SUMMER TRAINNING REPORT ON ICICI PRODENTIAL LIFE INSURANCE CO.

LTD

SUBMITTED BY VANIYA ASHVIN S. MBA Sem-III GUIDED BY PRAGNESH PATEL ACADEMIC YEAR 2005-2007

SUBMITTED TO JAYSUKHLAL VADHAR INSTUTUTE OF MANAGEMENT STUDIES (JVIMS) BIPIN T. VADHAR COLLEGE OF MANAGEMENT JAMNAGAR

AFFILIATED TO SAURASHTRA UNIVERSITY RAJKOT

DECLARATION

I undersigned Mr. VANIYA ASHVIN S. a student of MBA 3Th semester declare that I have prepared this project report on at ICICI PRUDENTIAL LIFE INSURANCE CO.LTD under Mr ROHIT MEHROTARA. I am also guided by Mr. Pragnesh Patel of JVIMS I also declare that this project report is my own preparation and not copied from anywhere else.

___________ Student's Name Roll No.: 58

VANIYA ASHVIN S.

CONTENTS
Sr. Particulars Page

1 2

4 5

Executive Summary Introduction (a) Company Details (b) Industry Details (d) Competitors Details (e) Regulatory Environment Details Organizational study (a)Marketing Department Details (b)Operation Department Details (b)Financial Department Details (b)Human Resource Department Details Conclusions Bibliography

EXECUTIVE SUMMARY
I have taken training in ICICI Prudential Life Insurance Company. As per my view it is working efficiently. It is speedily going to take first place among the private players. I have been given the work to tap the walk ins and to explain them the various investment plans offered by the company and to bring business for ICICI PRUDENTIAL LIFE INSURANCE CO. LTD. who have to sell insurance policies of ICICI PRUDENTIAL LIFE INSURANCE CO. LTD ICICI Prudential is having financial background from the ICICI Bank. The bank gives totally financial support. Every financial transaction carried out by the effective way so company do not face any problem related with the finance. Generally the wide natural market is helpful in selling the insurance products as they trust us and we can explain them and even guide them about where to invest. According to the survey done it was found that Unit Linked Investment Plans were more preferred by customers as compared to Endowment plans.

INTRODUCTION

What is insurance? First a fall very word insurance is derived from the Latin word for security. A quickly, simple definition of the insurance could be as follows: Reimbursement in the situation of loss. Life insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risks that attach to individuals. Magee Usually, someone decides that insurance is needed. In order for the concept of insurance to arise, a pre-payment of some type is required. In the case of typical, everyday general auto, health, and life insurance, for example, the pre-payment is in the form of a premium. Prior to the eve of the year 2000 thousands of people flocked to the stores, stocking up on numerous supplies. They feared that something catastrophic was going to take place once the clock struck midnight, and if, so, they wanted to be prepared. Isnt this a form of insurance? Sure in its basic definition. The supplies they purchased would act as reimbursement in the case of loss. Need for life insurance Generally, insurance is essential for avoiding risk of life and to arrange for future financial requirement. Insurance gives you the immense security of life and it avoids the unforeseen event of anyones life. And to reduce the risk of robbery, plunder and capture for ransom. Some reasons are here under: - John

Life Insurance Life insurance is a contract of payment of sum of money assured to the person assured (or falling him/her, to the person entitled to receive the same) on the happening of the event, insured against. Usually the insurance contract provides for the payment of an amount on the date of maturity or at the specified dates at periodic intervals or at unfortunate death if it occurs earlier. Obviously, there is a price to be paid for this benefit. Among other things, the contract also provides for the payment of premiums by the assured. Life Insurance is universally acknowledged as a tool to eliminate risk, substitute certainty and ensure timely aid to the family in the unfortunate event of the death of the breadwinner. In other words, it is civilized worlds partial solution to the problems caused by the death. In a nutshell, life insurance helps in two ways: premature death, which leaves dependent families to fend for itself and old age without visible, means of support.

Benefits of Life Insurance:

Superior To Any Other Saving Plan Unlike any other saving plan, a life insurance policy affords full protection against risk of death. In the event of death of a policy holder, the insurance company makes available the full sum assured to the policy holders near and dear ones. In comparison, any other saving plan would amount to the total savings accumulated till date. If the death occurs prematurely, such savings can be much lesser than the sum assured. Evidently, the potential financial loss to the family of the non policyholder is sizable. Encourages And Forces Thrift A saving deposit can easily be withdrawn. The payment of life insurance premiums however is considered sacrosanct and is viewed with the same seriousness as the payment of interest on mortgage. Thus a life insurance policy in effect brings about compulsory savings.

Easy Settlement and Protection Against Creditors A life insurance policy is the only financial instrument the proceeds of which can be protected against the claims of a creditor of the assured by effecting a valid assignment of the policy. Administering The Legacy for Beneficiaries Speculative or unwise expenses can quickly causes the proceeds to be squandered. Several policies have foreseen this possibility and provide for payments over period of years or in a combination of installments and lumsum amounts. Ready Marketability and Suitability for Quick Borrowing A life insurance policy can, after a certain time period (generally three years), be surrendered for a cash value. The policy is also acceptable as a security for a commercial loan, for example a student loan. It is particularly advisable for housing loans when an acceptable ICICI Prudential life policy may also cause the lending institution to give loan at lower interest rates. Disability Benefits Death is not only the hazard that is insured; many policies also include disability benefits. Typically, these provide for waiver of future premiums and payments of monthly installments spread over certain time period. Accidental Death Benefits Many policies can also provide for an extra sum to be paid to the beneficiaries (typically equal to the sum assured) if death occurs as a result of an accident.

Tax Relief Under the Indian Income Tax Act, the following tax relief is available a) 20% of the premium paid can be deducted from total income tax liability subject to rules. b) 100% of the premium paid is deductible from total taxable income subject to rules. When these benefits are factored in. It is found that most policies offer returns that are comparable/ or even better than other saving modes as PPF, NSC etc. Moreover, the cost of insurance is very negligible.

COMPANY DETAILS

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval Authority from Insurance Regulatory (IRDA). Development

For the year ended March 31, 2006, the company garnered Rs 24.12 billion of weighted new business premium and wrote 837,963 policies. The sum assured in force stands at Rs 458.88 billion. The company has a network of over 72,000 advisors; as well as 9 bancassurance partners and over 200 corporate agent and broker tie-ups. It is also the only life insurer in India to be assigned AAA credit rating from Fitch Ratings. For the past five years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

ICICI Bank is India's second-largest bank with total assets of about Rs.1,676.59 bn(US$ 38.5 bn) at March 31, 2005 and profit after tax of Rs. 20.05 bn(US$ 461 mn) for the year ended March 31, 2005 (Rs. 16.37 bn(US$ 376 mn) in fiscal 2004). ICICI Bank has a network of about 573 branches and extension counters and over 2,000 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Canada and Russia, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh and South Africa. ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
At September 20, 2005, ICICI Bank, with free float market capitalization* of about Rs. 400.00 billion (US$ 9.00 billion) ranked third amongst all the companies listed on the Indian stock exchanges.

Prudential Plc Established in 1848, prudential plc is a leading international financial services company in the UK with around US$250 billion funds under management and more than 16 million customers worldwide. Prudential has brought to market an integrated range of financial services products that now includes life insurance. In Asia Prudential is UKs largest life insurance company with a vast network of 22 life and mutual fund operations in twelve countries- China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Phillipines, Singapore, Taiwan, Thailand and Vietnam. Since 1923, Prudential has championed customer centric products and services supported by over 60,000 staff and agents across the region.

Name of the company : - ICICI PRUDENTIAL LIFE INSURANCE CO. LTD Registered Office : - ICICI PRUDENTIAL LIFE INSURANCE CO. LTD 1089 Appasaheb Marathe Marg, Prabha Devi, MUMBAI 400025

The ICICI Prudential Life Insurance Co. Ltd board comprises reputed people from the finance industry both from India and abroad. Mr. K.V.Kamath, Chairman Mr. Mark Norbom Mrs. Lalita D.Gupte Mrs. Kalpana Morparia Mrs. Chanda Kocchar Mr. Kevin Holmgren Mr. M.P.Modi Mr. R Narayanan Ms. Sikha Sharma, Managing Director

Ms. Shikha Sharma, Managing Director Ms. Anita Pai, Chief Operations and Underwriting

Mr. Sandeep Batra, Chief Financial Officer and Company Secretary Mr. Shubhro J. Mitra, Chief Human Resource Mr V Rajgopalan, Appointed Actuary

ICICI and Prudential came together in 1993 to form Prudential ICICI Asset Management Company, which has today emerged as one of the leading mutual funds in India. The two companies bring together two of the strongest financial services brands in Asia, known for their professionalism, excellent quality of service and long term commitment to people. Riding on the success of this relationship the two companies joined hands once more in 2000 to form ICICI Prudential Life Insurance with a commitment to provide leading edge Life insurance solutions. ICICI Bank has 74% stake in the company and Prudential plc has 26%.ICICI Prudential Life Insurance Company, Indias leading private life insurer, has increased its capital base by Rs 50 crore, taking its total paid up equity capital to Rs 675 crore. This is the ninth equity hike since the company was incorporated in December 2000. The two partners ICICI Bank and Prudential Plc, contributed capital in their existing proportions, 74:26 respectively. The authorized capital of the company stands at Rs 1200 crore. The additional capital will be used to meet capital adequacy norms as stipulated by the regulator, to fund the high up front expenses typical to a life insurance business and expansion such as opening new branches. In the life insurance business, a number of expenses are incurred up front but the revenue in the form of premium flows over a 10-15 year time frame. Because of this a life insurer must regularly infuse capital during the first 5-7 years in order to support growth in the business. Typically, the more business a company writes, the greater the capital requirements. ICICI Prudential has grown exponentially over the past 3 years, making its mark in a number of segments such as retirement solutions, child plans and market linked plans. The success of the business has reaffirmed the commitment of both

the partners- ICICI Bank and Prudential plc towards achieving the companys vision of being a leader in life insurance business in India said Ms Shikha Sharma, Managing Director, ICICI Prudential Life Insurance company. ICICI prudential is the leading private sector life insurer in India. In December 03 it crossed the Rs 1000 crore total premium mark the first private life insurer to do so. It has over 5, 50,000 policies and a sum assured in excess of Rs 13000 crore. In line with its strategy to expand distribution the company has grown to 54 locations today.

To make ICICI Prudential the dominant player on trust by world class services.

The company hopes to achieve; 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 policy holders. Providing an enabling environment to foster growth and learning for employees. And above all, building transparency in all dealings.

The success of the company will be founded in its unflinching commitment to 5 core values i.e. Integrity, Customer first, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the Way they work. The companies do believe that they are on the threshold of an exciting new opportunity, where it plays a significant role in redefining and reshaping the sector. Given the quality of the parentage and commitment of the team, there are no limits to their growth.

Introduction Bancassurance in its simplest form is the distribution of insurance products through a banks distribution channels. In concrete terms bancassurance which is also known as Allfinanz- describes a package of financial services that can fulfill both banking and insurance needs at the same time. It takes various forms in various countries depending upon the demography and economic and legislative climate of that country. Demographic profile of the country decides the kind of products bancassurance shall be dealing in with. Economic situation will determine the trend of turn over, market share etc. whereas legislative climate will decide the periphery within the bancassurance has to operate. For bank it is a means of product diversification and a source of additional fee income. Insurance companies see bancassurance as a tool for increasing their market penetration and premium turnover. The customer looks bancassurance as a bonanza in terms of reduced price, high quality product and delivery at door steps. Actually everybody is a winner here. Which distribution model to use is a tactical decision, secondary to more basic strategic concerns? Bancassurance strategies should be driven by market and channels encompass a broad range of tactics and practices and leverage the

competencies of the bank and the insurer. They should identify and build upon a discrete set of values drivers, those factors of such fundamental importance that to ignore anyone of them could be fatal to the success of the project. Brand equity: The strategy should leverage the banks brand equity with consumers. Consumers throughout the world rate bankers higher than insurance agents in terms of such criteria as objectively of advice and product knowledge. A rationalized bancassurance strategy will build on the superior brand equity of banks by integrating insurance into the banks product portfolio and distribution infrastructure. Distribution: The distribution model should accomplish the following objectives 1) It should cater to all segments of the banks customer. 2) It should work as a single shop for all financial requirements for the banks customer. 3) It should effectively utilize the existing branch banking platform 4) It should take advantage of the multiple sales opportunities afforded by the banks other distribution channels. Technology Bancassurance should plan a technological infrastructure that will exploit customer information, found in the banks database to uncover sales opportunities and produce transactional simplicity for insurance customers. Bancassurance should use technology to simplify the insurance purchase as much as possible thereby making the purchase easier, more pleasant experience and further differentiating themselves in the process. Thus bancassurance can be enriched by using proper technology particularly in insurance policy, the buying experience itself is a key part of the purchase. Culture:

An effective Bancassurance strategy acknowledges the fundamental cultural conflict between the bank and the insurance company by aligning the banks with those of the insurance company. In any given situation one of the four value drivers may greatly outweigh the importance of the others, In some cases solving the cultural problem may loom especially large, while in others building technology platforms may be paramount, all four have to be taken in to consideration in case of successful bancassurance

In their natural and traditional roles and with their current skills neither banks nor insurance companies could effectively mount a bancassurance start up alone. Collaboration is the key to making this new channel work. Bank brings a variety of capabilities to table. Most obviously, they own proprietary database that can be tapped for middle market warm leads. In addition they can leverage their name recognition and reputation at both local and regional levels. Strong players also excel at managing multiple distribution channels ,cross selling banking products and using direct mail. However most bank lack experience in several areas critical to successful bancassurance in particular developing insurance product selling through face to face push, channels underwriting and managing long term insurance products Where banks usually fall short a strong insurers well excel, most have substantial product and underwriting experience, strong push channel capabilities and investment management expertise. On the other hand they tend to lack experience or ability in the areas where banks prevail. They have little or no background in managing low cost distribution channel they often lack local and regional name recognition and reputation and they seldom possess access to or experience with the middle market.

Why should banks enter insurance?

There are several reasons why banks should seriously consider bancassurance, the most important of which is increased in return on assets. One of the best way to increase ROA, assuming a constant asset base, is through fee income. Banks that build fee income can cover more of their operating expenses. Sale of personal life insurance products through banks meets an important set of consumer needs. Most large retail banks enjoy a great deal of trust in broad segments of consumers, which they can leverage in selling them personal life insurance products. In addition, banks branch network allows the face to face contact that is so important in the sale of personal insurance. Another advantage banks have over traditional insurance distributors is the lower cost per sales lead, which is possible by their sizable, loyal customers base. Banks also enjoy significant brand awareness within their geographic regions again providing for a lower per lead cost when advertising through print, radio and or television. Bank that makes the most of these advantages are able to penetrate their customers base and markets for above average market share. Other, banks strengths are their marketing and processing capabilities. Banks have extensive experience in marketing. They also have access to multiple communications channels such as statements inserts, direct mail, ATMS, telemarketing etc. Banks proficiency in using technology has resulted in improvements in transactions processing and customer service.

Benefits to insurer Insurers have much to gain from marketing through banks. Personal lines carriers have found it difficult to grow using traditional agency systems because

price competition has driven down margins and increased the compensation demands of successful agents. Over the last decade life agents have sold fewer and large policies to a more upscale client base. Middle income consumers who comprise the bulk of bank customers get little attention from most life agents. By capitalizing on bank relationships, insurers will recapture much of this underserved market. Most insurers that have tried to penetrate middle income markets through alternative channels such as direct mail have not done well. Clearly a change in approach is necessary. As with any initiative, success requires a clear understanding of what must be done, how it will be done and by whom. The place to begin is to segment the strengths that the bank and insurer brings to the business opportunity.

1) Most Trusted Private Life insurer: The Economic Times- A c Survey of Most trusted Brands- 2004

Nielsen

2) Prudence Customer Centricity Award: Prudential Corporation Asia 3) Best life insurer 2003: Outlook Money Awards 2003-04 4) IMM Awards for Excellence: Institute of Marketing and Management 5) Organization with Innovative HR Practices: India Group of Institutes. 6) Super brand 2003-04 7) Organization with Innovative HR Practices; Asia Pacific H R Congress Awards for HR Excellence. 8) Silver Effie for Effectiveness of the Retire from Work not Life advertising campaign Effies 2003 9) Most Trusted Private Life Insurer; The Economic Times AC Nielsen survey of Most Trusted Brands -2003 10) Best New Insurer: Outlook Money Awards 2003 11) Rajkot branch has achieved 9th rank in its business and in the last year. Rs100 lacusiness in the year 2003-04

INDUSTRY DETAIL: There is no end to the challenges that confront an insurer in this increasingly uncertain world. A lot depends on how the prudent insurer looks at the uncertainas a threat or an opportunity? While some insurers and reinsures have been consolidating their basic strengths, profitabilities and so on, others have not been so fortunate. Some sporadic acts of terrorism here; a military conflict there and an environment-related problem elsewhere have all tested the resilience of the insurance industry. Thankfully, insurance has been the winner in the end and rightly so, because the success of insurance is essential for the overall success of the economies, across the globe. Coming to the Indian scenario, the benefits of liberalization and a competitive environment are at last hitting the market. While the leaders in the market are lead by a wide margin, but the boundaries are being redrawn. The style of delivering services are taking new look and adopting a refreshing way to satisfy the customer gives more awareness to the people. There is also a serious need to look at the need base selling and also the type of personnel needed to do the job. Besides, there is also a serious need to impart the right kind of training to the personnel if the tempo is to be sustained. One particular aspect is very hot now a days is government give due attention towards industry which is also feel by budget-related changes. With the FDI cap slated it pumping lots of money into the industry as a whole.

The size of the industry is very big and due to increase in FDI limit there is immense opportunity for the players in the market. The population of India is 2 nd largest in the world which clearly indicates that there is a lack of awareness about the insurance among the people so, there is vast opportunity out there.

There about fourteen players in the industry of life and about ten players in the non life segment. GROWTH IN THE INDUSTRY: The Indian insurance industry is going full steam now, in its new, rejuvenated form. There are several players in each of the classes competing with each other to grab the best share and create a niche for themselves. While the going has been good on the whole, there are some areas that need immediate attention of the forces involved. In a competitive regime, some of these trends are, perhaps, inevitable. The best thing that has happened is the overall freshness that is perceptible as regards the insurance business as also the other things attached to it, like the distribution channels, new styles of service delivery; the genesis of new products on the horizon; and above all, a whole new set of opportunities for employment in the insurance sector. Last year as per the IRDA report there is an increase in the industry by 49% annually. The industry growing rapidly after government opened door for the private players and the permission of FDI up to the limit of 49%, which is very welcome step by the government to support the industry as a whole. There is immense opportunity for the players in the industry to capture the larger market share as the awareness among the people is increases and the importance of insurance concept is gaining favour. There is also an increase in the number of policy sold and the premium income is growing like anything. The market share of the public sector giant has been progressively showing a declining trend due to the private players entry into the industry.

CURRENT SCENARIO AND PROBLEMS:

The four years that we have had of a liberalized insurance domain, present contrasting pictures of growth and consolidation on the other hand, and insufficient understanding and lopsided priorities on the other. Unless the players realign themselves positively, the real purpose for which the industry has been opened up would be hard to realize. While the performance in some areas has been exceptionally good, others need to be addressed by all the players to ensure an overall growth. The market share of the public sector giant has been progressively showing a declining trend and is likely to get stabilized at a certain level, sooner or later. One thing that is very conspicuous in the Indian industry is the strengths that the public sector companies command. This puts the new players in that slightly more disadvantageous position as they have to fight giants. One class that has been making ripples in the industry is health insurance. it is good to see that health insurance, which is just seventeen years old in the Indian domain, has grabbed the third place as regards the total gross domestic premium income. It has overtaken the age-old marine and engineering classes to post an 8% market share. It has grown a healthy 26% during the year 2003-04, while the overall industry grew only by 13%. This should not however be taken as a great leap forward as the class is itself beset with a lot of misgivings on the part of the customer as well as the provider.

PROBLEMS:

Need identification of the customer took a back seat and this, in turn, is largely responsible for the high lapsation ratio.

One issue that is being hotly debated presently is whether we should go for total detarrification or not.

The tendency not to Share information or datas to other insurers in one company as data plays major role in the insurance business.

The lack of understanding of concept of insurance, the insurers would do well to spread the message of insurance in its right earnest so that these adventurous tendencies among the policyholders are arrested.

Insurance is a mechanism to provide protection against the uncertain eventualities and not a means to make a profit out of. In this regard, there is a great responsibility on the part of the insurers themselves; regulators; the academicians; and all those involved either directly or indirectly with the insurance industry; including the policy holders themselves. Unless this is achieved, we cannot look forward to a healthy and vibrant insurance market.

Future Scenario Considering past and present we can say that the insurance industry is in the boom period. Still there is 70% uncovered people who might be potentials for the insurance. It has also provided good employment, as well as has boosted the economy as a whole. Technology has also been updated keeping in pace due t insurance industry. So we can say that the future of insurance industry is quite bright and challenging also. Future of ICICI PRU LIFE INSURANCE CO Ltd is also bright and is going to be appreciated more it has already acquired the no 1 private insurance co from IRDA. Financially as well a managerially the company is performing well. It ha excellent vision and bright future.

At present there are total 14 players in Indian life insurance sector. There is only one player in the government sector and it is the Life Insurance Corporation of India. Rest of the players is in the private. Now lets look at these players and their market share No. Name of the Company Market Share in % 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Life Insurance Corporation (PSU) ICICI Prudential Life Insurance Company Birla Sunlife Insurance Company Bajaj Allianz Life Insurance Company SBI Life Insurance Company HDFC Standard Life Insurance Company Tata AIG Max New York Life Insurance Company Aviva Kotak Mahindra Life Insurance Company ING Vysya AMP Sanmar Met Life Insurance Compnay Guardian Life Insurance Co Ltd. 78.07 6.35 2.45 3.39 1.91 1.92 1.18 0.89 0.76 1.48 0.76 0.36 0.22 0.00

TABLE NO.3

Graph No.2 MARKET SHARE OF PRIVATE LIFE INSURANCE COMPANIES

MARKET SHARE OF PRIVATE LIFE INSU. COM.

2% 3% 9% 0% 5% 7%

11%

4% 29% 5%

9% 1% 15%

TATA AIG BIRLA SUNLIFE ING VYSYA

KOTAK MAHINDRA OLD MUTUAL MAX NEW YORK HDFC STANDARD

MARKET SHARE OF PRIVATE LIFE INSU. COM.

2% 3% 9% 0% 5% 7%

11%

4% 29% 5%

9% 1% 15%

TATA AIG BIRLA SUNLIFE ING VYSYA MET LIFE ICICI PRUDENTIAL AVIVA SAHARA LIFE

KOTAK MAHINDRA OLD MUTUAL MAX NEW YORK HDFC STANDARD BAJAJ ALLIANZ SBI AMP SANMAR

This is depict the market share of these players on diagram Table :2 insurers as on 31-3-2006 Company Foreign Major local Business of local

Allianz Bajaj life AMP Sanmar Birla sun life Dabur CGU

shareholder Allianz AMP Sun life of Canada CGNU

shareholder Bajaj Auto Sanmar Birla finance Dabur

shareholder Auto manufacturer Diversified

conglomerate global Diversified conglomerate Medical consumer products Investment finance Investment finance Bank & investors Diversified &

HDFC life ICICI

standard Standard life Prudential Prudential(UK) ING

HDFC ICICI Vysya bank Max India

& & other

life ING Vysya life Max New

York New York Life MetLife

Life MetLife India

conglomerate Jammu & Kashmir Bank & diversified bank: Pallonji conglomerate Investment & group Kotak Mahindra

OM

Kotak Old Mutual

Mahindra finance SBI Life Cardiff SBI Bank TATA-AIG Life AIG TATA Diversified cong. Source: The Hindu survey of the Indian industry, 2005

LIFE INSURANCE CORPORATION 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 Centres and 35 Sales Training Centres. 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 crore annually to 5.6 million policyholders. BIRLA SUN LIFE INSURANCE Birla Sun Life Insurance Company Limited, a joint venture between Sun Life Assurance Company of Canada and Aditya Birla Management Corporation Limited, recently completed a successful first year of operations. The company emerged as a strong private sector insurance player in the newly opened

insurance market in India with its pioneering efforts in the area of Unit Linked insurance plans. The company sold over 20,000 policies covering more than 33,000 lives in its first year of operations. It achieved an annualised premium income of Rs.350 million with a total sum assured of Rs.16,000 million. The company has more than 2,700 insurance advisors who sell company products across the country. The company offers an array of products in the individual and group life segments. The company established a strong presence in India with 22 branches and two development centers across 17 cities.

ICICI Prudential Life Insurance Company ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups. For the past four years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

Bajaj Allianz Life Insurance Company Bajaj Allianz General Insurance a joint venture non-life company promoted jointly by Bajaj Auto and the German insurer- Allianz. Indian auto major holds 74% while Allainz holds 26% in the Joint Venture, and has an authorized and paid up capital of Rs. 110 crores. Mr. Graham Norris is the CEO of the company. Bajaj Allianz General Insurance will leverage the customer base and expertise of Bajaj Auto Ltd and Allianz AG

Incorporated in September 2000, Bajaj Allianz General Insurance received the certificate of registration from Insurance Regulatory and Development Authority in May 2001. SBI Life Insurance Company SBI Life Insurance Co. Ltd. is a registed Life Insurance Company which has been licenced by Insurance Regulatory and Development Authority of India. It belongs to State Bank of India (SBI) group. State Bank of India has joined hands with Cardif of France to form a Life Insurance Company: SBI - The Largest bank in India Cardif - A wholly owned subsidiary of BNP PARIBAS (one of the top 10 banks in the world), is a leading Insurance Company in France operating in 27 countries all over the world.

Tata AIG Tata AIG Life Insurance Company Ltd. and Tata AIG General Insurance Company Ltd. (collectively "Tata AIG") are joint venture companies, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake

Tata AIG Life Insurance Company Ltd. provides insurance solutions to individuals and corporates. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001. Tata AIG Life offers a broad array of life insurance coverage to both individuals and groups, with various types of add-ons and options available on basic life products to give consumers flexibility and choice The non-life insurance arm, Tata AIG General Insurance Company, which started its operations in India on January 22, 2001 offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines. ING Vysya ING Vysya (a group terminology) has 3 businesses in India, ING Vysya Life Insurance, ING Vysya Bank and ING Vysya Mutual Fund. ING Vysya Bank is a premier private sector bank with a 70-year heritage and 1.5 million satisfied customers. ING Vysya Mutual Fund is a mid sized asset management company with a retail investor focus.

Kotak Mahindra Life Insurance Company Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. At Kotak Life Insurance, we aim to help customers take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent. Jeene Ki Azaadi... AMP Sanmar A Joint venture combining AMP's life Insurance expertise and Sanmar's Indian Business Expertise.

The Life Insurance joint venture company between AMP of Australia and the Sanmar Group of Chennai will create a better future for you and your family, by helping you build and manage your wealth. AMP Sanmar offers a comprehensive range of life insurance Products that will enhance your savings and provide financial security to people who need your support. AMP is a leading international financial services group with over 150 years with core business in Insurance, Asset Management and Financial Planning. The Sanmar Group is a leading industrial group in South India and one of the top corporations in the country that helped pioneer industrialization in India for over six decades. Both AMP and Sanmar are deeply committed to this Life Insurance joint venture and to create a long-term relationship with the customer

Aviva Life Insurance Company India Pvt. Ltd. In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest Group of companies. A professionally managed company, Dabur is the country's leading producer of traditional healthcare products. Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully in India. Currently, Aviva has Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank.

Aviva has 34 Branches (including rural branches) in India supporting its distribution network. Through its Branches and its Bancassurance partner locations, Aviva products are available in 165 towns and cities across India. Aviva has also opened four rural branches in Faridkot, Udaipur, Nasik and Nagpur. Max New York Life Insurance Max New York Life Insurance Company Limited is a joint venture between Max India Limited, a multi-business corporation focusing on life insurance, health care and information technology, and New York Life, a Fortune 100 company with over 150 years of experience in the life insurance business. In 2000, Max New York Life became the first Indo-American insurance joint venture registered and granted a license to conduct business in India. Since that time, Max New York Life has acquired a national presence, establishing a wide

distribution network with 35 offices located across 27 cities in India, which are staffed by over 1,500 employees and over 7,700 highly competent life insurance Agent Advisors. In 2003, Max New York Life became the first life insurance company in India to receive the ISO 9001:9002 certification for its commitment to quality. All of Max New York Lifes offices are supported by state-of-the-art technology designed to enhance its goal of providing excellent service to customers. It has also set up a Centre for Operational Excellence at its head office in Gurgaon, Haryana, just outside of New Delhi.

REGULATORY FRAMEWORK (INSURANCE ACT & IRDA) Insurance Act, 1938 The Insurance Act was enacted in 1938 with a view to control the insurance market in India. The Insurance Act provides major guidelines to insurance companies to do insurance business. The Insurance Act prescribes rules for Assignment or transfer of policies and nominations, commission and rebates and licensing for agents, amalgamation or transfer of insurance business, setting up of the Tariff Advisory Committee, solvency margins, insurance cooperative societies, reinsurance, registration etc.

The Insurance Act, 1938 allows for only Indian Insurance companies registered under the Companies Act, to transact insurance business in India Amendment in 2001 For smooth functioning of the market, certain amendments were made in the Act. The amendments contain entry of insurance co-operative societies, provisions relating to payment of commission and fee for insurance intermediaries, allowing flexibility in the eligibility qualifications for corporate agents., allowing a more flexible mode of payment of premium through credit cards, smart cards, internet, etc.

Insurance Regulatory and Development Authority (IRDA)

The Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the business of insurance and reinsurance in India. The Authority was constituted on April 19, 2000; vide Government of Indias notification No. 277. The Insurance Regulatory and Development Authority Act, 1999, was enacted by Parliament in the fiftieth year of the Republic of India to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business Act, 1972. IRDA was constituted in terms of the

Insurance Regulatory and Development Authority Act, 1999, as the regulator of the Indian Insurance industry. IRDA was setup in 1996 but it was formally constituted as a regulator of the insurance industry in April 2000. The regulator was initially known as the Insurance Regulatory Authority but was subsequently rechristened as Insurance Regulatory and Development Authority as it was provided that it had broader role to perform in the Indian insurance market. It has not only to frame and issue statutory and regulatory stipulations, guidelines, and clarification but it has also to perform a developmental and promotional role. The developmental and promotional role of the regulator include facilitating the growth of the market by attracting large number of players, integrating of the insurance market with the

domestic financial services market, and synchronizing the Indian Insurance market with that of global insurance market. Thus, the objectives of IRDA are two fold: policyholder protection and healthy growth of the insurance market. IRDA has till 2001 issued seventeen regulations in the areas of registration of insurers, their conduct of business, solvency margins, conduct of reinsurance business, licensing, and code of conduct intermediaries. It follows the practice of prior consultation and discussion with various interest groups before issuing regulations and guidelines.

Duties, Powers and Functions of IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA. (1) Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. (2) Without prejudice to the generality of the provisions contained in sub-section

THE POWERS AND FUNCTIONS HAVE THE AUTHORITY SHALL INCLUDE, A. Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; B. Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; C. Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; D. Specifying the code of conduct for surveyors and loss assessors;

E. F.

Promoting efficiency in the conduct of insurance business; Promoting and regulating professional organizations connected with the insurance and re-insurance business;

G. Levying fees and other charges for carrying out the purposes of this Act; Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business;

H. Control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); I. Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other J. Regulating K. Regulating insurance investment of funds of by intermediaries; insurance of companies; solvency;

maintenance

margin

L. Adjudication of disputes between insurers and intermediaries or insurance intermediaries;

M. Supervising

the

functioning

of

the

Tariff

Advisory

Committee;

N. Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f);

O. Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and

P. Exercising such other powers as may be prescribed

SRNO 1 2 3 4 5 6 7

CONTENTS INTRODUCTION ORGANISATION PRODUCT BRAND COMMUNICATION PRODUCT DEVELOPMENT CHANNEL MARKETING DIRECT MARKETING

PAGE

8 9 10 11 12

SALES AND DISTRIBUTION CUSTOMER SERVICE DISTRIBUTION CHANNEL MARKET SHARE NATION WIDE AGENCY NETWORK

Introduction
The Marketing function at ICICI Pru covers an array of activities - brand and media management, channel support, direct marketing and corporate communications. The Brand and Communications team is in charge of advertising, consumer research, media planning & buying and Public Relations; that helps develop and nurture ICICI Prudential's corporate identity while effectively communicating its varied product offerings to the customer. Channel marketing provides support to the sales force by streamlining the design and development of collaterals and sales tools across distribution channels. The Direct marketing team was set up to generate high quality leads for profitable business. The team achieves this through target database acquisition and communicating customized product information through e-mailers, telemarketing and innovative direct mailers. In ICICI Prudential team here is responsible for an array of activities much of its work is shown in TV commercials, press and outdoor hoarding, news article, product brochures, direct mail or on ground activates.

CHART I

TIED AGENCY VICE PRESIDENT REGIONAL MANAGER BRANCH SALES MANAGER

ALTERNATE DISTRIBUTION

COURNTRY HEAD

RELATIONSHIP MANAGER

SALES MANAGER UNIT MANAGER

ASSI SALES MANGER

SALES MANAGER

BANCASSURNCE

CORPORATE AGENCY

FINANCIAL SERVICE

TEAM LEADER

TRAINESS

CUSTOMER SERVICE REPRESENT

The following are the main products of ICICI PRUDENTIAL LIFE INSURNANCE Insurance Solutions for Individuals: ICICI Prudential Life Insurance offers a range of innovative, customers centric products that meet the needs of customers at every life stage. Its 17 products can be enhanced with up to 6 riders to create customized solution for each policy holder. Savings Solutions SecurePlus is a transparent and feature packed savings plan that offers 3 levels of protection. Cash Plus is a transparent featured saving plan that offers 3 levels of protection as well as liquidity options. Save n Protect is a traditional endowment savings plan that offers life protection along with adequate returns. Cash Back is an anticipated endowment policy ideal for meeting milestones expenses like a childs marriage expenses for childs higher education or purchase of an asset. Protection Solutions Life Guard is a protection plan, which offers life cover at very low cost. It is available in 3 options- level term assurance, Level term assurance with return of premium and single premium.

Child Solutions
Smart Kid child plans provide guaranteed educational benefits to a child along with life insurance cover for parent who purchases the policy. The policy is designed to provide money at important milestones in the childs life. Smart Kid child Plan are also available with in unit linked form both single premium and regular premium. Market Linked Solutions Life Link II is a single premium Market Linked Insurance Plan which combines life insurance cover with the opportunity to say invested in the stock market. Life Time II offers customers the flexibility and control to customize the policy to meet the changing needs at different life stages. It offers 3 investment options Growth Plan, Income Plan and Balanced Plan. Retirement Solutions Forever Life is a retirement product targeted at individuals in their thirties. Secure Plus Pension is a flexible pension plan that allows one to select between 3 levels of cover. Market Linked retirement Products Life Time Pension II is a regular premium market linked pension plan Life Link Pension II is a single premium market linked pension plan ICICI Prudential also launched Salaam Zindagi social sector group policy targeted at the economically underprivileged sections of the society. Group Insurance Solutions

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

Group Gratuity Plan; ICICI Prus group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. Employees have the option of choosing from various annuity options or options for a partial commutation of the annuity at the time of the retirement. Group Term Plan : ICICI Prus flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his or her death. Flexible Rider Options ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer. 1) Accident & disability benefit ; If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. 2) Accident benefit : This rider option pays the sum assured under the rider on death due to accident. 3) Critical Illness Benefit: Protects the insured against financial loss in the event of 9 specified critical illness. Benefits are payable to the insured for medical expenses prior to death. 4) Major Surgical Assistance Benefit: Provides financial support in the event of medical emergencies ensuring that benefits are payable to the life assured for medical expenses incurred for surgical procedures.

5) Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till maturity in the event of the death of the life assured. It is available on Smart kid, Secure Plus and Cash Plus. 6) Wavier of Premium: In case of total and permanent disability due to an accident, the premiums are waived till maturity. This rider is available with Secure Plus and Cash Plus. Product Profile (1) ICICI PRU LIFE TIME INSURANCE Suitability This policy is a long-term market linked total protection plan. The plans offer protections for life at the same time allows the policyholder to get market-linked returns. It is a single product combining the benefits of both an investment product and insurance plan. This apart, the product offers a lot of flexibility. Salient Features Death benefit will be a multiple of premium paid. Premium paid will be invested in the fund chosen (Maximiser, Balancer or Protector fund) after deducting mortality charges and administrative expenses. Policyholder has the option to vary the amount of insurance protection vis--vis investment while maintaining the same premium. The returns depend on the plan chosen- growth, balanced and income and one can switch from one fund to another depending on the financial priorities. Once in a year switching is done free of cost. Adding Accident & Disability Benefit, Major Surgical Assistance, can enhance benefits Critical Illness benefits at a nominal extra premium. Entry into the plan will be based on the Unit Value applicable on the date of policy issue. The amount of premium towards death benefit decreases with the increase in the value of the units. One has the flexibility to increase the death benefit by 25% subject to a maximum of Rs.100,000, every third year upto 3 times, without any underwriting. Death benefit can be increased beyond this limit with underwriting. Apart from the above the policyholder can increase the death benefit at different stages of life such as Marriage, birth of first child and birth of second child. This is irrespective of when the last increase was done.

One can decrease the death benefit in the multiple of Rs.100, 000. However a minimum death benefit of Rs.100, 000 has to be maintained.

Policy holder has the option to increase the investment by the way of top ups with a lump sum payment at any time If after at least 3 years premium payments are made and then one is unable to pay the subsequent premiums, the cover under the policy will continue and the premiums towards the life cover and riders will be debited from the unit fund. The returns depend on the plan chosen. Maximiser (Growth) Plan If high growth is people priority this is the plan for it. People can enjoy long-term capital appreciation from a portfolio that is invested primarily in equity and equityrelated securities. Protector (Income) Plan If on the other hand people priority is steady returns, people can opt for the Income Plan. Here people can accumulate a steady income at a low risk across a medium to long term period. Balancer (Balanced) Plan If people prefer a balance of growth and steady returns choose our Balanced Plan. This would ensure that people portfolio is invested in equity and equitylinked securities as well as in fixed income securities Benefits On Death In the event of death of the policyholder, beneficiaries will be paid the higher of death benefit and value of the units. On survival There is no maturity period and policyholder has the option to withdraw units under the plan at anytime after the policy has been in force for three years.

Other Conditions Minimum age at entry: 0 years Maximum age at entry: 60 years (completed years) Minimum premium: Rs.18, 000 per annum Following are the charges applicable under the policy: The initial administrative charges in the 1st year would be 20% of the premium, for the 2nd year premium it is 7.5 % of the premium and for the third year onwards 4 % of the premium amount. Mortality charge towards death benefit Initial charges of 1% on Top-ups One free switch every year after which a switching fee of 1% of the switching amount will be levied. Any unutilized free switch cannot be carried

ICICI Pru Life Time At a glance:

Minimum Premium P.A. Rs. 18000 (Modes Yearly, Half Yearly and Monthly) Rs. 100,000

Minimum death Benefit Maximum death Benefit Maximum age at entry Maximum age at entry Life Protection Band

Rs. 50,00,000 0 Year 60 Years 7 Years to 70 Years else value of units is paid

Lock in period Top up

3 Years After policy issuance minimum 10,000/and in multiple of 500 Partial min. 2500/- worth units max. At least 10,000/- worth of units should remain in all the funds put together Three funds - Maximiser Equity based fund, Protector Debts based fund & Balancer Debt & Equity

Withdrawal

Funds

Switch

1 Free Switch each financial year, more than that 1 % charge on switch Available after 3 years life and rider protection continues, charge deducted from the unit fund. Daily NAV in the newspaper. NAV on single pricing mechanism.

Premium holiday

Remarks

(2) ICICI SMART KID PLAN

As parents, the biggest concern is that of securing the future of child. In today's world, with ever increasing competition, escalating cost of education and uncertain financial markets, it is very important to plan for the child's future. What is Smart Kid? It is a plan that provides guaranteed benefits to the child along with life insurance cover. SmartKid is so designed that it provides money at all the critical milestones in his/her life, whatever be the uncertainties. Who can purchase this policy? Parents (between 20-60 years) with children in the age group of 0-12 years can purchase this policy. They have the flexibility to choose the exact age of the child (between 22 to 25 years), at which the policy is to mature

Imagine that the age of parents is 32 years old and their child is 5 years old and they want the product to mature when he/she is 22 years old. They have option to choose between two structures of payout of benefits. Structure 1:

At the end of Child's Age % Of Sum Assured

Needs met

10th year of policy 15 years (Term-7) 12th year 17 years of policy (Term-5) 15th year 20 years of policy (Term-2) 17th year of 22 years policy (Term)

20% of SA*

Extra tuition, preparation for professional courses, change of school or college. Join a professional college or graduation college.

25% of SA*

25% of SA*

Higher studies graduation

or

post

30% of SA* Further education in India + Guaranteedand abroad. Alternatively, Additions used for marriage or career + Vested Bonus establishment.

Structure 2: At the end Child's of Age % Of Sum Assured Needs met Extra tuition, preparation for professional courses, change of school or college. Join a professional

13 year of policy (Term-4)

th

18 years 25% of SA*

*Sum Assured The plan provides with a guaranteed addition (GA) of 3.5% compounded annually for the first 4 years of the plan and bonuses thereafter (Vested bonuses) applicable as per the performance of the company. Why should one buy SmartKid? Because SmartKid ensures that one has total peace of mind as far as their child's future is concerned. In the event of death of the Life Assured: Sum Assured of the plan is paid immediately - assists the family in meeting the unforeseen expenses incurred because of the unfortunate loss. Waiver of Premium - no future premium are payable, thereby ensuring that your family is not burdened financially. Educational benefits, guaranteed - which means that the future of the child remains secure. Thus, there will be no financial obstacle in realizing the dream which the parent or child had. What are add-on options that one will have with SmartKid? With SmartKid you have the option of taking two add-ons Income Benefit Rider Accident and Disability Benefit Rider Accident Benefit Rider What are the options for premium payment? Mode of payment: Monthly, half-yearly and yearly. (1) Minimum premium: Rs. 8,400/- per year (2) Sum Assured: From Rs.100, 000/- to Rs.3, 000,000/(3) Maximum limit under Income Benefit Rider: Rs.1, 000,000/(4) Maximum limit under Accident and Disability Benefit Rider: Rs.1, 000,000/-

How can one pay his premiums? People can opt for the yearly, half - yearly & monthly mode of premium payment. The monthly mode is only available through ECS (Electronic Clearing Service) What are tax benefits? Tax benefits are available under Sec 88 and Section 10 (10D), as per the prevailing Income Tax laws.

(3) ICICI Pru Lifetime Pension Plan

Plan Details: The Life Time Pension plan provides regular income for life from a date that can be chosen by the insured. The amount one receives will depend upon the premiums paid, the market value of the investment and the option of the annuity chosen. The plan provides the benefit of investing money in market-linked funds. During the deferment period when the premiums are paid a part of the premium is used to pay for the death benefit (if any) opted by the insured and the rest will be invested in the plan chosen by the policyholder. Entry into the plan will be based on the Unit Value applicable on the date of issuance. Minimum premium: Rs 10,000/- per annum for annual mode. Rs 5,000/- per half year for half-yearly mode Eligibility: Minimum: 0 years. Maximum: 60 years. The minimum age of vesting is 50 years. The insured has the flexibility of choosing the vesting age between 50 and 70 years of age. Minimum Term of product: 10 years.

Charges The initial administrative charges in the 1st year would be 18 percent of the premium. In the 2nd year, the charges are 7.5 percent of the premium. From 3rd year onwards 4 percent of premium will go towards charges. Survival benefits: Annuity Benefit: On the date of vesting (retirement), the insured begins to receive a regular income for life. This amount would depend upon the annuity option chosen and the value of units as on the vesting date. The annuity would also depend upon the annuity rates offered by the company as on that date and are not guaranteed. At vesting, the policyholder will have the option of taking upto 25% of the value of units at the time of vesting as lump sum. The remaining will be used to provide with a regular stream of income for life. Death Benefit: In case of unfortunate death, the spouse will get the higher of the death benefit chosen by the insured or the value of units as on that date. The spouse will have the option to either take the higher of the death benefit or the value of units or opt for an annuity. Tax benefits: Tax benefit u/s 80CCC(1):upto Rs10, 000 deducted from taxable income. Flexibility options: Choice of Retirement Date: The insured has the flexibility to start his pension whenever he wants after a stipulated age. Choice of Plans: Option to choose between Growth Plan, Income Plan or Balanced Plan. Growth Plan: This plan offers the benefit of long-term capital appreciation from a portfolio that is primarily invested in equity and equity linked securities.

Income Plan: This plan offers steady returns with a portfolio that primarily invests in debt and debt related securities. Balanced Plan: This plan offers the flexibility of growth and steady returns with the portfolio being invested in a mix of equity and fixed income securities. Increase/Decrease Death Benefit: Option of opting for a zero death benefit so as to make this a pure accumulation product. In case you opt for a death benefit you have the option of increasing or decreasing the cover during the deferment period depending upon your needs. The increase is @ 25% of the original death benefit subject to a maximum of Rs2, 50, 000 upto a maximum of three times. Switch between funds: During the deferment period you can switch between the various plan options to take advantage of the prevailing market conditions or with the change in your priorities. You can do one free switch every year. Top-up of Investments: During the deferment period the insured has the option of increasing his investment with top-ups (minimum amount of Rs 10, 000). Annuity Options: Flexibility to choose from four different annuity options. Life Annuity: Annuity for Life. Life Annuity with Return of Purchase Price: Life Annuity for the annuitant with the return of the purchase price to the beneficiary. Life Annuity Guaranteed for 5, 10, 15 years: Guaranteed Annuity is paid for the chosen term (5/10/15) and after that the annuity continues if at that time annuitant is alive. Joint Life, Last Survivor with Return of Purchase Price: In this case the annuity is first paid to the annuitant, after the death of the annuitant the spouse starts getting a pension which is equal in amount of the annuity paid to the annuitant. After the death of the last survivor the purchase price is returned back to the beneficiary.

Open Market Option: This option gives you the flexibility to buy a pension from any other insurer of your choice, at the time of vesting. So you have the freedom to take the best from the market. What additional features does this plan offer you? For protection to your family against any unfortunate health hazards or eventuality we offer you the following riders with this plan Critical Illness Rider - in this rider, in the event of the life assured contracting a critical illness an additional payment equivalent of the sum assured under the rider would be made. The advantage of this is that it is a standalone rider and the cover is available upto a maximum of 65 years of age. Claims for critical illness is not admitted for the first 6 months of the policy. This benefit is payable on the life assured surviving 28 days from such diagnosis. Major Surgical Rider - this is a cover available against the Major Surgical Procedures. Depending upon the surgery 50%, 30% or 20% of the Sum Assured under the rider is been paid. This provides the cover for the term subject to a maximum of 65 years. Claim for this rider is not admitted for the first 6 months of the policy. Accident and Disability Benefit - on death due to accident the nominee gets additional sum assured under the rider. In case of accident death while travelling by mass surface transport, the nominee will get twice the sum assured under the rider. Accidents can also temporarily impair one's capacity to earn, in such an event of total and permanent disability 10% of the sum assured is paid out every year for 10 years. Also the premiums for the base policy are waived to the extent of the rider cover.

What is your exit option? Your policy acquires a paid up value and surrender value after premiums for 3 full years have been paid. A surrender value equivalent to the value of units would be paid, if you decide to surrender the policy. The Unit Value is calculated bi-weekly on a forward pricing basis.

Unit Value =

Market/Fair value of the Plan's investments +Current Assets-Current Liabilities Number of Units outstanding under the relevant Plan

You have the option of increasing your death benefits beyond the 3 times with underwriting. However any increase in the death benefit after the age of 45 years would be subject to underwriting. Once having decreased the death benefit any increase in the same would be subject to underwriting. Brand and Communication Its been recognized as Indias most trusted private life insurance brand. Its the one private insurance company that 92% of customers are aware of. Its a Super brand. The brand and communication team strives to further this very image of the company and its product amongst consumers. It conducts research, creates ads, and negotiates deals, does ground activites and work with the media to highlight a range of different messages. Product Development The product development of ICICI Prudential team along with the Actuarial product team structures the products uniquely to strike a chord with customers. It then supports the sales of these products through continuous competitor comparison, market in sighting, benefit illustrations, sales stories and on ground help

Channel Marketing The company has its own channel team which supply brochures or the OTC forms, umbrellas or visibility support at the offices with the channel partners. Streaming the creation and deployment across various sales channels and partners, the team drives down costs and orchestrates hi profile product that makes the sales team on. Direct Marketing In case of direct marketing taps databases to generate high quality leads for profitable business, mainly through telemarketing. With the twin engines of infrastructures and online marketing, direct marketing leverages the ever growing digital space. The philosophy is to be interactive, cut through the clutter and inspire action. Customer Service Customer service is one of the most important criteria for any service industry. It is said that customers are God in Indian sayings and in market language they are the king. In case of ICICI Prudential Life insurance the question is who are their customer? Is it the policy holder, advisor, doctor, vendor, corporate agent or colleague in the next cabin? The answer is each person they interact is their customer that is why the vision of the company is to Deliver world class service to all those who come in touch with us then how do the company decide that they are providing the world class services to their customer. The answer to the above question is that the branches, call centre, email are the companys eyes and ears. Through the data they have collected they come to know that what every one is thinking about the company. Further through specific surveys such as annual customer satisfaction survey advisor surveys ad doctor surveys, the company come to know the concerns and expectations of all the customer. Further to make sure that everyone get an glimpse of this vast picture the company also release reports such as the monthly service of MIS and BRE Analysis.

Sales and Distribution In case of ICICI Prudential life insurance Co. Ltd the sales and distribution is as follows. Manager Utilities: In this section the company makes important announcements for mangers, tools like Pre recruitment profiling, manager related initiatives, etc. Advisor Utilities: This section will hold advisor related tools like, electronic benefits illustrations statutory changes that affect advisor etc. Contest: Details of all current contests that are running will be found under this section. Contest Updates and Results: Updates of all contests and results declared will be available under this section.

Distribution
ICICI Prudential has one of the largest distribution networks amongst private life insurers in India, having commenced operations in 54 cities and towns in India. These are: Agra, Ahmedabad, Ajmer, Allahabad, Amritsar, Aurangabad, Bangalore, Bhatinda, Bhopal, Bhubhaneshwar, Chandigarh, Chennai, Coimbatore, Dehradun, Goa, Guntur, Gurgaon, Hyderabad, Hubli, Indore, Jaipur, Jalandhar, Jamnagar, Jamshedpur, Jodhpur, Kanpur, Karnal, Kochi, Kolkata, Kota, Kottayam, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpur, Nasik, Noida, New Delhi, Patiala, Pune, Rajkot, Ranchi, Surat, Thane, Thrissur, Trichy, Trivandrum, Vadodara, Vashi, Vijayawada and Vizag. The company has twelve bancassurance tie-ups, having agreements with ICICI Bank, Allahabad Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, and Punjab & Maharashtra Co-operative Bank, Goa State Cooperative Bank, Indoor Paraspar Sahakari Bank, Manipal State Co-operative Bank, Shamrao Vithal Co-operative Bank and Jalgaon People''s Co-operative Bank, as well as some corporate agents. It has also tied up with organizations like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically underprivileged sections of society.

DISTRIBUTION CHANNELS INSURANCE CO LTD.

OF

ICICI

PRUDENTIAL

LIFE

ICICI prudential has one of the largest distribution networks amongst private life insurance in India, having commenced operation in 58 cities and towns in India. ICICI PRUDENTIAL LIFE INSURANCE is making available its product to the market through all the three channels: TIED AGENCY BANCAASURANCE CORPORATE AGENCY The company has 11 bancassurance tie up as well as some corporate agents. It has also tie up with organization like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically underprivileged sections of society. ICICI Prudential has recruited and trained over 32,000 insurance advisors to interface with an advice customer

Once the right profile is found and he/ she is ready to take up the agency there is fixed process that has to be followed. DOCCUMENTATION:A form has to be filled by the person who intends to take up the agency. He has to submit documents related to age proof, address proof and education proof. TRAINING:Once the form is filled up and necessary documents submitted according to IRDA guidelines the individuals has to undergo a 50 hours IRDA training and next most private insurance companies give another 50 hours training for their particular products. Thus the individual undergoes a total 100 hours or two weeks training which is compulsory. IRDA Exam and License Once the training has been imparted to the individual then to start working as a life insurance advisor he needs as IRDA license which is given upon clearing the IRDA exam taken by IRDA itself. This exam is written as well as online. After clearing the exam person get the license. It is then that individuals becomes a life insurance advisor and can start working. Facility provided by the company There is a 100% management support to an advisor. Advisor can do unlimited phone calls, other peripherals like Xerox machine, fax , computer and printer. Company does not put any restriction for using these peripherals. Company provides broachers, pamphlets and other material free of cost. In starting time of advisor, Unit manager accompany with him and help to get the business and give impart knowledge of marketing. Unit manager is always ready to help advisor.

SEGMENTATION: CHOOSING THE RIGHT PROFILE While the public sector companies are able to attract agent, they continue to suffer from high attrition rates due to indiscriminate agent appointment. The most successful of these companies tied agents are hardly of the elite variety of salesmen. They are still the neighborhood do gooders- the postman, the school teacher and the shop keeper who know the people and are themselves known in the community. The challenge here is lack of knowledge of the competitive market and inability to do intelligent comparisons with the competitors products. Educating and training these agents is a serious challenge for the insurance company. The relevance of this kind of agent continues even today as agent are sought or contacted by families by word of mouth. As far as private life insurers are concerned they take due care in choosing an advisor. The profile of a prospective advisor is very important since these companies believe that long term business and customer satisfaction depends on the advisor. It is preferred that young and energetic person may be appointed as an advisor. But then too young people turn up to be less responsible and do not take the business seriously. But young and highly motivated people are chosen since life insurance marketing is a place where motivation and positive attitude play a major role and lead to success.

PRIVATE LIFE INSURANCE PLAYERS; 13 BIRLA SUN LIFE: Established 3 years back in 2002 Numbers of Unit managers: 21 Distribution Channels: Tied Agency TATA AIG: Distribution channel till date : Corporate Agency Appointed Marwadi as their Corporate Agents. HDFC Standard Life: Established few years back in around December 2003 Distribution Channels: Tied Agency Bancassurance ICICI Prudential Life Insurance: Established since year 2001 Number of Unit Managers 14 Distribution Channels: Tied Agency Bancassurance Within 6 months of establishment from December 2001 ICICI Prudential Life Insurance Company has been able to beat its nearer competitor. Birla Sun life Insurance in terms of profit figures. Thus ICICI Prudential has been able to maintain its overall country ranking No1 Private Life insurer in Rajkot city as well.

Distribution channel in Bancassurance: Traditionally insurance products have been promoted and sold principally through agency system in most countries. With new developments in consumer behaviors, evolution of technology and deregulation, new distribution channels have been developed successfully and rapidly in recent years. Bancassurance makes use of various distribution channels: 1) 2) 3) 4) 5) 6) 7) 8) Career Agents Special Advisors Salaried Agents Bank Employees Corporate Agencies Direct Response Internet Outside Lead Generating Agencies

The main characterstics of each of these channels are; Career Agents: Career Agents are full time commissioned sales personnel holding an agency contract. They are generally considered to be independent contractors. Consequently an insurance company can exercise control only over the activities of agent, which are specified in his contract. Despite this limitation on control career agents, with suitable training, supervision and motivation can be highly productive and cost effective. Level of customer service is very high as various bonuses and awards are paid to them. Special Advisor: Special Advisers are highly trained employees belonging to the insurance partner, who distribute insurance products to the banks corporate clients. Banks refers complex insurance requirements to these advisors. The Client mostly include affluent population who require personalized and high quality service. Usually special advisors are paid on a salary basis and they receive incentive compensation based on their sales. Salaried Agents: Having salaried agents has the advantage of them being fully under the control and supervision of bancassurers .these agents share the mission and objectives of the bancassurers. Salaried Agents in bancassurance are similar to their counterparts in traditional insurance companies and have the same characteristics as career agents. The only difference in terms of their remuneration is that they are paid on a salary basis and career agents receive incentive compensation based on their sales.

Bank employees; They can usually sell simple products. However the time which they can devote to insurance sales is limited e.g. due to limited opening hours and to the need to perform other bank duties. A further restriction on the effectiveness of bank employees in generating insurance business is that they have a limited target market i.e. those customers who actually visit the branch during the opening hours. In many set up the banks financial advisers assist the bank employees. In both cases the bank employee establishes the contact to the client and usually sells the simple product while the more affluent clients are attended by the financial advisers of the bank which are in a position to sell the more complex products. The financial advisers either sell in the branch but some banks also established sales force. Corporate Agencies: Number of banks cooperates with independent agencies or brokerage firms while in Japan banks have founded corporate agencies. The advantage of such arrangements is the availability of specialists needed for complex insurance matters and in the case of brokerage firms the opportunity for the banks clients to receive offers not from one insurance company but also from a variety of companies. Direct Response: In this channel no salesperson visits the customer to induce a sale and no face to face contact between consumer and seller occurs. The consumer purchases products directly from the bancassurers by responding to the companys advertisement, mailing or telephone offers. This channel can be used for simple packaged products, which can be easily understood by the consumer without explanation. Internet: There is now the internet which makes an effective source of information for financial product sales. Banks are well advised to make their new websites as interactive as possible, providing more than mere standard bank data and current rates. Internet banking make the bancassurers feel confident that internet will also provide an effective vehicle for cross selling of insurance savings and protection products. Outside leads; One last method for developing Bancassurance eyes involves outside lead generating techniques such as seminars, direct mail and statement inserts. Seminars in particular can be very effective because in a non threatening atmosphere the insurance counselor can make a presentation to a small group of business people field questions on the topic then collect business cards.

Distribution Models Bancassurers have developed three basic distribution models, Integrative ,Specialist and financial Planning model. Integrative Model: The integrative model distributes products through existing bank channels and in its most well known European version branch bankers themselves sell insurance products to customers. This requires extensive training to branch staff. Bank staff is supposed to know the details of all the insurance products on offer. Telemarketing and direct mail are also examples of integrative approaches. Specialist Model: The specialist model distributes investment or other complex insurance products through product experts who are generally employees or representatives of the insurance company. Bank employees help identify prospects who are then contacted by an insurance professional. Financial Planning Model; This method offers each customer and prospect a full financial planning package addressing all of the individuals financials concerns risk tolerances and location in the cycle of life. This process is beneficial for the customer, the bank and the insurer, as the customer is viewed. Bancassurers convey the message that they want to know all about the customer in relation to their current and future financial and want to assist them all those aspects of their life. To make a bank in the direction of becoming an effective user of the financial planning models, the banks sales force first has to be taught how to qualify prospects and make referrals and properly approach the customer prospect. These bank staff functioning now as financial services representative can provide such sound practical advice i.e an insurance product to fit customer current and future needs. In general, a well trained sales person can always count on certain life triggers birth, death, divorce, career change or other event to lead his regular bank customer to new insurance products. If the bank personnel are shown how to capitalize their triggers using insurance products, they will automatically provide referrals to the insurance

Company Life insurance corporation Private players ICICI pru life insurance co Birla Sun Life HDFC Standard life Others

Market share 93% 7% 39% 14.8% 13.2% 33%

RETAIL MARKET SHARE: PRIVATE PLAYERS 2005-06

40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%
IC IC FC I Pr u Bi Std rla li Su fe n l Ta ife Ba t a A ja I jA G llia nz M SB ax I N Life ew yo rk Av IN G iva Vy sy a AM M et Ps Li Sa fe nm ar

Series1

ICICI PRU HDFC STD. LIFE BIRLA SUN LIFE TATA AIG BAJAJ ALLIANZ SBI LIFE MAX NEWYORK KOTAK LIFE ING VYSYA MET LIFE AMP SANMAR

HD

34.2% 9.1% 12.9% 6.3% 11.3% 2.7% 5.5% 4.9% 6.7% 1.2% 0.7%

Population; 1,055mn Insurance

Life insurance market In-force premiums INR 530b FY*05*new premium INR 156b Total premiums INR 686b

Characteristics Pre 2000- Public monopoly Market deregulated in 2000 ICICI entered in 2000 through joint venture with Prudential Top 5 players Life insurance ICICI Prudential Birla Sun Life Bajaj Allianz HDfC Standard

The company wants to have the rapid expansion of the agency. In the initial years emphasis was on expanding the reach. Now the company is penetrating those cities for increasing market share. The company is focusing on sales and service processes to achieve higher penetration into High Net Worth segment. Locations Branches Advisors March 2003 13 14 10,000 March 2004 25 29 18,000 March 2005 54 70 33,000 March 2006 74 107 56,000

Designated branches of ICICI ICICI Branch Jai hind Branch Manager Mr. Pankaj popat IPru FSc Miss Falguni faldu

Total saurashtra region 53 branches have been designated for bancassurance in Rajkot region. All the representative branch manager and coordinator appointed for ICICI Prudential but Miss Falguni faldu is the only person who is looking after the whole Rajkot region ICICI bank relationship. Secondary data analysis Performance of Bancassurance channel. As channel Bancassurance has generated 30% of business out of total business generated by ICICI prudential Rajkot region in the month of February 2006 Name of Channel Bancassurance Advisors Total % of Business Generated 30 70 100

Treatment given to the prospect by the branch employees in the absence of FSC ICICI Branch Jai hind Branch Manager Mr. Pankaj Popat Treatment given to the prospect Good

This was also found to be positive in most of the cases. Even if the employees of the bank is not aware of the product, he or she will definitely help the prospect to the contact the FSC. Number of ICICI branch employee well acquainted with product knowledge ICICI Branch name Jai hind Facilities provided by the ICICI Branch ICICI Branch name Jai hind Support of the branch manager Phone, counter seat No. Of People 15

Tax Centre Tax Benefits on Insurance and Pension Life insurance and retirement plans are effective ways of saving taxes. The tax benefits that are available under various insurance and pension policies are described below: 1 life insurance plans are eligible for deduction under Sec. 80C. 2 Pension plans are eligible for a deduction under Sec. 80CCC. 3 Health riders are eligible for deduction under Sec. 80D. 4 The proceeds or withdrawals of life insurance policies are exempt under Sec 10(10D), subject to norms prescribed in that section. Tax Rates for Individuals

The rates of income-tax for FY 2005-06 are as follows:

Rate of Tax Total Income (Rs.) Senior Citizen Nil to to Nil Nil Women below years Nil Nil 10% 20% 30% 65 Others Nil 10% 10% 20% 30%

Upto Rs 1,00,000/Above Rs 125,000/Above Rs 150,000/100,000/125,000/-

Above Rs 150,000 to Rs 20% 250,000 Above Rs 2,50,000/30%

The above information is to give a general overview of the current relevant tax laws, and is not and neither intended to be a tax advice. The above information is based on prevailing tax laws and is subject to change with the change in tax laws. Company is not liable to inform change in the above to any person. The above provisions may apply differently as per the specific situation of any person. Income-tax rates and provisions of Section 80C and 80CCE as described above are as per the proposals in the Finance Bill 2005, and have not yet become a law (as of April 21, 2005).

SRNO 1 2 3 4 5 6

CONTENTS INTRODUCTION CAPITAL STRUCTURE FUNDS UNDER MANAGMENT DRIVING PROFITABILITY EXPENSE RATIO CAPITALISATION

PAGE

Introduction Finance function in ICICI Prudential is committed to create an infrastructure that is aligned to shareholder expectations. Finance basically comprises of four functions. . Corporate Planning and MIS provide feedback on business strategies. This includes driving the budgeting process, providing strategic inputs for decision-making and management reporting and analysis. The Accounts function includes preparation and maintenance of financial records, funds management, and expense processing and treasury operations. Compliance ensures that every action is within the regulatory framework. This includes reviewing compliance requirements and supporting the ethical framework of ICICI Pru life. Internal audit provides assurance to the management over the organizations' control framework and includes process risk management, information security assessment and business continuity assessment Financial Data Capital Structure ICICI prudential Life Insurance Cos net worth has touched 1000 Cr following the capital infusion of Rs 100 Cr in the fist week of july 2006 by the share holders. This moves was with view to strength its position as it has been on an aggressive growth path. With this additional capital. ICICI prudential has the largest capital base in the country. ICICI prudential has sold 614000 in 2005-06 policies taking its total policy number since inception to 1 million. During the quarter under review over 80% of policies 04- 05 sold were unit linked plans. The private insurer clocked a premium income of Rs 70 Cr which constituted 27% of last years total premium income, said the compnays managing director and CEO Shikha Sharma. This also reflected a growth rate of 132% over the corresponding quarter in fiscal 2006.

With 50% sales being through unit linked plans, the average premium size has increased from Rs 24000 In the fiscal 2005 ICICI prudential mopped up premium of Rs 1256 crore through the sale of unit linked plans, constituting 77% of its total first year of Rs 348Cr. Funds under Management (RS Bn)
FUNDS UNDER MANAGMENT 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2.00% 2001-02 6.80% 2002-03 2003-04 2004-05 16.60% 38.30% FUNDS UNDER MANAGMENT

Driving Profitability
Driving profitability 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2002-03 2003-04 2004-05 0.70% 2.00% Driving profitability 3.10%

Expense Ratio Expense Ratio

80% 70% 60% 50% 40% 30% 20% 10% 0% 2001-02 2002-03 74% 54%

26% 17%

2003-04 Series1

2004-05

Capitalization ICICI Prudential Life Insurance's new business has grown 77% in '05-06 to cross Rs 1,000 crore, with annualised new business premium of Rs 1,256 crore. The company's total received premium, which includes renewal premium, has crossed Rs 2,363 crore for '05-06.

The company said on Tuesday that it sold 6.14 lakh policies in '05-06. Business figures given out by the Insurance Regulatory and Development Authority (Irda) do not annualise the premium, but give full credit for single-premium policies. If full credit was given for ICICI Pru's single-premium policies, its new business premium would be Rs 1,584 crore. On an annualized basis, ICICI Pru's market share of new business premium works out to nearly 7% of the industry, which includes Life Insurance Corporation (LIC). Announcing the business performance, managing director Shikha Sharma said she expected the life insurance industry to grow at 12% every year. ICICI Pru, which had a paid-up capital of Rs 925 crore, will need more capital during the year because of the prospects for incremental growth. However, the

company has brought down its expense ratio significantly from 26% to 17% in '05-06. This year, 80% of the premium has been generated from unit-linked plans, with nearly 40% of the premium collections going into equity. Indian policyholders have been increasingly opting for unit-linked plans which offer higher exposure to

equities, ever since lower interest rates have forced insurers to cut bonuses on traditional policies. With the resistance towards private insurance companies falling, ICICI Pru's average premium per policy has shot up to Rs 24,000. A significant development has been the sharp rise in group business. The company, which was a latecomer in the group segment, generated 7% of its premium from group insurance, against 1.2% last year. Pension plans have accounted for 41% of premium income. ''It is a choice that is made by the customer,'' said Ms Sharma, commenting on the shift towards Ulips. She said there was no push from the company's side as agent commissions on Ulips were lower than on traditional policies. This year, a significant portion of premium income came from purchase of pension plans ICICI Pru in the News 'Let life insurers into derivatives markets' Business Line May 23, 2006 With the derivatives market becoming active, there is a case for insurance companies to participate in it, according to Ms Shikha Sharma, Managing Director and CEO, ICICI Prudential Life Insurance. ''When the derivatives market were just starting out, it was legitimate not to allow insurance companies to participate because we are large players and the markets could have gone into an illiquid situation. But now the markets are doing well and the volumes are increasing,'' she said in an interview to Business Line. Excerpts follow: What is the impact of rising yields on government securities for insurance companies? Broadly, we are likely to shorten the duration of our assets though our liabilities are long-term. However, for endowment funds, it try to match the duration of assets to that of liabilities.

Does a shorter duration mean higher risk? Shorter duration does not mean higher risk because we are very particular about credit risks. It invest in bonds that are rated AAA. Besides, if they are of a shorter duration, there is less price risk and vice versa. Thus, if it think interest rates are going up and it choose bonds that are of shorter duration to mitigate price risk.

With interest rates falling, it returns are bound to fall. But the equity markets have been doing well; therefore, on a balanced portfolio we continue to get doubledigit returns. It have consistently outperformed BSE 100, the index that it have been using for equities. The good news is that consumers seem to be taking the right decisions. They have been shifting from predominantly debt funds to balanced funds in the last two years. What are the returns people have been getting from each of their funds? On the equity fund, the benchmark is 14.4 per cent and icici Pru return was 17 per cent. On debt, the benchmark was nearly nil and the return was nearly nil, because of the interest rate rise. On the balanced fund, the benchmark was 5.7 per cent and return was 6.7 per cent. Do people think there should be more flexibility in terms of the investment portfolio of insurance companies? The regulator (Insurance Regulatory Development Authority) insists is that the endowment fund and the shareholder's fund should be invested in Government securities. In unit-linked plans (ULIPs), the investment is based on specific brackets; therefore, it gives us a fair degree of flexibility. But the derivatives market is becoming active and there is a case for allowing insurance companies to participate, an option which is currently closed. LIC has been asking for it for quite some time. It originally felt the need to ask for only the swaps. The fringe benefit tax (FBT) on superannuation has come through. What do people think of the budgetary proposals for the insurance sector? At one level, the Government has been saying that it need to encourage pensions since it don't have social security and have to think of ways to reach out pensions to the poor and the middle class. Superannuation is one way that people can build a pension kitty. The company do have other pension products such as provident funds. People have been withdrawing from their provident fund well before they retire, for one reason or the other. Gratuity is also supposed to be a pension product, which when received in a lump sum could be completely spent. Superannuation is the only product that requires the compulsory purchase of an annuity and ensures, therefore, that people have an income stream for life. By taxing it, they are discouraging superannuation contributions. What has been perplexing about the last Budget, is that the sub-limits on the 80 c have been

removed. But for 80 cc, the Finance Ministry has not removed the sub-limit of Rs 10,000. This is surprising because if you want to encourage pensions, then why do you want to keep a sub-limit for pension plans?

IRDA is soon going to come out with guidelines for ULIPs. What do people think about this? There have been a lot of discussions at the industry level on the issue of restrictions on unit- linked policies. If IRDA is talking about restricting ULIPs, which are withdrawn in a short period, then it makes eminent sense. Life insurance premium and long term savings vehicles should not be attracting money for short periods -15 days, a year and so on. For most regular premium plans, a restriction of three to five times of sum assured also makes sense. But in the case of single premium products that are used to top up into a long term insurance policy, there is probably a case of looking of looking at it differently. This is what we have been talking to the regulator about. If the restrictions are thought through well, it should be good for the industry. What percentage of people business comes from bancassurance? What do people think of businesses that are based on the bancassurance model? For the year ended March 2005, bancassurance contributed 18 per cent and corporate agents another 10 per cent. I think bancassurance is an interesting model. But insurance does need face-to-face selling. People expect explanations about what they are buying. They tend to do this with the family. To that extent, the agency is going to play an important role in insurance selling. Our strategy is to have multiple channels to service the customer. Bancassurance is a strategy which banks are using to their advantage. They have the distribution network and some products; insurance can be one more kind of product to cater to customers. Then the insurance company becomes a pure product provider to bank customers. In this case, a bancassurance strategy works. Would your partner Prudential like to hike the stake from 26 per cent to 49 per cent? I am sure it would as and when it is allowed. If it gets delayed and the listing route opens up then, one does not know. If the hike happens this year then I am sure Prudential will increase its stake.

Planning and MIS: The function of MIS reviews current roles and planning evaluate the next goals, monitoring of organization performance , sales quality, trends on a continious basis. With insights into MIS,

socio economic and competitor behavioral patterns, the company contribute to sales target, strategic initiatives ,projected branches , and projected work force . Internal Audit; Risk Management, Business continuity plan, Best Practices, policy manuals are not mere words on paper adhere to them. Internal audit assesses that rules are met. Compliance: Compliance of ICICI Prudential ensure that every action is within the regulatory framewok. CCU : It advises cost trends where it take cares that every rupee is spent economically, prudently, cost effectively Distribution Payouts: It handles sales spends in which it roll out commission payouts, referrals, bonuses, contest spends and effectiveness and basically the sales perks. EPU: It keeps the cost discipline, expenses processing vendor payments, reimbursement, salary products we handle E_ Track Investment operations: The company being the custodian of the investments, benchmark the performance with the best in the industry. It is able to manage the cash flow. Accounting : Financial accounting, expenses provisioning income accruals the company strive on the excellence and transparency of the system and controls to keep the auditors, customers and shareholders assured that the financial story is said right. Driven by sheer professionalism we strive relentlessly towards our organization vision.

SRNO CONTENTS 1 2 3 4 5 6 7 8 9 PERFOMANCE MANAGEMENT TRAINING AND CAPABILITY DEVELOPMENT PROGRAMS HR POLICIES AND PROCEDURES CORPORATE RESOSBILITY RECRUITMENT OF EMPLOYEES AND AGENTS HUMAN RIGHTS EMPLOYEE RELATIONS ENVIROMENTAL POLICY PUBLIC AFFAIRS

PAGE

Performance Management The company is committed to creating a performance driven culture through effective management of performance of all staff members in a way that is mutually beneficial. The company drives the same by linking individual performance objectives and evaluating performance consistently and fairly. Thus by having performance management ICICI Prudential is keeping the performance of their employees under check and ensure that their skills and capabilities also develop. Training and capability development programs The focus of the training and capability development programs is to develop key competence and skills among staff members so as to facilitate attainment of full people potential. The company has many capability development programmes such as fast track, grand slam specifically designed for UMS. FSC and Executive respectively. HR Policies and Procedures The policies and procedures laid down here promote the philosophy of the company with regard to standards of excellence, terms of employment, employee development and employee services. CORPORATE RESPONSIBILITY ICICI PRUDENTIAL Group Code of Business Conduct Each business should operate with policies and procedures which are consistent with the values and the standards set out in the Code and the requirements of the Group Governance manual, details of which can be found on, the Group's intranet. The following standards of conduct apply to all employees and other persons acting on behalf of the Group. In particular, the Group's senior management has a special responsibility to lead according to these standards

All Dealings

Engage in honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. Maintain effective procedures to prevent confidential information being misused and make it clear that the use of confidential information for personal and corporate gain will not be tolerated. Advance the legitimate interests of the Group, having regard to its values and standards, as set out in Code and the Group Governance manual. Comply with all applicable laws, rules and regulations in every country in which they operate. Dealings with Customers Treat customers fairly, openly and honestly Provide high standards of service. Operate effective complaints processes to deal with situations where these standards are challenged. Aim to provide and promote a range of products and services that meet customer needs and are readily understandable. Maintain the confidentiality of customer information, save where the law requires or permits disclosure, or the customer has given prior written consent. Dealings with shareholders, the companies in which it invest and the public Maximise shareholder value over time, recognising that wealth generated also benefits customers and employees as well as the communities within which it operate. Provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Group publicly releases and/or files or submits to appropriate authorities and comply with all laws and regulations.

Dealings with Employees Maintain a working environment that provides appropriate remuneration including benefits, training and opportunities for personal development. Be intolerant of discrimination, harassment or victimisation. Recognise diversity in recruitment and dealings with employees. Create a favourable employee relations environment in which the involvement of all employees is encouraged. Support employees who become aware of, and are willing to report business malpractice and establish procedures to enable people who genuinely believe that malpractice is occurring, has occurred or is likely to occur within the business to raise issues internally without fear or discrimination. Provide a clean, healthy and safe work environment, stressing the obligation on all employees to take every reasonable precaution to avoid injury to colleagues and members of the public. Provide a clean, healthy and safe work environment, stressing the obligation on all employees to take every reasonable precaution to avoid injury to colleagues and members of the public.

Ensure that it conduct it activities, so far as possible, in a manner sensitive to the cultural and social traditions of communities with which it come into contact.
Dealings with suppliers of goods and services Maintain the highest possible standards of integrity in business relationships with suppliers.

Encourage the use of those suppliers who operate with values and standards equivalent to it. Agree terms of payment when orders for goods and services are placed and pay in accordance with those terms.

Dealings with communities

Contribute to the social and economic well being of those communities where the company is an employer.
Human Rights Human Rights Policy is implemented by incorporating these principles into its Group Code of Conduct which sets the minimum As an international provider of financial services, operating in diverse markets and cultures, Prudential recognizes its obligations to supporting Human Rights as a consequence of its principles of acting responsibly and with integrity. This Policy outlines Prudential's approach. Prudential is committed to ensuring protection and respect for fundamental Human Rights in all its activities. It strongly endorse the principles set out in the Universal Declaration of Human Rights, in particular those relevant to the operations which are:

The right to freedom from discrimination; The right to personal safety and security; The prohibition of slavery: forced or child labour; The prohibition of torture, cruel, inhuman or degrading treatment or punishment; The right to privacy; The right to religious freedom; The right to freedom of opinion and expression; The right to freedom of peaceful assembly and association; The right to free participation in political life; The right to work; The right to rest and leisure; The right to an adequate standard of living; The right to education; The right of minorities and indigenous peoples to protect their identity; The right to cultural participation.

Standards to which its operating companies must adhere, in respect of their interactions with

Customers, Employees, Suppliers, Communities, Shareholders, the Public, Companies in which it invest, Competitors, Governments and Regulators and all its dealings. Guidance for managers will be produced in support of this policy and as it relates to its Group Code of Conduct. Companies within the Prudential Group are responsible for developing suitable policies to implement the Group Code of Conduct appropriate to their local markets and cultures. Compliance with the Group Code of Conduct is assessed through periodic audit carried out by Group Head Office Internal Audit. Issues arising from this Human Rights Policy, the Group Code of Conduct and supporting policies will be handled through normal line management arrangements, as will any target setting and reporting of performance. CICI PRUDENTIAL LIFE INSURANCE EMPLOYEE RELATIONS Business Units should seek to have a strong and direct relationship with employees and where there is collective representation the aim should be to achieve positive relationships that support the achievement of the business goals. Businesses must ensure compliance with the statutory and regulatory requirements of the labour markets within which they operate. It is essential that businesses seek to maintain a positive reputation relating to the treatment of employees. Overall trends relating to employee involvement, staff consultation and where relevant union recognition policies and practices should be reported to group annually. The status of any significant outstanding HR issues which are likely to impact either positively or negatively on the Group's reputation as an employer should be reported directly to the Group HR Director immediately. ICICI PRUDENTIAL LIFE INSURANCE ENVIRONMENT POLICY Prudential recognizes that, through day-to-day business activities and the investments made on behalf of customers, it have an impact on the environment. It committed to minimizing that impact and preventing pollution and unnecessary damage to the environment from its operations. Through the environmental programme, It is working to integrate environmental management into all the core business activities, financial products and services. This will cover medium and long-term savings, life

assurance, banking and investment management. Prudential is a signatory of the UN Environment Programme for Financial Institutions on the Environment and Sustainable Development. As such it will endeavour to ensure its policies and business actions promote the consideration of the environment, sustainable development and compliance with all relevant environmental legislation and regulations. It will strive to:

Continuously improve the environmental performance; Use energy and water efficiently; Reduce consumption of materials, through re-use rather than disposal wherever possible; Promote recycling; Develop policies and practices which raise awareness and encourage and enable its staff to make a contribution to achieving environmental improvement; Encourage the suppliers to minimise the impact of their operations on the environment through the procurement polices and practices; Take account of environmental considerations as part of the investment process; Apply the principles of best environmental practice in the planning, development, refurbishment and decommissioning of our buildings; Develop environmental considerations into Product Development and Stewardship.

Prudential has developed environmental objectives and targets through which the efforts towards achieving environmental improvement can be measured and will continue to monitor and review the environmental performance and policies. The company will report publicly on an annual basis to demonstrate developing progress in improving the environmental performance.

Recruitment of employee in ICICI PUDENTIAL Life Insurance Be An Employee

ICICI Pru offers exciting career opportunities for people from a variety of streams. Distribution Customer Service & Operations IT Marketing Finance HR Business Excellence People can apply for jobs at ICICI Prudential Life Insurance through the recruitment section. Distribution Tied Agency Tied Agency is the largest distribution channel of ICICI Prudential, comprising a large advisor force that targets various customer segments. The strength of tied agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, tied agency has emerged as a robust, predictable and sustainable business model. Banc assurance and Alliances ICICI Prudential was a pioneer in offering life insurance solutions through banks and alliances. Within a short span of two years, and with nearly a large number of partners, B & A has emerged as a vital component of the companys sales and distribution strategy, contributing to approximately one third of companys total business. The business philosophy at B&A is to leverage distribution synergies with the partners and add value to its customers as well as the partners. Flexibility, adaptation and experimenting with new ideas are the hallmarks of this channel.

Customer

Service

&

Operations

The Operations department oils the work processes between the customer and the company to ensure consistent and quality service to the customer. To streamline the operations, the Operations department interfaces between the clients and the agents, the branches and the underwriters, and manages work processes. The Vision at Customer Service is to deliver World Class Service at every opportunity. Units such as the 9 to 9 contact centre, Outbound Call Centre, Customer Care and Query Resolution Unit are all committed to providing effective solutions to over lakhs of customers across the country. IT The Information Technology function at ICICI Prudential is committed to enable business through the use of technology. It is segmented into 4 groups to enable highest levels of delivery to the customers: Life Asia Solutions Group that provides flexibility in designing better product offerings to end-users, the Solutions Group- Web that provides real-time information to customers and is responsible for customer relationship management, IT Architecture and Corporate Solutions Group is in charge of developing and maintaining a blueprint for the IT architecture for the enterprise as a whole. This team works as an in house R&D Solution Group, exploring new technological initiatives and also caters to information needs of corporate functions in the organization. IT Infrastructure group is responsible for providing hardware, software, network services to the whole organization. This group runs the 'Digital Nervous System' of the Enterprise at the highest levels of efficiency and provide robust, scalable and highly available platform for deployment of business application. Marketing The Marketing function at ICICI Pru covers an array of activities - brand and media management, channel support, direct marketing and corporate communications. The Brand and Communications team is in charge of advertising, consumer research, media planning & buying and Public Relations; that helps develop and nurture ICICI Prudential's corporate identity while effectively communicating its varied product offerings to the customer. Channel marketing provides support to the sales force by streamlining the design and development of collaterals and sales tools across distribution channels. The Direct marketing team was set up to generate high quality leads for profitable business. The team achieves this through target database acquisition asnd communicating customized. product information through e-mailers, telemarketing and innovative direct mailers.

Finance Finance function in ICICI Prudential is committed to create an infrastructure that is aligned to shareholder expectations. Finance basically comprises of four functions. . Corporate Planning and MIS provide feedback on business strategies. This includes driving the budgeting process, providing strategic inputs for decision-making and management reporting and analysis. The Accounts function includes preparation and maintenance of financial records, funds management, and expense processing and treasury operations. Compliance ensures that every action is within the regulatory framework. This includes reviewing compliance requirements and supporting the ethical framework of ICICI Pru life. Internal audit provides assurance to the management over the organizations' control framework and includes process risk management, information security assessment and business continuity assessment. HR The people strategy of ICICI Prudential is To build a committed team with a culture of innovation, learning and growth. The Human Resource Function at ICICI Prudential drives the people strategy of the business. With its initial focus on operational excellence to deliver benefits and services to staff members, HR is now committed to building capability through state of the art processes. A proper performance management system, compensation system and a segmented training architecture enable it to deliver value to the organization. Business Excellence

The Business Excellence function is committed to building a quality mindset across the organization. ICICI Prudential is the first organization in the Insurance Industry that has adopted the Six Sigma Methodology for process efficiency and measurement.

Group Public Affairs The role of Group Public Affairs is to coordinate all international relations between the Group and Governments and to participate in the development of all legislation of interest to the Group. Additionally, it strategically places the group as a principal point of call and source of expertise for politicians and officials seeking views on financial and social reform issues in each market in which we operate. RECRUITMENT OF ADVISOR Be an Advisor Being an ICICI Prudential advisor can be an enriching and exciting career option. Its an opportunity to associate with an industry leader, be in touch with the latest and finest insurance practices from around the globe, and grow both personally and professionally. Here are some of the benefits of being an ICICI Prudential Life Insurance Advisor : Unlimited earning potential. A clear career path. All round support through exclusive advertising, advisor own in-house consultant, and world-class training. A comprehensive benefit package What does it take to be an ICICI Prudential advisor? Training Careers Rewards & Recognition

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At ICICI Prudential, it believe that the Advisors are the ambassadors to the customers. They are a key source of business for the organization, and are the continuing link with the clients. That is why, it take a lot of care in recruiting and developing the advisor force, so that it continue to set higher standards of quality in service and salesmanship. To cater to the needs of the knowledge-oriented marketplace, it looks for graduates who are serviceoriented, good communicators and enjoy meeting new people. Prior sales experience is an added benefit. Some of the qualities it seek are: Self-motivation A master communicator A go-getter A graduate

Training At ICICI Prudential, it understands the importance of training in a dynamic business environment. The advisors go through both generic and specific, professional programs that help them remain well-informed and knowledgeable about the companys products in the market. There is a further focus on soft skills such as communication, managing long-term relationships and selling skills, which are very relevant in a service-driven industry like life insurance. State of the art infrastructure training facilities coupled with an excellent faculty, guarantee an exceptional learning environment. For advisors who might be occupied with their daily business/professional routines, ICICI Prudential also offers convenient training options such as online and self-learning are also provided by the organization. A 17-day training schedule covers the mandatory IRDA training requirements and ICICI Prudential product-training module. Revision session ensure that the candidates thoroughly understand the course contents and are well prepared for the licensing examination. Theoretical training is interspersed with practical appointment settings with potential customers, giving advisors a feel of how their business will work from the very first day. All through, the Unit Manager and the management provide continuous support to the advisors in achieving independence towards garnering business.

Career

At ICICI Prudential, career development is emphasized upon from the very day the advisor joins the system. Though individual meetings with his or her manager, the advisor can discuss various issues related to business development and career enhancement. Expectations from the organization in terms of chalking a career in the insurance industry are also discussed. Tiger Team: ICICI Prudential offers the Tiger Team programme for identified high potential advisors. Hand picked by the management, these advisors are placed on a fast-track career path and recognized as Tiger trainers. The advisors can participate in this programme, subject to certain criteria being fulfilled. Pinnacle Program: Absorption into the management is another career enhancement option provided at ICICI Prudential through the Pinnacle Program. This program helps advisors build a full time career as a unit manager in the organization, offering great potential for managing a team of advisors and personal development. Fast track Pinnacle programme is also available to advisors who are able to meet the performance criteria within the stipulated time. Rewards and Recognition ICICI Prudential advisors are constantly recognized and rewarded for their performance. Numerous contests all year round promote healthy competition amongst advisors and recognition for their efforts. Depending on the level of business the advisor achieves in a year, he or she can become a member of various clubs such as the Presidents club, ICICI Pru Star International and the ICICI Pru Star India club. Each of these clubs have specific performance criteria for qualification and members of these clubs are entitled to attend seminars held at exotic international and domestic locations each year. Advisors can also qualify for the renowned MDRT (Million Dollar Round Table), an exclusive international insurance advisors club.

CONCLUSION
Life insurance policies are usually of a long term nature and therefore the service aspect is very important. Proper service is likely to see that policies do not lapse and in turn the agents get their renewal commission regularly and also will be able to procure new business easily. The new companies that have come into the industry are recruiting new agents and getting them trained. Some companies have designated them as advisors, consultants and such other nice titles. Recruitment of new agents has to be done according to the guidelines prescribed by the IRDA and the companys policy in this regard. But the following points may be noted. Though life insurance agency is an attractive and rewarding profession it is not always easy to recruit the right type of agents because people still feel that it is a job in which you have to go after people begging them for policies. As a result Sales managers whose job is to recruit (Some companies call them Unit Managers, Agency Managers, Sales Team Managers and so on) may be tempted to persuade unwilling or unsuitable persons to join, assuring them of an easy time during the training period. While the difficulties of the Managers are appreciated still it would be better for them to be careful in selection the candidates because there is likely to be heavy drop out if many unsuitable and unwilling candidates are persuaded to join. Ultimately this will mean more cost to the company. Moreover, it may please be noted that an agent who is a drop out or who fails is the biggest problem while canvassing insurance to prospects.

It would be better to emphasize the importance of the right type of attitude and also the necessity of regular training and then to highlight the benefits that are going to accrue in the career rather than playing down the rigor of training in order to somehow attract people as recruits for the course. In their anxiety to recruit people and fulfill the targets some sales managers have sometimes underplayed the importance of the extent of asking their agents to just show their face, and then go away. It has been seen that sometimes totally unsuitable persons have been persuaded to join. Most of such people leave the training midstream. It is true that training can bring about change in people, but there is a limit to such change. There should be a basic aptitude and desire for change. An important point to remember is that insurance salesmanship requires more of personality traits than mere theoretical knowledge of insurance. Therefore managers should think well before selecting their advisors. It is noticed that sometimes full time students or full time employees are recruited. These people somehow attend a few classes here and there and are absent most of the time. Would it not be better to apprise such persons about proper attendance so that they can take leave or make suitable arrangements? An important point to be noticed in this connection is that many employed persons are coming for training without having taken permission from their employers. This type of acceptance of other activities may be objected to by the employers. The managers should take care of such possibilities. It is better for the candidates to take their employers into confidence rather than get into unpleasantness later when the employer comes to know.

BIBLIOGRAPHY WWW.INDIAINFOLINE WWW.ICICIPRULIFE.COM WWW.IRDAINDIA.ORG WWW.LICINDIA.COM