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Some insurance policies cover groups of people, ranging from a few to thousands of individuals. These policies usually are issued to employers for the benefit of their employees or to unions, professional associations, or other are group life and health plans. Insurance carriers also underwrite a variety of specialized types of insurance, such as real-estate title insurance, employee surety and fidelity bonding, and medical malpractice insurance. A relatively recent act of Congress allows insurance carriers and other financial institutions, such as banks and securities firms, to sell one anothers products. As a result, more insurance carriers now sell financial products such as securities, mutual funds, and various retirement plans. This approach is most common in life insurance companies that already sell annuities; however, property and casualty companies also are increasingly selling a wider range of financial products. In order to expand into one anothers markets, insurance carriers, banks, and securities firms have engaged in numerous mergers, allowing the merging companies access to each other's client base and geographical markets. Insurance carriers have discovered that the Internet can be a powerful tool for reaching potential and existing customers. Most carriers use the Internet simply to post company information, such as sales brochures and product information, financial statements, and a list of local agents. However, an increasing number of carriers are starting to expand their websites to enable customers to access online account and billing information, and a few carriers even allow claims to be submitted online. Some carriers also provide insurance quotes online based on the information submitted by customers on their Internet sites. In the future, carriers will allow customers to purchase policies through the Internet without ever speaking to a live agent. In addition to individual carrier-sponsored Internet sites, several lead-generating sites have emerged. These sites allow potential customers to input information about their insurance policy needs. For a fee, the sites forward customer information to a number of insurance companies, which review the information and, if they decide to take on the policy, contact the customer with an offer. This practice gives consumers the freedom to accept the best rate. The insurance industry also includes a number of independent organizations that provide a wide array of insurance-related services to carriers and their clients. One such service is the processing of claims forms for medical practitioners. Other services include loss prevention and risk management. Also, insurance companies sometimes hire independent claims adjusters to investigate accidents and claims for property damage and to assign a dollar estimate to the claim. Other organizations in the industry are formed by groups of insurance companies, to perform functions that would result in a duplication of effort if each company carried them out individually. For example, service organizations are supported by insurance companies to provide loss statistics, which the companies use to set their rates.
Insurance is desired to safeguard oneself and one's family against possible losses on account of risks and perils. It provides financial compensation for the losses suffered due to the happening of any unforeseen events. By taking life insurance a person can have peace of mind and need not worry about the financial consequences in case of any untimely death. Certain Insurance contracts are also made compulsory by legislation. For example, Motor Vehicles Act 1988, stipulates that a person driving a vehicle in a public place should hold a valid insurance policy covering "Act" risks. Another example of compulsory insurance pertains to the Environmental Protection Act, wherein a person using or carrying hazardous substances (as defined in the Act) must hold a valid public liability (Act) policy.
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through Intermediaries. 2. Complete a proposal form giving full details. 3. Submit Date of Birth Certificate and other relevant documents. Insurance contracts are based on good faith i.e. the details furnished by the proposer are accepted in good faith and this will form the basis of the contract.
Life Insurance
Life insurance is a critical part of your long term financial planning. Every person with dependents should have life insurance. 6
Life Insurance is particularly important if you are the sole breadwinner for your family. The loss of you and your income could devastate your family. Life insurance will ensure that if anything happens to you, your loved ones will be able to manage financially. But don't ignore life insurance if you are the 'stay-at-home' spouse. Your value to the family will include child care and many other functions which will potentially become 'paid' functions if you are gone. While called "life insurance," what you are being insured against is your death. The benefit (in most life insurance policies) will only be paid out if you die. Some life insurance policies accumulate a cash value - and this would be the only exception in which you could receive a 'benefit' from a life insurance policy without dying. However, the cash value is many times less than the death benefit, and life insurance is (in fact) a savings plan and insurance rolled into one. Many life insurance policies carry restrictions around the circumstances of your death. Usually if you commit suicide your loved ones will not receive any death benefits (This is one area where "cashing in your chips" won't leave you with a big bank roll).
In addition, funerals are expensive. An average funeral can set you back between $8,000 and $10,000 considering the funeral home services, casket, burial plot and headstone. This is part of what you want to insure yourself against. You can bundle in these costs when you consider a life insurance policy's total benefit amount that you insure yourself for. While you can buy life insurance policies which are a small amount suitable only to cover funeral costs, you will generally need much more life insurance than that. Many of these life insurance policies look good because of low prices, but you have to look closely. For the dollar amount of coverage you get, it is generally a more expensive life insurance policy. Some people who are single or have no dependents might want to consider 'funeral coverage' only. For the rest of us, we should be looking at more substantial life insurance.
Life Insurance - How do I decide what I need? This is a big question. In general, most financial planners will say that you should have life insurance equal to at least 5 times your annual salary. Some folks with more dependents (older parents, children and spouse) may need more life insurance. Other financial planners say that you should look at the total amount of income that you want to replace between now and retirement. While the numbers can be big and scary if you are young, your actual life insurance needs will decrease over time. Let's look at an example. If I'm 25 and make $35,000 a year and I want to replace the income I'd make between now and retirement age, I'd be looking at life insurance for $848,000. Whew! Well, there are a number of concerns with that: 1. First and foremost, can I afford the premium?
2. At this age, you may be able to. The risk to a life insurance company is low. 3. Does my spouse work? 4. If my spouse does work I may not have to replace my total salary. 5. If I have a stay-at-home spouse, would they consider going back to work after a certain period? If you think your spouse may want to retrain for another career you may actually need to consider more money. Or perhaps, if the total amount of the life insurance policy paid out the mortgage and put some money in the bank, your spouse could return to the workforce on a part-time basis. 6. Am I trying to leave my family 'set for life' or am I trying to get them over a tough time? 7. This is entirely up to you. Balance it out against the amount of the life insurance premium. These are questions which must be considered. At a minimum, your life insurance coverage should: Fully pay out your mortgage Fully pay for funeral costs Allow for supplementary childcare for at least 2 years (if you have children) Fully pay out any other debts, like car loans, outstanding bills from credit cards or utilities, etc Leave a little something in the bank for emergencies Does 5 times your salary meet these requirements? Great. If not, you might have to consider up to 8 times your salary. Then consider all the factors which might affect your spouse's ability to handle the situation - perhaps you've died in an accident in which they
were hurt too, or perhaps you have a family of 9 children and your spouse couldn't return to work - and add additional money as required.
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developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.
Insurance industries in India have a long history. Life Insurance in existing form came in India from UK in 1818 with Oriental Life Insurance Company. The Indian Life Assurance companies Act, 1912 was the first measure to regulate Life Insurance business. Later in 1928 the Indian Insurance Companies act was enacted, which was amended in 1938. Finally Government of India in 1950 again amended this act. Life Insurance Corporation of India was formed in September 1956 by passing LIC Act, 1956 in Indian parliament.
The first general insurance company- Sun Insurance Office Ltd. was established in Calcutta in the year 1710. General Insurance business in India was nationalized with effect from 1.1.73 by the General Insurance Business Act. from 1973, The General Insurance Company (GIC) as a holding company divided in four subsidiaries as:
National Insurance Company Ltd., The New India Assurance Company Ltd. The Oriental Insurance Company Ltd. The United India Insurance Company Ltd.
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Liberalization and reforms have the potential to change the complexion of an industry. The Indian insurance sector is no exception. Until recently, India continued to be one of the few remaining countries of the world to remain insulated from the foreign direct investment in its insurance sector. In a bid to make this sector more competitive the government constituted an eight-member committee chaired by Mr. R N Malhotra in 1993. The committee took a year to submit its report. The main thrust of its recommendations was:
Open up the insurance sector Improve the service standards of Indian insurance majors Extend insurance coverage to a larger section of the Indian population.
The benefits of liberalization of Indian insurance sector were deemed to be that reforms would lead to:
A competitive environment World-class sophisticated technology Better & wider range of products with more reasonable & affordable pricing Price war, leading to competitive pricing of the products Efficient & effective service Efficiency in the conduct of insurance business Global expertise & practices of insurance
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New entrants with a professional approach & state of art technology to revolutionize the market Services of intermediaries like corporate agents, brokers etc Malhotra Committee, in its report stated that only 22% of the Indian population is insured. The poor reach of insurance in the country and the sheer numbers make India a market with tremendous potential. The following facts show how under-developed the Indian insurance business is due to state monopoly and lack of aggressive marketing of insurance policies: Per capita insurance premium in India is a mere US$ 6, one of the lowest in the world. In South Korea, the corresponding figure is US$1,338, in USA it is $ 2250 and in UK it is $1589. Insurance premium in India accounts for a mere 2 per cent of GDP compared to the world average of 7.8 per cent and G-7 average of 9.2 per cent. Insurance premium as a percentage of savings is barely 5.95 per cent in India compared to 52.5 per cent in the UK. Nationalized insurance companies have not been able to target niche markets that are currently served poorly or not at all. Life insurance products provide a good example. They compete with investment and savings options like mutual funds. It is imperative that they should offer comparable returns and flexibility. For instance, pure protection products like term assurance account for up to 20 per cent of policies sold in developed countries. In India, the figure is less than one percent because policies are inflexible. Besides, no Indian life assurance product is linked to non-traditional investment avenues
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such as stock market indices. Therefore, returns are lower than those on other savings instruments. Retail segment or personal lines insurance, especially in general insurance is another area unexplored. Currently personal insurance, including health, householders, shopkeepers, personal accident, travel insurance and professional indemnity covers, constitute only 12 per cent of Indian general insurance premium. This poor figure is largely due to the lack of adequate distribution channels rather than a lack of products. By tapping such underserved niches, new entrants can expand the market substantially. Since service and speed will be valued, a price premium is also possible. Keeping in mind the problems that ensnared LIC & GIC, the Malhotra Committee Report recommended the end of monopoly market in insurance.
This recommendation was implemented with the passage of Insurance Regulatory Development Act (IRDA) through Indian Parliament in late 1999.
Due to this Act the private players were allowed to enter the market from 1999. Several Indian private companies have entered into the insurance market, and some companies have joined with foreign partners. After the passage of this Act, with effect from December 2000, all the four subsidiaries of GIC have been de-linked from the parent company and have been made independent insurance companies. GIC now functions as a National Reinsurer.
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IRDA, for the time being, prohibits 100% foreign equity in insurance. It requires the Indian promoter to invest either wholly in an insurance venture or team up with a foreign insurer, with a cap of 26% of equity for a foreign partner.
Since the opening up of Insurance Sector, 12 private players have entered the Life Insurance sector & 9 private players have entered the general insurance sector.
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THE REGULATORS
Under the Insurance Regulatory Development Act, Insurance Regulatory & Development Authority (IRDA) was formed which acts as the regulatory authority in the insurance sector. The main aim of the Act is to activate an insurance regulatory apparatus essential for proper monitoring and control of the Insurance industry. TAC is a Statutory Body under Insurance Act 1938. Tariff Advisory Committee controls and regulates the rates, advantages, terms and conditions that may be offered by insurers in respect of General Insurance Business relating to Fire, Marine (Hull), Motor, Engineering and Workmen Compensation.
Liberalization Scenario in India Recent economic liberalization started few years ago have started bringing in new investments from global giants and the government was hard pressed to facilitate global integration by lowering trade barriers for the free flow of technology, intellectual and financial capital. Additionally, reforms are essential if the Indian economy is to achieve and sustain a growth rate of 7 to 8 per cent per annum. Reaching a faster growth path also implies attracting foreign direct investment inflows of $ 10 Billion every year, up from the current level of $ 3 to $ 3.5 Billion. Thus liberalization of insurance creates an environment for the generation of long-term contractual funds for infrastructural investments.
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Nationalized Sectors Performance In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum and for General insurance business it has been 17 per cent per annum. However, there is other side of the coin too. Their large scale of operations, public sector bureaucracies and cumbersome procedures hampers nationalized insurers. The field staff and the agents of the GIC and its four wholly owned subsidiary companies have seldom bothered to venture out into the rural hinterland to sell crop or any other personal line insurance. The domestic insurance companies, despite meeting their social objectives of going into the deepest interiors of the country, have lagged behind in meeting customer expectations in products and services.
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consultant which can provide them broad terms of reference on what changes are required to tackle the impending competition. GIC has already identified the areas that need to be activated and given a shape through the four subsidiary companies. Foremost is the area of providing health insurance services. A change in the GIC Act will enable the corporation to float a joint venture company for health insurance. Other areas that the GIC is looking at are savings-linked insurance products and use of alternate distribution channels including bancassurance. Also in progress is the co-ordination of all foreign operations of the group. The PSU companies have offered VRS to their employees in an effort to reduce the manpower cost & to make their operations more effective.
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distribution channels. At this point, buyers look for low price. Brand loyalty could shift from the insurer to the seller. In other markets, notably Europe, this has resulted in bancassurance: banks entering the insurance business. The Netherlands led with financial services firms providing an entire range of products including bank accounts, motor, home and life insurance, and pensions. Other European markets have followed suit. In France over half of all life insurance sales are made through banks. In the UK, almost 95% of banks and building societies are distributing insurance products today. In India too, banks hope to maximize expensive existing networks by selling a range of products. Various seminars and conferences on bancassurance are taking place and many bankers have clearly shown their inclination to enter insurance market by leveraging their strengths in the areas of brand image, distribution network, face to face contact with the clients and telemarketing coupled with advanced information technology systems.
Problems
Consumer awareness level is still off the mark. According to the recently conducted FICCI survey on the Present State of Indian insurance industry, a copy of which is available with all of you, the awareness levels regarding Insurance are still in the realm of medium to low. This clearly indicates the onerous task that companies have in creating awareness about "need to Insure" and also tremendous potential they have in expanding the markets by getting more customers in their fold by increasing awareness levels.
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Insurers in India should also explore distribution through non-financial organizations. For example, insurance for consumer items such as refrigerators can be offered at the point of sale. This piggybacks on an existing distribution channel and increases the likelihood of insurance sales. Alliances with manufacturers or retailers of consumer goods will be possible. With increasing competition, they are wooing customers with various incentives, of which insurance can be one. Another potential channel that reduces the need for an owned distribution network is worksite marketing. Insurers will be able to market pensions, health insurance and even other general covers through employers to their employees. These products may be purchased by the employer or simply marketed at the workplace with the employers cooperation. Finally, some potential Indian entrants into insurance hope to ride their existing distribution networks and customer bases. For example, financial organizations like ICICI, HDFC or Kotak Mahindra intend to tap the thousands of customers who already buy their deposits, consumer loans or housing finance. Other hopeful entrants anticipate specific alliances such as with hospitals to provide health cover.
International Experience
Cross-country experience shows that nowhere in the world has the entry of foreign firms threatened the position of domestic companies. Whether it is Malaysia, where the insurance sector has been open for more than 50 years and foreign companies account for about 10 per cent of market penetration or it is Indonesia, Thailand, China or the Philippines, where the market has been opened more recently, the total market share of foreign companies is less than 10 per cent except in Indonesia where it is about 20 per 21
cent. Closer home, we have the experience of the banking sector where despite the presence of 42 foreign banks, their share in total banking assets is less than 10 per cent. Today hardly 20 per cent of the population in India is insured and insurance premium (life as well as non-life) account for just 2 per cent of GDP as against the G-7 average of 9.2 per cent. Consequently, the fear that new companies will displace public companies is misplaced. There is room for more for not only the existing companies but also for any number of competitors.
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Professionals, statisticians and even medical professionals. Apart from this, there will be high demand for professionals in the streams like Underwriting and claims management and actuarial sciences. The structure of an insurance company, generally, comprises the Operating Department, Administrative Department and the Finance Department. The Operating Department generally performs the basic functions pertaining to the designing of products, marketing thereof, servicing the insured, management of portfolio, etc. The Administrative Department looks after the day to day affairs of the company. The Finance Department backs the operations and administration of the company by accounting for the transactions, streamlining the flow of funds, materializing the management decisions, etc. The Administration Department as well as the Finance Department, usually, functions through in-house setup. The Finance Department functions in the areas of accounting, financial and management reporting, budgeting and controlling, etc. and thus renders enormous scope for professionals. Over the past three years, around 40 companies have expressed interest in entering the sector and many foreign and Indian companies have arranged anticipatory alliances. The threat of new players taking over the market has been overplayed. As is witnessed in other countries where liberalization took place in recent years we can safely conclude that nationalized players will continue to hold strong market share positions, but there will be enough business for new entrants to be profitable. Opening up the sector will certainly mean new products, better packaging and improved customer service. Both new and existing players will have to explore new distribution 23
and marketing channels. Potential buyers for most of this insurance lie in the middle class. New insurers must segment the market carefully to arrive at appropriate products and pricing. Recognizing the potential, in the past three years, the nationalized insurers have already begun to target niches like pensions, women or children.
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Marketing as we know deals with all those processes required to put the products in the hands of the ultimate consumer. Philip Kotler, considered by many as the Marketing Guru of our times gives a pithy definition on marketing thus:' Marketing is the delivery of customer satisfaction at a profit.' Thus one of the essential parameters that judge the effectiveness of marketing exercise is the effect it has on the organization's bottom line.
The steps involved in marketing processes are brought out by the study of four critical parameters, which are the famous 4P's. i.e. Price, Place, Product and Promotion.
A Company or an organization coming with a product offer, has to design an appropriate mix of these four parameter consistent within its standing in the market. Typically the importance of each of these parameter vary in importance depending on the nature of the product, nature of the market and the size of the company.
For instance while product issue forms the important deciding factor in the purchase of commodities and manufactured goods promotion is of key importance in Fast Moving Consumer Goods marketing. The four parameters also take on different intensities depending on which stage of the product life cycle the product is in.
Accordingly the marketing process could take a product centric view, a customer centric view or as is happening these days it could be taken on as a organizational philosophy
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In order to link the marketing process to Insurance products, first it has to be seen in the broader context of financial services marketing and also the regulatory environment that is in place. Financial services whether its Banking, or Investments, Life Insurance, General Insurance, though target separate need base, have the services component connecting them.
Services being intangible the four aspects of the marketing mix discussed above, which are developed for product centric markets, do not find the same level of application and thus needs a fresh perspective to be developed in relation to services marketing. Theories have evolved over time in this direction first by identifying the aspects of services marketing and then providing solutions for this line of marketing, which existing insurance policies may provide cover?
Services have some unique features separating itself from traditional product marketing:
They are intangible, there is nothing physical so consumers do not have any way to actually take a test drive or in any way get a feel about the product before its purchase.
The services are inseparable from the product itself. Here the product is produced and
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consumed in the same instance and requires the presence of the end customer.
It is heterogeneous and quality control is difficult where the quality of the service is dependent on the quality of the service provider.
The product differentiation is minimum with in a category of product say in Banking or Investment etc; Added to this the customer more often relies on hope of appreciation of his investments or safe return of his deposits with the promised yield. The kind of trusteeship found in all financial services makes the companies all the more responsible in handling the hopes of their consumers. Also the regulatory environment plays a crucial role in marketing of financial products. There are restrictions on the content of admessages so as to ensure that customers are not taken for a ride by unscrupulous elements, which unfortunately are not hard to find in this sector.
The very nature of the contract puts the insured at a vantage position as to the information regarding risk element one is exposed to. Owing to this insurance contracts are sourced through an intermediary, an agent in this case who is expected to have better knowledge of the person or the risk in question. Insurance companies rely on the report of its agents in its decision to acceptance or otherwise and in premium setting for the risk in question. A reason why many lines of insurance are not available off the shelf.
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Even as this is the case, Insurance contracts especially those in life insurance are typically sold rather than bought. The reason being that there in no adequate appreciation of the concept of insurance, which seeks to indemnify/ compensate the insured for financial loss suffered on account of an accidental event. Typically life insurance policies are compared with bank fixed deposits or mutual funds, and are shown in poor light for their poor returns. One fails to appreciate that the need base differs when one is taking up a life insurance policy. Most of the plans while offering decent returns offer life covers that are a unique feature compared to other financial products.
Insurance companies have been countering their poor image by coming out with innovate features like unit-linked schemes, which offer more of a saving component and less of a risk component. Also there are various tax incentives provided by the government for investments into life insurance plans, to encourage the habit of buying insurance.
Also there is strict regulatory compliances to be compiled with while selling insurance products. For instance there is that provision of Section 41 of the Insurance Act, 1938, which prohibits offer of rebates in any kind from the premium monies by the intermediaries in their efforts to source business for insurance companies. The advertising code as prescribed by the regulator, the IRDA, requires to be clearly worded in their admessage.
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Typically the entire business in life insurance and a huge proportion of business in nonlife insurance is sourced through agents of insurance companies. New intermediary options are being broached including an option of disintermediation in certain lines of business. The new distribution alternatives include the brokers, who act on behalf of the customers and advice of best-suited policies and banks.
The general integration of different classes of financial services has created a large opportunity for banks to enter in to the insurance sector. The branch network and the high relationships maintained with its clientele is being put to good use while marketing insurance products. A new alternative like selling insurance over the net is also catching up. Insurance companies are opting for disintermediation in certain lines of business aimed at corporates, where highly specialized knowledge on risk analysis is called for.
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RESEARCH METHODOLOG Y
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RESEARCH OBJECTIVES
1. Familiarization with the insurance concepts and insurance industry in India. 2. Collection of database from Working Individuals through a questionnaire. 3. Analysis and interpretation of data. 4. Reaching at conclusions and suggestions based on analysis.
RESEARCH DESIGN
According to Green and Tull: A research design is the specification of methods and procedures for acquiring the information needed. It is he
overall operational pattern or framework of the project that stipulates which information is to be collected from which sources by what procedures.
Sample: Due to time and resource constraints, the sample of the study is taken as one and the technique of sampling adopted is: convenient sampling. 31
1. Primary Sources Questionnaire 2.Secondary sources Internet Brochures, Pamphlets Sample Size 200 people in NCR
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Selected only 200 respondents due to time constraint, which might have led to several sample errors. Study is restricted to NCR, which might not give the national picture. The duration of time for the study was limited & hence a comprehensive & elaborate study could not be undertaken. Rural areas could not be touched during the study, which have huge potential for life Insurance exists.
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COMPANY PROFILE
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Primary Data: For the purpose of collecting primary data, the researcher has adopted the method of survey. Survey can be telephonic, by mail personal and by the diary. For the purpose of collected detailed information, researcher has chosen surveys based on
OVERVIEW
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential's equity base stands at Rs. 2602 crore with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April 30, 2007 to July 31, 2007, the company garnered Rs 1415 crore of weighted retail + group new business premiums and wrote over 5 million relail policies. The company has a assets held to the tune of over Rs 20,000 crore. For the past six years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. The vision of ICICI PRUDENTIAL: To make ICICI Prudential the dominant Life and Pensions player built on trust by worldclass people and service.
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Understanding the needs of customers and offering them superior products and service
Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders
Providing an enabling environment to foster growth and learning for our employees
The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the way we work.
We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.
MANAGEMENT
Board of Director The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad.
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Mr. K.V. Kamath, Chairman Mr. Barry stowe Mrs. Keki Dadiseth Mrs. Kalpana Morparia Mrs. Chanda Kochhar Mr. HT Phong Mr. M.P. Modi Mr. R Narayanan Ms. Shikha Sharma, Managing Director Mr. N.S. Kannan, Executive Director Management Team Ms. Shikha Sharma, Managing Director & CEO Mr. N.S. Kannan, Executive Director Mr. Azim Mithani, Chief - Actuary Mr. Bhargav Dasgupta, Executive Director Ms. Anita Pai, Chief - Customer Service and Operations Mr. Puneet Nanda, Chief Investments ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).
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ICICI Prudentials equity base stands at Rs. 2602 crore with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April 30 to July 31, 2007, the company garnered Rs 1415 crore of weighted retail + group new business premiums and wrote over 5 million retail policies. For the past six years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. To know more about the company, please visit www.iciciprulife.com. ICICI Prudential is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA ( Ind ) from Fitch ratings. The AAA rating is the highest credit rating, and is a clear assurance of ICICI Prudentials ability to meet its obligations to customers at the time of maturity or claims. DISTRIBUTION ICICI Prudential has one of the largest distribution networks amongst private life insurers in India, having commenced operations in over 116 cities and towns in India, stretching from Bhuj in the west to Guwahati in the east, and Amritsar in the north to Trivandrum in the south. The company has 23 bancassurance tie-ups, having agreements with ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Ernakulam Bank, Lord Krishna Bank and some co-operative banks, as well as about 680 corporate agents and brokers. It has also tied up with NGOs, MFIs and corporates for the distribution of rural policies and organisations
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like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically underprivileged sections of society. ICICI Prudential has recruited and trained more than 235,000 insurance advisors to interface with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers. PRODUCTS Insurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 7 riders, to create a customized solution for each policyholder. Savings Solutions
SecurePlus is a transparent and feature-packed savings plan that offers 3 levels of protection.
CashPlus is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options.
SavenProtect is a traditional endowment savings plan that offers life protection along with adequate returns.
CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a childs marriage, expenses for a childs higher education or purchase of an asset.
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LifeTime & LifeTimeII offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options ? Preserver, Protector, Balancer and Maximiser.
LifeLink II is a single premium Market Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market.
Premier Life is a limited premium paying plan that offers customers life insurance cover till the age of 75.
InvestShield Life is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest.
InvestShield Cash is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with flexible liquidity options.
InvestShield Gold is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with limited premium payment terms.
Protection Solutions
LifeGuard is a protection plan, which offers life cover at very low cost. It is available in 3 options ? level term assurance, level term assurance with return of premium and single premium.
HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.
Child Plans
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Smart Kid education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the childs life. SmartKid plans are also available in unit-linked form ? both single premium and regular premium.
Retirement Solutions
ForeverLife is a retirement product targeted at individuals in their thirties. SecurePlus Pension is a flexible pension plan that allows one to select between 3 levels of cover.
LifeTime Pension IIis a regular premium market-linked pension plan LifeLink Pension II is a single premium market-linked pension plan. InvestShield Pension is a regular premium pension plan with a capital guarantee on the investible premium and declared bonuses.
Golden Years: is a limited premium paying retirement solution that offers tax benefits up to Rs 100,000 u/s 80C, with flexibility in both the accumulation and payout stages.
ICICI Prudential also launched Salaam Zindagi, a social sector group insurance policy targeted at the economically underprivileged sections of the society.
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Health Solution
Health Assure: Is a regular premium plan which provides l long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses.
Health Assure Plus: Is a regular premium plan which provides long term cover against 6 critical illnesses by providing financial assistance, irrespective of actual medical expenses, as well as an equivalent life insurance cover
Group Insurance Solutions ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees.
ICICI Pru Group Gratuity Plan: ICICI Prus group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations.
ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. Employees have the option of choosing from various annuity
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options or opting for a partial commutation of the annuity at the time of retirement.
ICICI Pru Group Term Plan: ICICI Prus flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.
Flexible Rider Options ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.
Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit.
Accident Benefit: This rider option pays the sum assured under the rider on death due to accident.
Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death.
Income Benefit: This rider pays the 10% of the sum assured to the nominee every year, till maturity, in the event of the death of the life assured. It is available on SmartKid, SecurePlus and CashPlus
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Waiver of Premium: In case of total and permanent disability due to an accident, the premiums are waived till maturity. This rider is available with SecurePlus and CashPlus.
ABOUT THE PROMOTERS ICICI Bank (NYSE:IBN) is India''s second largest bank and largest private sector bank with assets of Rs 3569.32 billion as on June 30, 2007. ICICI Bank provides a broad spectrum of financial services to individuals and companies. This includes mortgages, car and personal loans, credit and debit cards, corporate and agricultural finance. The Bank services a growing customer base of more than 18 million customers through a multichannel access network which includes over 850 branches and extension counters, 3469 ATMs, call centers and Internet banking (www.icicibank.com). Established in London in 1848, Prudential plc, through its businesses in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 20 million customers, policyholder and unit holders worldwide. As of June 30, 2007, the company had over US$3256 billion in funds under management. 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 the leading European life insurance company with a vast network of 24 life and mutual fund operations in twelve countries - China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and
Vietnam.
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1. Our products have been developed after a clear and thorough understanding of
customers' needs. It is this research that helps us develop Education plans that offer the ideal way to truly guarantee your child's education, Retirement solutions that are a hedge against inflation and yet promise a fixed income after you retire, or Health insurance that arms you with the funds you might need to recover from a dreaded disease. 2. Having the right products is the first step, but it's equally important to ensure that our customers can access them easily and quickly. To this end, ICICI Prudential has an advisor base across the length and breadth of the country, and also partners with leading banks, corporate agents and brokers to distribute our products 3. Robust risk management and underwriting practices form the core of our business. With clear guidelines in place, we ensure equitable costing of risks, and thereby ensure a smooth and hassle-free claims process. 4. Entrusted with helping our customers meet their long-term goals, we adopt an investment philosophy that aims to achieve risk adjusted returns over the long-term.
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5. Last but not least, our 10,000+ strong staff is given the opportunity to learn and grow, every day in a multitude of ways. We believe this keeps them engaged and enthusiastic, so that they can deliver on our promise to cover you, at every step in life.
SWOT ANALYSIS
SWOT Analysis is a technique for understanding strengths, weakness, opportunities and threats of an organization. The SWOT Analysis is a technique used for identifying an organizations strengths and weakness and examining the opportunities and threats which the organization is facing.
Strength
weakness
Opportunities
threats
STRENGTHS First private entrant in the market. High brand recognition. Large customer base. WEAKNESSES
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OPPUTUNITIES Huge potential in the market (only 2% population adequately insured). Unexplored areas like rural. Liberal laws of Indian govt. Rising incomes. THREATS Around 14 players, new ones are still coming. Huge acceptability of LIC. Left (CPIM) oppossion to private players.
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COMPANIES VISITED:
S. No. Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Amway India Beehive Systems Cidex Trade Fair CSC Delhi Toyota Escotel EXL HCL BPO Hollostic India Ltd. Idea Cellular Intersolutions Microland Systems NeoMagic Semiconductor NIIT Olive E-Solutions Patni Computers Philips India R Systems Samtech Infonet Schneider Electric Singer Solution Inc. Tele Atlas V Customers Xansa BPO
Address Okhla Phase-II Sector-1, Noida Sarita Vihar Sector-59, Noida Mohan Cooperatives Mohan Cooperatives Sector-58, Noida Sector-58, Noida Sector-58, Noida Mohan Cooperatives Sector-58, Noida Sector-58, Noida Sector-1, Noida Mohan Cooperatives Mohan Cooperatives Sector-59, Noida Mohan Cooperatives Sector-59, Noida Mohan Cooperatives Mohan Cooperatives Mohan Cooperatives Mohan Cooperatives Sector-1, Noida Mohan Cooperatives Sector-1, Noida
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Places Visited: Okhla ( Phase I,II ) Mohan Cooperatives Noida ( Sector- 1,2,58,59 ) Faridabad (Ansal Plaza ) Sarita Vihar
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< 10000 14
10000-20000 41
20000-40000 76
>40000 64
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INTERPRETATION: After analyzing the data it was found that 14 families have monthly family income level less than Rs 10000, 41 families have between rs 10000 and Rs 20000, 76 families have between Rs 20000 and Rs 40000, 64 families have above Rs 40000.
<10000 35
10000-25000 59
25000-50000 42
>50000 60
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INTERPRETATION: After analyzing the data it was found that 35 people invest less than Rs 10000 annually, 59 people invest between Rs 10000 and Rs 25000 annually, 42 people invest between Rs 25000 and Rs 50000 annually, and 60 people invest more than Rs 50000 annually.
Factors of Investment:
S. No. 1 2 3 4
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INTERPRETATION: After analyzing the data it was found that while investing 68 people gave priority to tax benefits,15 people to liquidity,52 people to safety and 59 people to returns.
Influencer:
S. No. 1 2 3 4
Influencer
1 Didnt Disclose.
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INTERPRETATION: after analyzing the data it was found that 118 people are influenced by self/ spouse, 49 by parents, 17 by intermediaries and 15 by friends.
TIME HORIZON:
S.NO. 1 2 3 4 NO. OF YEARS <1 1-3 3-10 >10 NO. OF PEOPLE 63 77 35 25
No. of people
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INTERPRETATION: After analyzing the data it was found that 63 people invest for less than 1 year, 77 for 1 to 3 years, 35 for 3 to 10 years, 25 for more than 10 years.
S.NO. 1 2 3 4
NO. OF PEOPLE 25
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No. of people
INTERPRETATION: After analyzing the data it was found that 25 people invest in equity shares, 75 people invest in ppf, 40 people in fixed deposits and 60 people invest in life insurance.
S. No. 1 2 3 4
Investment Option Tax Savings Family Security Unforeseen Expense Saving for old age
No. of People 76 93 11 17
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No. of People 1 Tax Savings 2 Family Security 3 Unforeseen Expense 4 Saving for old age
INTERPRETATION: After analyzing the data it was found that 76 people prefer life insurance an investment for saving tax, 93 people for family security, 11 for unforeseen expense and 17 for old age.
Return on investment:
S. No. 1 2 3 4
No. of people 53 67 33 39
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No. of people
INTERPRETATION: After analyzing the data it was found that 53 people want return on investment before 3 years, 67 people want between 3 years to 5 years, 33 people want between 5 years to 10 years and 39 people want after 10 years.
YES NO
140 60
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INTERPRETATION: After analyzing the data it was found that 140 people consulted financial intermediary to make investment in life insurance where as 60 people didnt consulted any body.
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No. of people
INTERPRETATION: After analyzing the data it was found that 40 people save tax by investing in life insurance, 75 people by investing in ppf, 30 people by investing in infrastructure bonds, 55 people by investing in pension plans.
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CONCLUSIONS
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From the findings of the study it can be said that the scope of Life Insurance market in India is full of opportunities & a huge potential lies in rural areas.
The potential customers want value added products to meet their needs & requirements on individual basis.
From the study it can be inferred that people have started looking towards Life Insurance as a future long-term source of investment with life cover.
People give priority to family security while investing in any Life Insurance policy.
Private players in the industry need to focus towards marketing strategies to capture more of industry share with the growing competition.
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RECOMMENDATIONS
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The private companies have to improve their awareness among the people so as to build a brand image for them in comparison with LIC. The companies have huge potential unexplored market, which is ready to buy the product, but only if priced & targeted well.
The companies can have agents to sell their products & else sell through mailer but in future it should also go in for selling through Internet.
The companies need to market their products in such a way so that it reaches each & every potential customer.
The company should create value added services & brand image so that they can ride on them to sell their products & to overcome its competitors.
Insurance as a future source of long term gains need to be informed while selling a Insurance product.
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ANNEXURE
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QUESTIONNAIRE
NAME: -----------------------------------
COMPANY:-----------------------
AGE:------------------
MOBILE:------------------TEL:-----------------
1. Rank the following factors in order of your preference, which you consider while making any investment:
3.what is the time horizon for which you generally invest? (Tick the appropriate one)
4. How much money do you invest annually? (Tick the appropriate one)
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5. What are the instruments you invest in? (Tick your choices)
Tax Savings Family Security Unforeseen Expenses Savings for old age 7. Have you ever consulted any financial intermediary to make investment in Life Insurance options?
Yes No
8. You would prefer to get returns within? (Tick the appropriate one)
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9. Give ratings in order of your preference for these advantages of investing in Life Insurance options?
Long Term Savings Tax Savings & Tax Free Returns Peace of mind for Family Provision after retirement
10. How do you save your Tax? (Tick the appropriate one)
Invest in Life Insurance Invest in PPF Invest in Infrastructure bonds Invest in pension plans
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BIBLIOGRAPHY
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BOOKS Marketing Management-PHILIP KOTLER Research Methodology C.R. KOTHARI BROUCHERS Company Brouchers and Journals WEBSITES www.iciciprulife.com
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