ACKNOWLEDGEMENT

It is a matter of great explanation and ecstasy for me to present my research project report the topic Comparative Marketing Strategies of Life Insurance Corporation & ICICI Prudential. I offer my sincere gratitude to every one involves directly and indirectly for his help and guidelines through out the project I am especially thankful to my project guide Mr. Avijeet Dey, GNITMS, Greater Noida, who had given me opportunity to complete project. My project has been influenced by number of standards and popular text books. I express my gratitude to the respective author.

(Archit Srivastava)

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PREFACE
Man has found out himself many things to make himself and his near dear ones happy. Insurance is one such invention of man. Insurance is a many splendid thing. It is not just the reluctant entry and the periodical reminders for paying the premium and the last receipt of the claim money which may look large or a mere pittance depending upon whether the policy was in force earning handsome bonus or had been languishing in a state of suspended animation. insurance is a wonderful world of mortality rates, utmost good faith, medical examinations with ECG and treadmill exercises, bonuses and no claim discounts and a host of other science and arts which the insurance people learn in order to provide what they call financial security and peace of mind which no other invention of man can match. Indian older population may double in 20 years and economic development and widespread migration of young adults are disrupting the traditional support for older people but ironically economy is not growing in the same folds. These changes are alarming, as alternative ways of investing the pension funds for meeting the requirements of old age people are not yet evolving. The main objective of pension is to ensure that entire working population has secured an adequate income during his /her retired life and thereafter for the lifetime of the espouse/dependents.

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It is a universal truth that people do not willingly accept and adopt the good things of life. Through the universal advantage of insurance are self-evident to a prudent person. Still a great deal of persuasion, explanation and at times pressurization is necessary to make customer centric and this is the matter being translated by new companies. The following research work takes a look on such persuasion of the insurance companies and the way they deal with people regarding the support of life in old age- The Pension Plans.

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INDEX
Sl.no. Topics Institutes certificate Companys certificate Acknowledgement Preface 1 Introduction About the topic Objective of the study Methods employed Significance of the study 2 Industry Profile 3 Company Profile 4 Financial analysis of the company 5 Data analysis 6 Interpretation of data 7 Findings 8 Conclusion 9 Suggestion 10 Limitation of the study 11 Appendices 1. 2. 3. 4. 5. Questionnaires Sample information Final statement of the company Quality Model Organizational Structure Page 4 Page Number From To

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12 Bibliography

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INTRODUCTION
Insurance is a RS. 400 billion business in India and yet its spread in the country is relatively thin insurance as a concept has not been able to make headway in India. Until recently L.I.C. Enjoyed a monopoly in life insurance business. decide the insurer. A successful passage of I.R.A. bill had cleared the way of private sector operators in collaboration with their overseas partner. It is more professional and focused approach. Moreover the foreign players would bring sophisticated actuarial techniques with them, which would facilitate the insurer to effectively price the product. In this new millennium all these activities would play a crucial role in over all development and maturity of insurance industry. Insurance business is growing in India. Even before the advent of the insurance development regulatory authority and privatization on the insurance sector, insurance was a lucrative business in India as was elsewhere life was full of risk and here was somebody who was willing to cover some of it for nominal consideration. Business boomed, specially after nationalization on the insurance sectors in India after independence. But it is roses way for this vital sectors. The insurance policy sales executives is really a welcome visitor to any house hold. In fact many people consider GNIT-MS Page 6 There are little option before the consumer to

him as the hard bringer of impending death, a gentle reminder to ultimate reality waiting for each. One of us but ironically executives many working person would not, have head the dual pleasure of having his life covered and that the end of the cover period, getting back a tidy sum as saving tax exemption and of course peace of mind. Life insurance & ICICI you if you are not adequately insured. Today insurance is playing a role more than only covering a risk of life the education of children and life insurance corporation & other insurance medical are has now reached a stage where people have started looking down upon

benefit of life to the woman. So the insurance and specially the companies playing more a social role than only covering risk.

INSURANCE SECTOR Development before nationalization-Growth of Business:

The practice of insurance in the world is quite old infect. How ever, life insurance business, as it is known today, is a much later development. It evolved from the great transformation in life, which began with the decline of the agrarian society in the western countries in the 19th century. Industrialization with its cities, factories, cash economy and an urban saving class set the stage for life insurance as a large scale national institution. It can truly be that life insurance is a product of modern industry. Growth of life insurance Company in any country GNIT-MS Page 7

will illustrate introduced modern life insurance business didnt make much headway. The business started taking its deeper roots only when in the late 19th century India insurance companies appeared on the scenes and started accepting India lies freely on the same terms as European lives in India. The growth of India life insurance business continued to remain restricted till the Swedish movement gathered momentum. The business passed through the period of ups and downs with the political and economic situation in the country.

Need for Association

With the rise in the number of Indian life insurance companies occasioned by the growth in the national spirit as a result of the independent movement a need was felt by the companies for an organization to assist them in solving the problems faced by them. With a view to meeting this need and also to providing a representative body for expression of a common viewpoint of Indian insurance before the government regarding insurance legislation and Indian life Assurance offices association was established in 1928. The association played companies forum for expression of representative views on insurance and taxation legislation and imparting insurance education.

Nationalization
Even during days of the freedom struggle there was occasional demand for nationalization of life insurance industry. The demand naturally GNIT-MS gathers mare momentum after independence. Page 8

Mismanagement had lead to liquidation of as many as 25 life insurance companies in the decade after independence. Another 25 insurance companies had during the same period so frittered away their resources that their business had to be transferred to other companies. All these cost financial losses and consequent suffering to several policyholders who had entrusted their hard earned saving to the care of the company management. This misuse of power, position and privilege by these companies in the private sector was one of the most compelling reasons that influenced the decision of the government of India to nationalize the life insurance industry in 1956. The life insurance industry in India had to be geared up for raising resources for execution national programs. One of the objectives of the national plans was to build a pay welfare state. It was therefore, essential that benefits of life insurance were made available to every family in the country and that the business should be conducted with utmost economy by the management acting in a spirit of trusteeship to enable maximization of the peoples saving that could be analyzed through the life insurance into the development programs.

Objectives of nationalization:
The decision of the Government of India to nationalize life insurance industry was implemented by the passage of the life insurance Corporation Act, 1956, by Parliament. The objectives of nationalization of life insurance industry that emerged out of the discussion and speeches in the parliament in the time passage of the act were:

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1. Spread of message of life insurance as far and wide as possible reaching out beyond the more advanced urban areas well into hitherto neglected areas. 2. Effective mobilization of the peoples savings. 3. Complete security to policyholders. 4. Prompt and efficient services to the policyholders. 5. Conducting of the business with the utmost economy and with the full realization that the money. Belonged to the policyholders. 6. Investment of funds in such a way as to secure maximum yield consistent with safety of capital. 7. Economic premium rates. 8. Development of a dynamic and vigorous organization under a management conducted in sprit of the community. Trusteeship. 9. Formulation of scheme of insurance to suit different section of

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OBJECTIVE OF THE STUDY

The decision of the government of India to nationalize by the insurance industry was implemented by the passage of the insurance corporation act, 1956 by parliament. The objective of insurance industry is safe human life by covered by the insurance in my project work objective are mainly these are. To find out no. of policies sold of LIC. Vis-a-vis ICICI. To find out the level of security cover provided by to the policy holder by LIC vis--vis ICICI. To find out the consumers perception about the various benefits they set from these polices of LIC vis--vis ICICI. GNIT-MS Page 11

 To do swot analysis of LIC.

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METHODS EMPLOYED

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SIGNIFICANCE OF STUDY

A very common way to promote a Life insurance company through Life Insurance Marketing is to make the name of the company familiar to others by means of television commercials, handling out pamphlets, hanging banners in populated areas and by providing exciting offers.

Telephone marketing is another way of Life Insurance Marketing. One can see the telephone companies send messages about various offers and they even make phone calls. Web Insurance Marketing is another good strategy to promote insurance policies. The pop ups that one sees while using Internet are actually a very effective way of sending messages across the potential insurance customers.

One should listen to the existing Life Insurance Policy Holders as well as the potential Life insurance policy holders and listen to what people who actually matters have to say. One common problem that the insured persons face is that the insurance companies do not inform its clients about the hike in the premium rates. These things should be kept in mind. Not only that, a client should be informed about everything related to his policy and the Life insurance company should keep the transparency as much as possible.

Community Life Insurance Marketing is another different way to get promotion and a high recognition for the Life insurance company. Eminent workers join local community institutions, such as Chamber of Commerce, and by signing up there one can help out various projects that take place. These kinds of activities and social GNIT-MS Page 14

works on behalf of the Life insurance company helps the company to get free publicity as their names are published in news paper and in media also. Doing charity works also helps the Life insurance companies to come across various people who act as volunteers and can act as their potential Life insurance clients. People also like to deal with like minded people and companies and this is how many deals are made.

A Life Insurance Company should not charge different Life insurance client different charges for the same policy. This kind of policy gives the Life insurance policy holders the feeling that they are being treated unfairly and also that the Life insurance companies are only looking for profits and not the betterment of customer welfare.

When a Life insurance claim is filed, especially for a very big hefty amount, the Life insurance company should help out the policy holder in processing out the paperwork. One should not let bureaucracy enter and make it so difficult for the one making the claim so that he gives his claim .This has always been a common tactic on the insurance company's part to avoid paying claims claimed by the policy holder. This though makes a short term profit for the company but it hurts in the long run as the reputation of the company is hampered severely.

People in this Life insurance industry should always try to keep in constant contact with the existing customers as well. The competition in the insurance market is so fierce today that no company wants to loose out on a customer to another company. Clients who are not contacted for a longer period of time normally fail to remain loyal to the insurance company and look for a different Life insurance company. The company can keep the records of the client's birthday and days like anniversary and sent him or her small tokens of love or loyalty at a regular basis. If the GNIT-MS Page 15

company can afford a little more it can send dinner coupons to the Life insurance policy holder. These things play a major role and can be considered as an effective Life Insurance Marketing strategy.

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INDUSTRY PROFILE : Overview

The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business.

1. DEFINITION:Insurance is a legal contract that protects people from the financial costs that result from Loss of life, loss of health, lawsuits, or property damage. Insurance provides a means for individuals and societies to cope with some of the risks faced in everyday life. People purchase contracts of insurance, called policies, from a variety of insurance organizations. GNIT-MS Page 17

Insurance is conceived as a method of sharing of these losses, embodying the principle of co-operation existed in the early civilization. There is evidence that during the Aryan civilizations, loss of profits in industry was insured by the village co-operative in India. Almost everyone living in modern, industrialized countries buys insurance, for instance, laws in most states require people who own a car to buy insurance before driving it on public roads. Lenders require anyone who finances the purchase of a home or car with borrowed money to insure that property. Business partners take out life insurance on each other to make sure that business will succeed even if one of the partners dies. Insurance has been divided into two segments: a. Life Insurance b. General Insurance

Life insurance is a contract for payment of a sum of money to the person assured on the happening of the event insured against. Usually the contract provides for the payment of an amount on the date of maturity or at specified intervals or at unfortunate death. The contract also provides for the payment of premium periodically to the corporation by the assured.

General Insurance includes many areas of insurance like marine, motor, engg. Health (medical), fire etc. the contract provides for the payment of an amount on the happening of some contingency. These types of contracts are annual in nature.

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2. Insurance: A background Historians believe that insurance first developed in summer. The merchants and traders of these societies transferred and pooled their money to protect themselves and pirates. In the 18th Century BC, Babylonian king Samurai developed a code of law, known as the code of specific rules governing the practices of early risk sharing activities. Insurance also developed during the 1700s in the North American colonies. In 1730 Benjamin Frank contributed for the Insurance of Houses from Loss by fire. Early development of insurance was unorganized. It was mainly insuring commercial risks. The insurance inhuman life started in England in 1583AD for term Assurance for 12 months, which was issued for the first time. In 1705 amicable society started paying assurance on death a tern carried on unto 1757. In 1762 equitable society was the first co. to start charging premium on scientific basis. In India the references to insurance history relates to the East India Co. when some policies where issued on the life of Bruisers in foreign currency. In 1870- Bombay Mutual Insurance Limited In 1874- Oriental Govt. Security life Assurance Co Limited In 1896 Bart Insurance Co. and 1897 empire of India. In 1905 no of insurance company life Hindustan co-op United India, Bombay Life National Asian were set up during the above period. After 2nd world war several new companies were established, most important being New India Assurance Co. others were Jupiter, Lame, Andhra, Industrial Metropolitan and New Asiatic. After 1st World War the peace of Industrialization was accelerated in India. The Swedish movement had already gathered momentum and nationalism in the twenties, Indian offices began to take due share of the countrys business. It continuously progressed and there seemed to be steady rise in the per capita insurance in the country. GNIT-MS Page 19

The government started to exercise control with the passing of insurance act 1912 there was a marked increase in the volume of insurance business and other form of Business. More companies were floated. With a view to have a closer watch on the matter of investment of funds and expenditure and general management of business govt. enacted the insurance act in 1938 and also the Dept of Insurance under the authority of the superintendent of Insurance was established. This act was further amended in 1950. Before nationalization there were 97 operating centers almost all urban. There were 245 different insurance companies then. Nationalization off the Insurance business in 19 Jan 1956. LIC act of 1956 was passed by the parliament and received presidential assent on 18 th June 1956 and act come into force on 1st July 1956-LIC came into existence on the 1st September 1956 .

3. Importance of Insurance Insurance benefit society by allowing individuals to share the risks faced by many people. But it also serves many other important economic and societal functions. Because insurance is available and affordable, banks can make loans with the assurance that the loans collateral is covered against damage. This increased availability of credit helps people buy homes and cars. Insurance also provides the capital that communities need to quickly rebuild and recover economically from natural disasters, such as floods or earthquakes. Insurance itself has become a significant economic force in most industrialized countries. Employers buy insurance to cover their employees against work related injuries and health problems. Businessmen also insure their property, including technology used in production against damage and theft. Because it makes business operations safer; insurance encourages businesses to make economic transactions, which benefit the economies of countries.

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Insurance companies perform a type of monetary redistribution they collect premium and eventually redistribute that money as payments. Depending on the type of insurance, redistribution can take place anywhere from a few months to many decades. Because of this delay between collections and paying out funds, insurance companies invest their funds to bring in extra revenues. Such investments help businesses and government finance their operations, and few months from those investments deport the operations of insurance companies. With these investments earnings, insurance companies can keep rates much lower than would otherwise be possible. 4. Privatization of Insurance The Indian insurance has finally opened up. The first move towards liberalization came with the Amphora Committee Report in 1993 which recommended the privatization of insurance. Indian stands to gain witty the following major advantages: Better products with more reasonable and affordable pricing Quick servicing Increased saving rate Long-term funds for infrastructure development will be available to the country Large inflow of foreign capital

It is debated that the insurance business does not produce profit in the first five year. Cross subsidization is a feature of the Indian Market. Event the fire portfolio which is considered profitable, cross subsidizes the other department. Tariff reductions are likely to reduce further. Insurer will have to institute proper claims management process in order to extract proficiencies. The govt. is soon to present the new model for taxing life insurance companies at internationally competitive rates. New entrants would be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. GNIT-MS Page 21

Infect alliances related to distribution rather than to product or technology will prove most valuable in the long run. Brokers will come into the market for first time and there is bound to be intense competition as a result of this in the multi channels of distribution.

5. Need of Insurance Since beginning of the world, man has always felt insecurity for his assets and even life. There is uncertainty in every aspect of life. It is an old saying that only death and tax are certain, however even the time of death and rate jog tax is not certain. Uncertainties expose our assets to losses and consequently endless problems. A fire in a factory may burn everything and owners only source of earning with investment of huge capital is finished but insurance will come to ones rescue if insurance is taken, all the operations can be started again. Insurance does not only provide reimbursement at the time of loss but at the time of taking the policy, insurer provides suggestive measures to reduce the effect of hazards and losses. Earthquake, flood, riot, strike, theft, explosion, fire, etc. are some of the common dangers to our assets. Moreover life insurance besides providing financial assistance to the insured, these policies provide investment opportunities and even pension plans at market interest rate.

6. Opportunities in Insurance In Indian market, the opportunity for insurance companies is huge. The efforts of government companies have lacked sincerity, as there is large untapped market even after 45 years of nationalization. According to sources, 30 cores people of India can afford insurance however only 8 cores of them have taken any insurance. Life insurance premium collected in a year is only 2% of gross domestic product in India with that of 12% in USA.

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Total non-life insurance premium is a mere 0.6% of GDP which is almost negligible. On the basis of this it can be sold that there is huge scope for insurance in India. There is still much to achieve and a big market to explore. The latent demand foreseen in Indian market and the success of liberalized market in emergent economies make this a great opportunity. To avail this may international players including the world leaders have set up their business in India in last two years. Prudential life insurance was first company to tie up with an Indian company i.e. is ICICI and gets a license. Each company requires 100 crores of capital to start their business, which is a big amount to ensure the solvency of company at all times. Other companies, which have come up, are:

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MAJOR PLAYERS OF LIFE INSURANCE IN INDIA

1. Life Insurance Corporation of India 2. ICICI prudential Life Insurance 3. HDFC Standard Life Insurance 4. Max New York Life Insurance 5. Birla Sun Life Insurance 6. Om Kotak Mahindra Life Insurance 7. Reliance Life Insurance 8. Bajaj Allianz Life Insurance 9. Ing Vyasa Life Insurance 10. 11. 12. 13. 14. SBI Life Insurance MetLife Insurance Sahara Life Insurance Aviva Life Insurance TATA Aig life Insurance

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ICICI PRUDENTIAL LIFE INSURANCE:

COMPANY PROFILE

HISTORY OF THE COMPANY

ABOUT ICICI BANK Industrial Credit Investment Corporation of India (ICICI) was formed in 1995 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. ICICI bank is Indias second largest bank with total assets of about Rs. 1 trillion and a network of about 540 branches and offices and over 1,000 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 specialized subsidiaries and affiliates in the areas of investment banking, life and non life insurance, venture capital, asset management and information technology. ICIC Banks equity shares are listed in India on stock exchanges at Chennai, Delhi, Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange GNIT-MS Page 25

(NYSE). The Bank offers a broad spectrum of financial services to individuals and companies including deposit accounts, commercial banking, mortgagees, car loans, personal loans, corporate and trade finance, credit and debit cards and other banking services. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. ICICI prudential has one of the largest distribution networks amongst private life insurers in India, having commenced operations in 23 cities and towns in India. These are: Ahemdabad, Bangalore, Chandigarh, Chennai, Coimbatore, Gurgaon, Hyderabad, Indore, Jaipur, Kochi, Kolkata, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpur, Nasik, Noida, New Delhi, Pune and Vadodara. The company has the largest number of banc assurance tie-ups, having agreements with ICICI Bank, Citibank, Allahabad Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, and Punjab & Maharashtra Cooperative 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.

About Prudential
Established in 1848, prudential is a leading international financial services company in the UK, with some US$276 billion funds undermanagement and more GNIT-MS than 13 million customers worldwide. Page 26

Prudential has brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia, prudential is UKs largest life insurance company with a vast network of 22 life and manual fund operations in twelve countries China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, 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. About the Company (ICICI Prudential) ICICI and prudential came together in 1993 to provide mutual fund products in India and today are the largest private sector mutual fund company in India. 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 Prudentials equity base stands at Rs. 3.75 billion, with ICIC Bank and Prudential plc holding 74% and 26% stake respectively. As of December 31, 2002, the company had issued nearly 230,000 policies with a sum assured of over Rs. 6,500 crore and premium income in excess of Rs. 340 crore. Today the company is the #1 private life insurers in the country. ICICI prudential has recruited and trained over 16,000 insurance agents to interface with and advise customers, and has the highest number amongst private life insurers on the renowned million-dollar round table (MDRT).

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Their latest venture ICICI prudential life plans to take care of the insurance needs at various stages of life. ICICI prudential life insurance company has mopped up a premium income of Rs. 75 crore for the year ended March 31, 2004 reflecting a 106 per cent growth over corresponding period last year. It has sold 4.7 lacs policies during the year, against one lakh policies sold in fiscal 2002. ICICI prudential has cornered about 31 percent of the private sector insurance market, which today accounts for 10 percent of incremental sales of the entire industry. Average premium is Rs. 18000+ majority of 1.2 lakh policies sold by ICICI prudential in last quarter of fiscal 2004 were pension and unit-linked plan. Pension products accounts 25 per cent of the sales giving ICICI prudential an overall industry share of 25 percent.

PRODUCT OFFERED BY ICICI PRUDENTIAL At ICICI prudential customer delight is their guiding principles. Ensuring world class solution by offering customized product with transparent benefits supported by the best technology is their business philosophy benefits supported by the best technology are their business philosophy. According to Mr. Santosh kumar, Agency manager, ICICI PRU. The company has used innovative marketing as well as pricing strategies and their premium chart would be much lower than the other player in the market. Company has launched various products in the market with most competitive premium among all players.

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Protection plans

These are very good plan for those who want protection (especially) for their family because happiness and security for our family is all that we want. However, the uncertainties of life often worry you. Unfortunate events can make you are no longer around. Life insurance can help ease many of those worries. It ensures that your loved ones are adequately provided for and that their future is secure, no matter what the uncertainty. ICICI PRU offers you a choice of 3 level term products with insurance protection: Life Guard Level Term Assurance Life Guard Level Term Assurance with Return of Premium Life Guard Single premium

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How these plans work Life Guard Level Term Assurance

What is Life Guard level term assurance policy? This plan provides financial protection to your family in case of the unfortunate event of death. How does the Life Guard Level Term Assurance policy work? You will have to pay a regular annual premium for the term chosen and will be provided the insurance cover on your life equal to the sum assured. What benefit does this plan offer you? In case of death of the life assured during their term, the sum assured under the plan will be paid to the beneficiary. There are no maturity benefits. Hence, on survival till maturity, the policy will terminate without any returns. How much you have to pay for this plan? The following table gives you indicative premiums for various age term combinations for a sum assured of Rs. 10 Lakhs.

Age

Term of the policy

5 years 10 years 2504 2925 3601 15 years 2553 3072 4287 20 years 2680 3582 5110

30 years 35 years 40 years

2455 2876 3386

What tax benefits are available for this plan? The plan offers tax benefits u/s 88. GNIT-MS Page 30

 What additional feature does this plan offer you? You can avail of the Accident and Disability Benefit under this plan. What are your entry conditions for Life Guard Level Term Assurance? Your age at entry should be between 18 years and 50 years. The minimum term is 5 years and the maximum term is 25 years, which is subject to a maximum of 65 years of age. minimum premium for the product is Rs. 2400 per annum. The

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Life Guard Level Term Assurance with Return of Premium

How does the Life Guard Level Term Assurance with return of premium policy work? You will have to pay a regular premium for the term chosen and will be provided the insurance cover on your life equal to the sum assured. What benefit does this plan offer you?

In case of death of the life assured during the term, the sum assured under the plan will be paid to the beneficiary. On survival till maturity, all the premiums paid, will be returned without interest. What tax benefits are available for this plan? The plan offers tax benefits u/s 88. What additional feature does this plan offer you? You can avail of the accident and disability benefit under this plan. What are your entry conditions for Life Guard Level Term Assurance with Return of premium? Your age at entry should be between 18 years and 50 years. The minimum term is 5 years and the maximum term is 25 years, which is subject to a maximum of 65 years of age. The minimum premium for the product is Rs. 2400 per annum.
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Life Guard Single Premium What is Life Guard Single Premium policy? This is a single premium variant of the Level Term Assurance Plan. How does the Life Guard Single Premium policy work? You have to make a one-time premium payment, depending upon the term and the sum assured chose by you. What benefit does this plan offer you? In case of the death of the life assured during the term, the sum assured under the plan will be paid to beneficiary. There are no maturity benefits at the end of the term. What tax benefits are available for this plan? The plan offers tax benefits u/s 88. What are your entry conditions for Life Guard Single Premium? Your age at entry should be between 18 years and 50 years. The minimum term is 5 year and the maximum term is 15 years, which is subject to a maximum of 65 years of age. The minimum sum assured for the product is Rs. 2 lakhs.

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Saving Plans

Most endowment policies are a good way of saving for the future. A policy can be designed to make your savings grow and have them available to you at the end of a fixed number of years. Or, a policy could provide you with an income every three or four years. ICICI provides you three savings plans with insurance protection: Save n Protect Smart Kid Cashbak How these plans work Smart Kid

What is Smart kid?

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A plan which gives child the freedom to pursue their dreams, the strength to face challenges, the guarantee to live life to its fullest whatever be the uncertainty. As parents, your biggest concern is that of securing the future of your child. In todays world, with ever increasing competition, escalating cost of education and uncertain financial markets, it is very important to plan for your childs future. It is a plan that provides guaranteed benefits to your child along with the life insurance cover. Smart kid 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 What should you buy smart kid? Because smart kid ensures that you have total peace of mind as far as your childs 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.

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 Waiver of premium no future premier are payable, thereby ensuring that your family is not burdened financially. Thus, there will be no financial obstacle in realizing the dream which the parent or child had. What are the options for premium payment? Mode of payment:: Monthly, half yearly and yearly. What are the limits of Smart Kid? a. Minimum premium: Rs. 8,000/- per year b. Sum Assured: From Rs. 100,000/- to Rs. 3,000,000/c. Maximum 1,000,000/d. Maximum limit under Accident & Disability Benefit Rider: Rs. 1,000,000/ What tax benefits will you get? The premium that you will be paying will be tax exempt under section 88 Save n Protect limit under Income Benefit Rider: Rs.

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Being the head of the family requires that you bear quite a few responsibilities. Some of these include: being able to fund your childs higher education, your daughters wedding, your own cozy nest and realize all your other dreams. This is an ideal plan for those who want to accumulate funds on a regular basis while enjoying insurance protection. What exactly does the Save n protect do? It is a fixed term policy that combines savings with life cover. It is a fixed term plan in which you pay premium regularly during the term. On the death of the life assured, in the beneficiary will get the sum assured, the guaranteed additions and the vested bonuses. Once the policy matures, i.e. at the end of the term, you can get the full sum assured and guaranteed additions as well as the vested bonuses. In addition, you will get an extended term insurance cover for five years after the maturity date of the policy for 50% of the sum assured. You will not have to pay any premium for the same. Who can apply? You can apply if you are in the age group of 0 to 60 years. The maximum cover ceasing age is 70 years. The minimum sum assured you should apply for is Rs. 50,000

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and the minimum term is 10 years. The minimum premium is Rs. 4,8000 p.a. Can I take a loan against my policy? Yes, you can avail of a loan under the policy, to meet your requirements. This will be dependent on the surrender value your policy acquires. Interest is charged on the amount of loan availed. Can I discontinue my policy? Your policy acquires a paid up value after premiums are paid for three years. A guaranteed surrender value is payable to you, if you decide to terminate the policy after 3 years premiums are paid. However, the insurance protection provided under this policy will also cease. What is the add-on-cover? Accident & Disability Benefit Critical Illness Benefit Major Surgical Assistance What tax benefits will you get? The premium that you will be paying will be tax exempt under section 88. Cash Back

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As an individual you have to be financially prepared for various milestones in your life. If you are newly married, you need to plan for a baby a few years from now. If you have teenage children you need to plan for their university education. What you need is a plan to meet your periodic financial, requirement with the added benefit of insurance protection. What exactly do the Cashbooks do? Sit is a three in one plan that combines savings, liquidity and protection through the following: Fixed term of 15 or 20 years Survival benefit payments at regular intervals Premiums are payable throughout the term of the policy On the death of the life assured, the beneficiary will get the sum assured, the guaranteed additions and the vested bonuses. Who can apply?
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You can apply if you are 16 years old and no older than 55 years. The minimum sum assured you should apply for Rs. 75,000. The minimum premium amount is Rs. 4,800 p.a. Can I take a loan against my policy? No loans are available under this policy. Can I discontinue my policy? Yes, you can discontinue your policy after premiums are paid for three years. A guaranteed surrender value is payable to you, if you decide to terminate the policy after 3 years premiums are paid. However, the insurance protection provided under this policy will also cease. What is the add-on cover? Accident & Disability Benefit Critical Illness Benefit Major Surgical Assistance Retirement Plans

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When a person grows old both the physical capacity as well as the financial capacity of that person become weak and at some time inefficient and as a result what ever the standard of living that the person maintained in his young get deteriorated with span of time. It is not in the power anybody to return the physical strength back to the person but with some retirement plans i.e. pension plans the financial strength can be regained by the person in order to maintain his present standard of living. These plans take care of the inflation as well future requirement of a person at his old age. At present ICICI Prudential offers four types of retirement plans for the public. This plan gives a safety and security o those people who aged and not involving in any of financial activities and complete depends on any monetary to sustain their living. Retirement Plans 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 dearth of the last survivor the purchase price is returned back to the beneficiary.

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 Choice of Retirement Date: You have the flexibility to postpone your vesting age up to a maximum of 70 years of age. 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 tax benefits are available with Life Link Pension? Tax benefit u/s 80CCC (1): Up to Rs. 10,000 deducted from your taxable income. How much you have to pay? The minimum premium in this plan is Rs. 25,000. What are your entry conditions? You can apply for this plan if you are between 18 and 62 years of age. You have the flexibility of choosing the vesting age between 50 and 70 years of age. Minimum term of the product is 3 years. Riders Riders are the additional benefit that you can add on to your policy. You can opt for riders when taking the basic policy at a marginally incremental cost. No bonuses are paid on the riders. 1. Critical Illness Benefit Rider A rider added to a life insurance policy to protect the insured in the event of a critical illness. 9 medical conditions
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are covered by this benefit. This ensures living benefits payable to the insured for medical expenses prior to death. This rider is available with Saven Protect, Cash Bank, Forever Life (Regular Premium Deferred Pension), Life Time and Life Time pension. If the life assured is diagnosed to be suffering from a specified Critical Illness after six months from the date of policy, the Sum assured under this policy shall be paid together with guaranteed additions Conditions When the policy is in force for the full sum assured Any time before the expiry of the policy Before the age of 65 (which ever is earlier) On the payment of the Sum Assured together with the bonuses and guaranteed additions if any, allocated to the policy, the policy terminates Exclusions The critical illness shall not have been caused by the existence of Acquired Immune Deficiency Syndrome or the presence of any Human Immune deficiency Virus Infection in the person of the Life Assured. Self inflicted injury Drug abuse

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 Failure to follow medical advice War, whether declared or not and civil commotion Pregnancy Breach of law Aviation other than as a fare paying passenger in a commercial licensed aircraft (being a multi engine aircraft) Hazardous sports/pastimes The benefit shall not be payable in respect of any illness other than those denied as Critical Illness, nor shall it apply or be payable in respect of any of those said illnesses the symptoms of which have occurred or which has been diagnosed or for which the insured person received treatment, during the first 6 months from the date of policy. The maximum aggregate of critical Illness Benefit granted by the Company under all the policies of the Life Assured shall not exceed Rs. 10, 00,000. Premium The premium for this benefit is guaranteed for five years only from the date of commencement of policy. The company reserves the right to carry out a general review of the experience from time to time and change the premium as a result of such review. The company will give notice in
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writing about the change and the Life Assured will have the option not to pay any increased premium. In such a case the benefit will be appropriately reduced from the effective date of the change in premium and the company will advise the Life Assured accordingly 80D. This rider is available with Saven protect, Cash Bank, Forever Life (Regular Premium Deferred Pension), Life Time and Life Time pension. The maximum sum assured under Major Surgical Assistance Benefit granted by the Company under all the policies of the Life Assured shall not exceed Rs. 10, 00,000. Benefits Under this the life assured is paid 50% of sum assured in respect of major procedures 30% of sum assured in respect of intermediate

procedures 20% of sum assured in respect of minor procedures this benefit is payable on more than one occasion when the life assured undergoes surgery. However the total benefit payable in case of all the procedures is restricted to a maximum of 50% of the sum assured. Conditions The benefit would be available only for medically necessary surgical procedures performed at a hospital as in patient
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 When the policy is in force for the full sum Assured Anytime before the expiry of the policy or before the age of 65 (whichever is earlier) Exclusions The company shall not be liable to pay any sum under or in terms of this benefit in the event of: Preexisting injuries or illnesses, treatment that is not taken from recognized hospitals or doctors. No benefit will be payable in respect of a claim which, in the opinion of our Chief Medical officer, results directly or indirectly from a condition for which the insured person has previously received treatment, or which had previously been diagnosed, or which he was aware of, at the commencement of the policy or within the first 6 months from the date of policy. HIV/AIDS Congenital or hereditary diseases or physical defects Attempted suicide Attempted suicide Self inflicted injury, drug abuse Injuries from natural disasters

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 War and civil commotion Criminal acts Taking part in flying activity other than as a passenger in a commercially licensed aircraft, (being a multi engine aircraft) By engaging in hazardous sports/pastimes, i.e. taking part in (or practicing for) boxing, caving, climbing, horse racing, mountaineering, off piste skiing, pot holing, power boat racing, underwater diving, any race, trial or timed motor sport. Premium The premium for this benefit is guaranteed for five years only from the date of commencement of policy. The company reserves the right to carry out a general review of the experience from time to time and change the premium as a result of such review. The company will give notice in writing about the change and the life assured will have the option not to pay any increased premium. In such a case the benefit will be appropriately reduced from the effective date of the change in premium and the company will advise the Life assured accordingly. 3. Accident and Disability Benefit Rider This rider is available with Save n protect, Cash Bank, Life Guard (Regular Premium Level Term Assurance),
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Forever Life (Regular Premium Deferred Pension), Life Time, Life Time Pension, Assure Invest and Re Assure. The rider is eligible for the same tax benefits as the basic policy to which it will be attached. The policy terminates once the benefit of the claim is paid. Accident Benefit This benefit is payable in case of death that occurs as a result of an accident. The death must occur: When the policy is in force for the full sum assured Any time before the expiry of the policy Before the age of 65 (whichever is earlier) Benefits If you are covered under this benefit and if death occurs as the result of an accident during the term of the policy, your beneficiary shall receive an additional amount equal to the accident cover under the rider. If the accidental death occurs during the term of the policy, while you are travelling as a fare paying passenger on an authorized public mass transport namely bus or train, your beneficiary will be entitled to twice the accident cover under the rider. Exclusions The death due to accident should not be caused: By attempted suicide or self inflicted injuries while sane or insane, or whilst the Life Assured is under the influence of any narcotic substance or drug or intoxicating liquor; or
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 By engaging in aerial flights (including parachuting and skydiving) other than as a fare paying passenger or a licensed passenger carrying commercial aircraft (being a multi-engine aircraft) operating on a regular scheduled route; or By the Life Assured committing any breach of law; or Due to war, whether declare door not or civil commotion; or practicing for boxing, caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off piste skiing, pot holding, power boat racing, underwater diving, yacht racing or any race, trial or timed motor sport. DISABILITY BENEFIT This benefit is payable in case of disability that occurs as a result of an accident. The maximum cover under this benefit is Rs. 10, 00,000. This is inclusive of all the policies you may have taken with us. The disability must occur. When the policy is in force for the full Sum Assured Any time before the expiry of the policy Before the age of 65 (whichever is earlier)

BENEFITS

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If the Life Assured is totally and permanently disabled as a result of an accident the following additional benefit paid: 10% of the Sum Assured every year for 10 years commencing from the first anniversary of the disability date. Premiums under this rider falling due on or after the disability date shall be waived. If there are any other benefits payable under this rider then all such benefits shall cease to be available on and after the disability date The dearth due to accident should not be caused; By attempted suicide or self inflicted injuries while sane or insane, or whilst the Life Assured is under the influence of any narcotic substance or drug or intoxicating liquor; or By engaging in aerial flights (including parachuting and skydiving other than as a fare paying passenger on a licensed passenger carrying commercial aircraft (being a multi engine aircraft) operating on a regular scheduled route; or By the Life assured committing any breach of law; or Due to war, whether declared or not or civil commotion; or

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 By engaging in hazardous sports/pastimes, i.e. taking part in (or practicing for) boxing, caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off piste skiing, pot holing, power boat racing, underwater diving, yacht racing or any race, trail of timed motor sport.

3. Income benefit rider Besides education, aspects lie extra curricular activities, sports, picnics, trips etc. ensure the all round development of your child. So long as the parent is alive, these needs are taken care of. But, what if something unfortunate was to happen? Income benefit rider takes care of this through payment of 10% of sum assured annually to your child on each policy anniversary following an unfortunate demise, till maturity of the rider.

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Is there any testing period the policies? Yes, under the free look period, insured now have the flexibility to review the policy. If, during this period, he wish to return your policy after reviewing the terms and conditions, he may do the same, by returning the original policy certificate, the policy document and a letter stating the reasons for the return. This must reach companies customer service desk within 15 days from the date of receipt of the policy at your end. Company shall refund the premium paid by you, after deducting certain charges. These charges include a proportionate risk premium for the period of cover, the stamp duty on the policy and/or any expenses borne by the company on the medical examination. In case of a market linked policy, your units will be repurchased by us at the unit value determined on the valuation date following the date of cancellation after deducting the charges mentioned above. Is there any free look period for the policies? Under the free look period, insured now have the flexibility to review the policy. If, during this period, he wish to return your policy after reviewing the terms and conditions, he may do the same, by returning the original policy certificate, the policy document and a letter starting the reasons for the return. This must reach companies customer service desk within 15 days from the date of
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receipt of the policy at your end. Company shall refund the premium paid by you, after deducting certain charges. These charges included a proportionate risk premium for the period of cover, the stamp duty on the policy and/or any expenses borne by the company on the medical examination. In case of a market linked policy, your units will be repurchased by us at the value determined on the valuation date following the date of cancellation after deducting the charges mentioned above.

BUSINESS OVERVIEW
The revolution began in 2000 Prior to deregulation in 2000, market was a public monopoly with limited focus on customer needs Public monopoly 2,000 offices Over 800,000 agents Distribution through tied agents only Push sales approach purely on a tax savings platform Limited focus on customer needs Traditional style product offering Endowment and money back plans Inflexible and inadequate products Pensions Small part of product offer Our approach : A new age life insurance model

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Entry

Joint venture entry platform Strong, respected partners Comprehensive portfolio Innovative and flexible Creation of a superbrand

Product Brand

Distributi Rapid expansion of agency on Multi-channel platform Operation Best in class s Customer centric People
Talent from diverse industries

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Our approach : Our joint strengths

Brand strength

Reputation

Infrastructure Customer base Market Innovators

Insurance expertise Product Distribution

Local knowledge

Operations

Vision To be the dominant life & Pensions player built on trust by world class people & service Values Customer First/Boundaryless/Ownership/Passion/Integrity Our approach : Our rapid expansion of agency We have created a large-scale, nationwide agency network

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Mar 2002 Locations Branches Advisors 13 14 10,000

Mar 2003 25 29 18,000

Mar 2004 54 70 33,000

Mar 2005 74 107 56,000

Initial years, emphasis was on expanding the reach Now, penetrating those cities for increasing market share Focus on sales and service processes to achieve higher penetration into High Net Worth (HNW) segment

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Table of 4 years : Achieving Scale with High Growth Rates

Annual Premium Equivalent 14 12 10 8 6 4 2 0

12.6 7.1 0.7

2001-02

2.5
2002-03 Linked 2003-04 Par Non-Par 2004-05
(Rs. Bn.)

Capital Guarantee

Value & Volume Growth

Cases & Average Premium

650 600 550 500 450 400 350 300 250 200 1 50 1 00 50 2001 -02 2002-03 2003-04 2004-05
(in thousands)

25

20

1 5

1 0

Cases

Avg P remium

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Funds Under Management

Funds Under Management
44 40 36 32 28 24 20 16 12 8 4 0

38.3

16.6 2.0
2001-02

6.8

2002-03

2003-04

2004-05
(Rs. Bn.)

Par

Non-Par

Linked

Shareholders

Driving Profitability
NBAP
3.5 3.0 2.5 2.0 1.5 1.0 0.5 (Rs. Bn.)

3.1 2.0

0.7

2002-03

2003-04

2004-05

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India: Overview

Country
Population 1,055m Insurance penetration2.7%

Characteristics
Pre-2000 : Public monopoly Market deregulated in 2000 ICICI entered in 2000 through joint venture with Prudential

Life insurance market

In-force premiums INR 530b FY05* new premiums INR 156b Total premiums INR 686b

Top 5 players
Life Insurance Corp. of India (LIC) ICICI Prudential Birla Sun Life Bajaj Allianz HDFC Standard

Retail Market Share : Private Players

Retail Market Share 2004-05

Kotak Life 4.9% Max Newyork 5.5% SBI Life 2.7%

Aviva 4.5%

ING Vysya 6.7%

Metlife AMP Sanmar 0.7% 1.2% ICICI - Pru 34.2%

Bajaj Allianz 11.3% Tata AIG 6.3% Birla Sunlife 12.9% HDFC Std.life 9.1%

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COMPARATIVE STUDY WITH LIC

LIC PROFILE A COMPARATIVE STUDY OF ICICI PRUDENTIAL AND LIC POLICIES LIC and ICICI Prudential both provide different policies and plans depending upon the various requirements of people. Different plans are been categorized under seven major categories of policies. Then a comparative analysis is done between the plans of both LIC and ICICI Prudential. Both the companies provide similar types of plan just with the difference in the features or premium amounts. Whole life policies LIC

ICICI Prudential

WHOLE OF LIFE PLANS

LIFE TIME PLAN

The most cheapest form of LIC Policy that meets your changing policy need over a lifetime

Premiums are payable through Premium out the life towards

part

is

adjusted and

morality

administrative charges and rest Sum assured is payable on the death of the life assured is invested in plan of your choice.

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Bringing the difference in the plan of LIC and ICICI Prudential we can find out that LIC plans are very simple to understand whereas the other provide plans according to your the changing needs of people.

ENDOWMENT POLICIES LIC ICICI Prudential

ENDOWMENT WITH PROFITS

ICICI PRU SAVE N PROTECT

These are the policies of limited An ICICI ideal plan for those who duration payable on maturity or want to accumulate funds on a death of the life assured. regular basis with life cover

These plans are available with It is a fixed term policy that different without option profit like or with or combines saving with life cover. or The premium is paid regularly during the term double

special endowments

On death up to age: - basic premium interest On death after age 7: - sum assured @3.5% compounded interest for first 4 yrs and then GNIT-MS Page 61 returned without

vested bonus.

We can make out comparing the plans of both the companies that while ICICI are more concerned about saving and are categorised for the different section of people. LIC is straight and simple plan.

MONEY BACKS POLICIES

LIC ICICI PRUDENTIAL

JEEVAN MITRA

ICICI PRU CASH BAK

A high risk low cost plan and with An ideal plan for every milestone profit plan of life. It combines life cover+liquidity+savings. This plan provide for an

additional insurance cover, equal It provides survival benefit after to the sun assured in the event every 3 or 4 yrs and add-on of policy holder death during the benefit term of policy. JEEVAN SURBHI Premium payable for limited for a nominal extra premium.

periods available with periods of 12,15 and 18 yrs

Money back at interval of 4 and GNIT-MS Page 62

5 yrs as per policy term JEEVAN SANCAY Plan having a provision of

guarantee addition at 70p.a. per thousand and loyalty addition payable on date of maturity.

The LIC under money back policies provide various plans each having different kinds of features. On the other hand ICICI Prudential, which combines all the features in just one single plan. The LIC plans like jeevan surbhi are suitable for high income and tax categories.
SINGLE PREMIUM POLICIES LIC ICICI PRUDENTIAL

BIMA NIVESH This is a unique,

ICICI PRU REASSURE short-term, A safe and comprehensive plan It combines best of

multiple benefits insurance plan for those about to retire or has which provide safety, liquidity retired. attractive benefit. Liquidity with assured and steady This plan can be assigned as a annual returns. Life cover up to collateral security GNIT-MS Page 63 returns and tax insurance and investment

It provides loyalty and guarantee 110% of premium paid. addition too. ICICI PRU ASSURE INVEST An investment with healthy

returns and added benefit of insurance.

This policy has a fixed term of 7 or10 yrs ICICI PRU LIFE LINK An ideal market linked insurance plan that enables you to enjoy the upside of market returns

It gives you flexibility of choosing your investment option between growths, plan. income or balanced

Under the single premium policies heading LIC just provides one policy as compared to ICICI Prudential, which gives different policies. Moreover ICICI Pru gives higher assured returns and various other benefits.

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TERM INSURANCE PLANS

LIC BIMA KIRAN ICICI PRUDENTIAL ICICI PRU LIFE GUARD

A plan with the provision for An ideal low cost policy that return of premium paid on covers your life with surviving of the term uncertainties

Free term cover after maturity It comes with a choice of two provided the policy is in full force convenient premium payment modes-one time and regular Having an added attraction of loyalty addition It gives the flexibility of accident and disability cover for a extra JEEVAN GRIHA For people desirous of obtaining a housing loan with policy acting Minimum premium payable 2400 per annum. It has no maturity as collateral security benefits It ensure repayment of loan in the event of premature death of the borrower A high risk low cost plan Available as double and triple cover plans GNIT-MS Page 65 premium

Comparison

between

the

plans

of

both

the

companies shows that while ICICI Prudential provide more flexible and stable return plans the LIC are safer plan taking care of family as a whole. Again LIC provides different plan under this category of life insurance.

Children polices LIC ICICI PRUDENTIAL

JEEVAN BALYA Plan provides for a

SMART KID monthly Plan designed for critical include

income up to age of 21 in case of educational unfortunate death of parents and abroad Premium available BAL VIDYA The plan takes care of family expenses-on school college, health or just starting a career waiver benefit is The sum

milestone

specialized course in the country

assured from

is

paid to

immediately 300,000

100,000

All future payments are waived off

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Money

in

regular

monthly

instalment and in lump sum at specific point of time. Most importantly the Childs will continue to receive the policy benefits.

We can make out that LIC provide different plans for children as compared to ICICI Pru, which gives only one plan for kids. Both aims at providing the parents aid for higher studies of their children. While LIC policies are designed to meet the different need of family budget ICICI Prudential are more customer tailored.
ANNUITY PLANS LIC ICICI PRUDENTIAL

JEEVAN SURAKSHA

ICICI PRU FOREVER LIFE

This plan is suitable for every An individual salaried or

ideal

solution

for

self people around 30 yrs of employed or any professional like C.A., Dr.

age,

which

offers and your

retirement takes

benefit of

care

The plan can be availed for a life long monthly pension with an option to commute 25%of the sum assured. GNIT-MS

protection need

Health cover till 65 through add Page 67

JEEVAN DHARA This plan is suitable for on benefit

executives; people working

self-employed, wit 15 yrs 100% spouse pension ICICI FOREVER LIFE LINK

professional young employed or experience.

PENSION PLAN The plan guarantees life long pension and are tax deferred, guarantee 12.5% return presently A single premium market linked pension between Rs 40000 to 99999 it is 2% Rs 100,000 to 499,999 it is Policy provides competitive and attractive annuity rates. 1.5% Rs 500,000 and above it is 1.25 % of the premium Lump sum payment to the Insurance coverage is equal to 105% of the initial premium and the top ups Can opt for 0 insurance cover too plan. For premium

annuitants here.

ICICI PRU LIFE TIME PENSION PLAN A regular premium linked

pension plan On retirements the accumulated value of your investment is used GNIT-MS Page 68

to provide pension For less than 50000- it is 20% For premiums equal to or more than 50000- it is 18% In case of zero death benefit it is 18% and 15% of the premium.

Both LIC and ICICI Prudential provide various plans for pension. The LIC plans are more suitable for all age of people whereas the other one are especially for aged people. Moreover ICICI Prudential plans are made such that each income level can opt depending upon their potentials.

CONCLUSION The comparative analysis between the plans of both the companies shows that both differs in their projection and outlook while they aim at same targets and provides similar kind of returns. The LIC business is more about providing social security and financial safety net for the dependants. It ensures the life of the people providing life insurance product and services of high quality and providing resources for economic development. The logo of the company also shows image of corporation that cares. The advantage of LIC over its peers is that the sum assured comes wit sovereign guarantee

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On the other hand ICICI Prudential has little different approach customers strategy towards centric; to offer its business. They are more having to provide quality circle,

superior risk management. They go for investment consistent, stable returns policyholder. The ICICI Prudential had an entire range of insurance product. Their aggressive strategy will certainly pay off one step ahead of competitors.
PROPOSED SCHEME The present chapter attempts to discuss 1) The analysis of the research conducted through a questionnaire 2) We are trying to find the awareness of people about the various insurance companies and the type of insurance that the people avail in general. 3) We also tried to find in detail the awareness about the plans of LIC and ICICI prudential. We could understand the satisfaction of the people from the working of insurance company and the problem faced by them.

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DATA ANALYSIS & INTERPREATION :

1.INSURANCE AVAILED This graph shows the number of people who are aware and thus availed the different kind of insurance product. The percentage of people who avail insurance plan is full100 %.

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ANALYSIS: As per todays market situation almost all the people are aware of insurance and have opted for some or the other type of insurance policy

2.FACTORS IMPORTANT WHILE OPTING A POLICY The following graph is about factors that people look while opting for any insurance plan. The returns have the highest option of 90% and premium bags the second by 85%.

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80 70 60 50 40 l e p f . o n 30 20 10 0 Risk Cover Tax Benefits Returns &savings Liquidity

ANALYSIS 1) Risk Cover as Savings through insurance guarantee financial protection against risk of death of policyholder by payment of sum assured and bonus if any. GNIT-MS Page 73

2 Tax benefits as tax rebate can be availed U/S 88 in majority of Plans and U/S 80CCC(1) for investment up to Rs10, 000 in pension plans. 3) Return savings long term savings in a painless manner for future needs because of easy instalment facilities (monthly, quarterly, half yearly, yearly) and attractive returns. 4) Liquidity investment in money back policies guarantee periodical payments after every 3,4or5 years, loans can be raised on policies and security for commercial or housing loans. 3.Insurance Company awareness

The bar diagram shows the awareness of people among various companies prevailing in the market. The LIC is highest with 95% and ICICI Pru with 65%.

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ANALYSIS The concept of insurance means LIC is changing with time. Although mostPeople know about LIC but their awareness about other insurance companies is also good.

4.INSURANCE COMPANY AWARENESS LIC is highest with 99% and ICIC Prudential with 72%

ANALYSIS: -

All

the

respondents

know

about

LIC

but

there

awareness of private insurance companies, ICICI Prudential is also gaining momentum.

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5.WORKING

OF

COMPANY

SATISFACTION

OF

PEOPLE/CONSUMERS

The graph shows how much the people are satisfied with the working of the company. The number of people satisfied is 65% while who are not satisfied are 35%.

ANALYSIS: Satisfaction of people from the products and services of insurance companies is quite high. Around 65% of the people are satisfied from the working of insurance companies and feel that the problems faced are handled properly and as quickly as possible

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WHOLE LIFE POLICIES

8% 7% 6% 5% 4% 3% 2% 1% 0% awareness availed

LIC ICICI

The analysis shows that of all the respondents 8% are aware of LIC s Whole life Policies and 1% are aware of ICICI s Whole life Policies.1% have availed LICs Whole Life Policies whereas none have availed ICICIs Policy.

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Term Insurance

20 15 10 5 0 awareness availed
LIC ICICI

The analysis shows that 19% people are aware of LIC s Term Insurance Policy and 7% people are aware of ICICI s Term Insurance Policy. And 2% availed LICs and no one has availed ICICIs Policy.

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80 70 60 50 40 30 20 10 0 awareness availed

LIC ICICI

Endowment The analysis shows that 78% people are aware of LIC s Endowment Policies and 28% people are aware of ICICI s Endowment Policies. And 38% of people have availed LICs Endowment Policies whereas 3% have availed ICICIs Policy.

MONEY BACK POLICY

90 80 70 60 50 40 30 20 10 0 awareness availed

LIC ICICI

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The analysis shows that 84% people are aware of LIC s Money Back Policy and 24% people are aware of ICICI s Money Back Policy. 42% of them have availed LICs Endowment Policies whereas 2% have availed ICICIs Policy.

Children Plan

25 20 15 10 5 0 awareness availed
LIC ICICI

The analysis shows that 24% people are aware of LIC s Children Policy and 8% people are aware of ICICIs Children Policy. And 4% availed LICs but no one has availed ICICIs Policy.

ANNUITY PLANS

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30 25 20 15 10 5 0 awareness availed
LIC ICICI

The analysis shows that of all the respondents 12% are aware of LICs Annuity Policies and 28% are aware of ICICI s Annuity Policies. Only 2% availed LIC s and 7% have availed ICICIs Policy. This shows that ICICI scored over LIC in annuity plans as most of ICICIs annuity plans are market linked and people buying due to bullish trend in stock market.LIC has no market linked annuity plans.
PROPOSED SCHEME The above topic proposed 1) The summary of the overall project 2) The overall conclusion drawn out while doing this project 3) The policy and recommendation, which we fill to be given for the insurance sector.

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Why private companies are better than LIC?

Following are the reasons given by the respondents for finding private companies better than LIC. 1. Better customer care 2. Higher level of professionalism 3. Better service 4. Easily approachable 5. Better use of technology 6. Less delays in claim settlement 7. Less bureaucracy Almost all the people haven't yet experience the services of private companies, so the above analysis reflects the expectations of the customers from the private companies vis-a-vis LIC. Most of them expect private companies to provide better service and customer care than LIC. Also, absence of bureaucracy will make private companies more efficient and effective.

1. Dissatisfactions with LIC

The policyholders of LIC have expressed the following dissatisfactions 1. Bad customer care 2. Poor service at times 3. Bureaucratic hurdles 4. Delays in front-end operations 5. Works as a typical government organization More or less the dissatisfactions of the customers are related to the customer care and service standards of LIC. GNIT-MS Page 82

Around 18% of the respondents were found disgusted and dissatisfied with LIC.

Future expectations from LIC

The respondents expressed the following expectations and the changes they wish to see in LIC in the era of Privatization. 1. Higher levels of professionalism 2. Better use of technology 3. Less delays in claim settlement 4. Less bureaucracy 5. Privatization of LIC 6. Competitive returns to policy holders 7. Low premiums 8. Stay as it is 9. Improves service standards. In spite of giving so many suggestions regarding expected changes in LIC, almost 30% of respondent wanted LIC to stay as it is at present. Around 30% of the respondents are extremely satisfied with the LIC while 18% expressed high level of dissatisfaction with LIC.

Some facts about the respondents

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1. 2. 3.

Average no. of members in a family Average no. of lives insured in a family Average no. of policies held by a family

4.6 3.8 6.4

Percentage of life insurance policies sold by agents in Asian countries 100 98 96 94 Percentage 92 90 88 86 84
Series1 India 100 Japan 100 Taiwan 99 Malaysia 93 Singapore 90

100

100

99

93 90

Country

RESEARCH METHODOLOGY
Research Methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by researcher in studying his research problem along with logic behind them. It is necessary for the researcher to know not only the research methods/techniques but also the GNIT-MS Page 84

methodology. Researchers also need to understand the assumptions underlying various techniques and they need to know the criteria by which the can decide that certain techniques and procedures will be applicable to certain problems and other will not. We use a particular method of research in the context of our research study and explain why we are using a particular method or technique and why we are not using other so that research results are capable o being evaluated either by the researcher himself or by others.

Research :
Research is a scientific and systematic search for pertinent information on a specific topic. According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data, making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis.

Research Design:
A research design is purely and simply the framework or plan for study that guides the collection and analysis of data. Application and specification are the main characteristics in a research designs can be classified on the basis of the fundamental objectives of the research. There are mainly two types of research design. a. b. Exploratory Conclusive

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1. 2. descriptive.

Descriptive Experimental

Since our research is descriptive type, so research design is also

Sampling Design :
Sampling is a process of obtaining information about an entire population by examining only a part of it. variety of reasons such as: i. ii. iii. iv. Sampling can save time and money. Sampling may enable more accurate measurements. Sampling remains the only way when populations contain infinitely many members. Sampling only remains the only choice when a test involves the destruction of the item under study. Sampling methods can be divided into two. 1. Probability Sampling 2. Non-probability Sampling In my research probability sampling is used. Again in probability sampling, simple random sampling is used. This sampling is stratified system. Sampling is used for a

Data Collection Method:

Data collection methods are generally of two types: a. Primary Data GNIT-MS Page 86

b. Secondary Data Primary data are those which are collected a fresh and for the first time and thus happens to be original in character. The primary data is collected in the process of questionnaire and interview of the outlets. Secondary data are those which have already been collected by someone else and which have been already been passed through the statistical process. In my research the secondary data is collected from the company sales records and from research reports.

Tools and Techniques:

Primary Data : Questionnaire and Personal Interview. Secondary Data : Company sales record and other

Research reports.

. Sampling Plan:
All the resident of Ghaziabad City.

Target Population Or Universe :

Sampling Unit

: Any Insurance policy of who works with any insurance company

Sampling Size Sampling Method GNIT-MS

: :

Around 100 people Judgment and Page 87

Convenience. Sampling Area City. : Study shall cover Ghaziabad

Interpretation of the Report :

After the data have been collected I turn to the task of analyzing them. The analysis of the data is done by the guidance of the faculty member of the institute. The data are analyzed by graphical and tabular form. After the analysis the results are find out. Then the personal recommendation is given. After all the conclusion is given.

FINDINGS
The current scenario indicates a failure to create a market for insurance products where 33% of LIC policies were sold for tax benefits under Section 88 of IT Act, which is expected to reverse after the arrival of the private players. In the first year of operation, in Life, ICICI Prudential has emerged as the front-runner with the sales of 1, 00,000 policies and premium collection of Rs. 112 crore from underwriting Rs. 2700 crore of business. Delhi s Max New York life is in place with 43 crore premium income from risk products received on 64000 whole life policies and HDFC Standard Life at third place with having sold 32000 policies with premi7um income of Rs. 36 crore on a business portfolio of Rs. 1266 crore. GNIT-MS Page 88

Though the performance of new players is impressive, Life Insurance Corporation of India sold 72 lakh policies for a Sum assured of Rs. 62,499 crore with the First Premium Income of Rs. 3021 crore in the month of March 2005-06, recording a growth rate of 15.78% in number of Policies, 41.68% in Sum Assured and 51.51% in First Premium Income. This is a record business done by the Corporation in the month of March-Ever Best Performance in March. For the year 2005-2006, the Corporation has widened its reach by providing insurance 2,45,29,946 policies with a sum Assured of Rs. 1,79,683 crore and Premium Income of Rs. 9,688.87 crore, registering the annualized growth of 10.75% on policies, 20.00% on sum Assured and 24.41% on Premium Income over the period of last two years. The Product strategy of the new players is to offer limited no. of products with a large number of adds on which increases the Product customization and hence customer value and risk of the players through diversified product portfolio.

PUBLIC FRONT
LIC in an effort to retain its competitive edge has revamped its service by networking all the branches and improving information available to policyholders through its website and tie-ups with the Internet companies. The marketing strategy by the LIC not being focused on Risk Products claims an advantage for the private players; in turn LIC has improved its Product Management by withdrawing many high guaranteed return products and re launching them at lower guaranteed returns in view of the falling rates of interests. As is typical with monopolies, the premium rates charged by LIC are among the highest in the world, and its track record in customer service can at best be called shabby. With a huge unionized, rigid workforce mostly in the clerical category, LIC runs the risk of high GNIT-MS Page 89

fixed cost, which will be the deciding factor in Productivity in the competitive scenario While boasting full-scale automation of its operation, the truth is that its technology is outdated. The new players, with the state-of-the art technology under their belt, will be in advantageous position. 80% of LICs business is procured by 20% of its ill-trained agent force. LICs lions share of the market lies in the rural India, which the foreign players have not been able to focus on. Since LIFE Insurance is a predominant Long term intangible product the companys product repuration, and the sales approach offer significant opportunities for differentiation but the product range available would be a constraining factor which points to a need for a complete line of products in the particular segment that the company is focusing on. LIC has also reduced the guaranteed interest on a number of policies, Jeevan Suraksha, Jeevan Sneha, Jeevan Akshya, Bima nivesh and Jeevan shree.

Private Front:
With the opening of the Insurance sector to private players, there are 12 new entrants in the Life sector and 6 in the Non life sector The Indian insurance sector presents opportunity for growth as penetration is very low and premiums as a percentage of GDP is only 2.61% compared to 15.78% for U.K. to 10.92% for Japan and 8.76 for US. The foreign player. With the domestic partner s string brand value, can test the unconventional distribution partners like brokers, the internet, the banking distribution system, etc. domestic foreign players may be tempted to keep their operation in the big company creamy layer of the society. GNIT-MS Page 90

In the life insurance sector, ICICI Prudential has captured 38% of the private life insurance market, leaving the rest for the remaining 10 players. IRDA figures up to February 06 show that players like Birla Sun Life insurance and Tata AIG Life Insurance are all vying for the top five positions.

Recommendations & Suggestions

As far the products of both public & private sectors are concerned, no one is one the losing edge, yet they differ in their market share. The reason being the consume perception about the public and private sectors and the marketing strategies of the companies. Some suggestions and recommendations regarding the marketing strategies are as follows: Greater market Penetration: As far as the private companies are concerned they should emphasize on the rural market as well, which bears more wealth than urban sector. LIC has deep roots in the rural India and therefore it has a large market share. Greater mass Appeal: The companies should have greater mass appeal by effective advertising as done by ICICI Prulife, which has a greater impact on the mass. GNIT-MS Page 91

Proper Market Segmentation: The opportunity to segment the market in terms of Geography, demographics, Psychographics and needs is tremendous. The very nature of an insurance product encourages mass marketing rather focus which points to the need to define ones Long Term Product Market Focus and positioning for sustainable competitive advantage.

Emphasizing on risk factors : The marketing strategies of the new players in the Life sector is on offering products which have been properly marketed by LIC i.e., Max New York Life s focus on Risk products, ICICI Prulife focus on pension and Term Insurance Products with 40% business from new products such as Unit Linked.

Customer Orientation : After the advent of the private players in the Indian market, LIC ahs improved a lot in terms of customer orientation several claims where are pending from a longer period have been settled so far As pending records in the year 2004-2005 the no. of claims settles were 87,97 lakhs which amounted the sum of 14519.25 crores. Giving the following slogan.

LIC settles one Claim in less than one Second Marketing a limited no. of products The Product strategies of the new players is to offer limited number of product customization value and reduces the Marketing costs and Risk of the players through diversified product portfolio.

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CONCLUSION
On the basis of the data collected it can be conclude that private companies have posed a challenge of the public sector. It all has been possible because of the effective marketing strategies and product innovation of the private players. Though LIC still enjoys a huge market share of about 90%, still it has been estimated by eminent economists that by the year 2008 it can loose a share less than 50%. Since the private insurance companies have not penetrated the rural market therefore they are not in a position to acquire the wellGNIT-MS Page 93

established market of LIC with that much ease. So in order to take a ride over LIC, they should emphasize on the rural sector as well. Both HDFC Standard Life Insurance and ICICI Prudential entered the market nearly in the same year yet, ICICI Prudential got the advantage of its product innovational and apt marketing strategy which included the product promotion on a mass scale through media advertising and well-trained sales force. The need for Life Insurance is to cover 3 contingencies i.e., Contingency of Death, Old Age And Critical illness & Disability However, Life Insurance in India has traditionally been bought for tax benefits and as an investment product which creates a greats opportunity to develop the market. India has a Life Insurance penetration of less than 40% of the population and premium which is 2 % of GDP averaging $5 per capital compared to above $3000 for Japan and USA. Thus the opportunity to segment the market in terms of geography, Demographics, Psychographics and needs in tremendous. The private sector has emerged very fast on the success charts in respect to pension policies in which ICICI Prudential alone claims a 73% of the local private insurance market and nearly 24% of the total market. The next being insurance is Max New York Life followed by HDFC Standard leaving the rest market remaining companies.

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LIMITATION OF THE STUDY

No study is generally full proof; this report suffers from certain limitation with respect to information and analysis. The reason for the above are related to: It was difficult to get appointment from the person whom I know because of their busy schedule. Since the project had to be submitted within seven weeks and within this time period its very difficult to convert.

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Since the study involved a through analysis of the insurance market and relative study of various players offering the similar products and that of similar, it was required a dedicated labor in term of both time and effort. Since the curriculum did not permit more time, the study had to be very limited.

Questionnaire

Name Occupation 1. 2. a) Yes a) LIC c) HDFC If no GNIT-MS

: : [ [ ] [ ] Do you have any Insurance policy?

Age Income b) No. [

: : [ ] [ ] ]

If yes in which insurance company you have your policy? b) ICICI ] d) Birla Sun life

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Why................................... 3. Reasons for purchasing life Insurance Policy? a) To cover life risk b) To save tax c) To invest saving d) To meet income need after retirement[ e) any other 4. a) Life risk cover b) Medical claim facility provides. c) Family requirements fulfilled after death Of earning hand. d) Loan Facility. e) Returns after the specific period aids to The income. f) All the above 5. Which according to you is better insurance company? a) LIC c) HDFC 6. [ ] [ b) ICICI ] [ ] ] d) Birla Sun life [ [ [ ] ] [ ] [ ] [ [ [ ] [ [ [ ] ] ] ] ] ]

What benefit you feel for purchasing insurance policy?

What are the reasons behind your choice of insurance company? a) Better Services b) Better Plans c) Better Returns d) Better Pension plan and other schemes [ e) Better goodwill [ [ ] ] [] [ ] ]

7.

Which sector you feel better for insurance sector? Page 97

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a) Public 8.

b) Private

Do you feel that government should take proper measures to increase the promotion of life insurance? a) Yes [ ] b) No [ ]

9.

In which insurance Company you would like to invest in near future? a) LIC c) HDFC [ ] [ b) ICICI ] [ ] ] d) Birla Sun life [

10.

What benefits you feel from taking a life insurance policy (20 words)? ...................................................................................................... ..........................................................................

BIBILIOGRAPHY

Insurance : Principles and Practice by M.N. Misra Insurance Marketing by G.N. Bajpai. Page 98

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Life Insurance Corporation of India -The Diary. Business Today Marketing Management by Philip Kotler www.iciciprulife.com www.hdfcinsurance.com www.licindia.com

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