semi urban and rural area. ICICI Prudential has almost its branches in urban area or metros. So in order to increase the no. of customer, ICICI Prudential should increase the approach towards potential customers. For that it has to increase the branches in the semi urban cities like C, D grade cities. And the rural marketing is the best option for ICICI Prudential to increase its base in the market â&#x20AC;˘ Improve customer services. In order to take the advantage of being industry leader in private sector, ICICI Prudential has to improve its customer services. According to my experience in the company, a good number of customers forget to pay their premium at time so it causes a big loss to the company. ICICI Prudential has already collaborated with the 114

ICICI bank for its Bancassurance facility and then can include another feature in it. ICICI bank can offer a bank account with the life insurance policy in which an ATM card will be provided. This card will have all the information regarding the policy as like future premium payment dates, payment made, money value of the policy at that date, value of the unit linked plan and all other information what the customer want. This will help the customer to pay premium on time and save their losses. This will be mutually helpful for both sister companies, ICICI bank will get new account and ICICI prudential will be able to more efficient services to their customers. â&#x20AC;˘ Bring some unit linked life insurance plans in the market. Being a market leader doesnâ&#x20AC;&#x2122;t ensure the leadership in the future. Since after increment in FDI from 26% to 49% all player will have the opportunity to capture the market share. So in order to maintain its position ICICI Prudential should

-Introduce some new market linked insurance plan, which will give a competitive advantage to the ICICI Prudential against its competitors. â&#x20AC;˘ Trained the financial advisors more efficiently. In the changed scenario, more efficient training will be needed, so ICICI Prudential should provide good and efficient training to their financial advisors. Because they are the one who interact directly with the customers. So good training will give them the right way to deal with the potential customers.

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Bibliography

WEBSITES 116

✔

www.iciciprulife.com

✔

www.licindia.com

✔ www.google.com ✔

www.hdfcbank.com

Pamphlets Referred:  BAJAJ ALLIANZ  ICICI BANK  HDFC BANK  LIC, India

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Annexure

118

A QUESTIONNAIRES

ICICI PRUDENTIAL LIFE INSURANCE CO. LTD. Name:Gender:Occupation:Address:-

Age:Marital Status:Income (per annum):119

Contact No.:What kind of Insurance Plan you look for, one which 1. (a) Allows you to choose insurance at same premium (b) Increase premium as per insurance (c) Increasing premium every year 2. (a) Allows flexibility in premium payment with minimum payment term (b) Compulsion of paying premium till the term ends 3. (a) Allows you to withdraw your investments partially or fully at the time of need (b) Allows you to withdraw only at maturity 4. (a) Allows you to enjoy returns higher than FD and NSCs still being safe and tax free (b) Allows you to enjoy return at par with FD and NSCs 5. (a) Allows you to increase or decrease insurance as per need (b) Should never increase or decrease 6. (a) Should allow you to choose investment strategy as per the need (b) Should be fixed throughout the tenure 7. How the bonus should be distributed(a) Periodical (b) On maturity 8. How would you like premium payment to be made(a) Directly distributed through bank (b) By company agent

Problems which you are facing: 120

Suggestions:

Thank You for your co-operationâ&#x20AC;Ś.

Piyush Shrivastava

121