Objective of The Project: Lic V/S Icici Prudential Life Insurance

LIC V/S ICICI PRUDENTIAL LIFE INSURANCE
Objective of the Project
The main objective is to spread life insurance to every nook and corner of
the country especially rural areas, to socially and economically backward classes
and provide them reasonably-priced financial cover against death. Other
objectives include encouraging people to save for the future by making
insurance-linked savings more attractive and secure. The funds created are then
utilized and invested for nation building. The insurance business is conducted
with the full realizations that LIC is only a trustee of the insured public
and priority is given to meet the needs that arise due to change in
the social
the
and
core value
economic
of
environments.
social
commitment
Even
has
today
not
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changed.
50
years,
What
have
changed in recent times are customers expectations and the environment

in which the life insurance sector operates. This is due to globalization
which
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has
opened
up
the
insurance
sector
to private
players.
Introduction of life insurance

Insurance is a social device where uncertain risks of individuals may be
combined in a group and thus made more certain - small periodic contributions by the
individuals provide a found out of which those who suffer losses may be reimbursed. In
addition to being a means to protect oneself, the insurance Industry is an efficient
conduit for the saving of people to be channelled towards economic growth. In India,
the Insurance Industry is more than150 years old. Today, it is monopolized by two
PSU's in their respective fields of life and General Insurance. However, with the
successful passage IRDA Bill through both houses of parliament in December 1999 the
sector has been opened up to private players. This will provided much. Needed
impetus to the Industry and will improve the quality of service and products and will
also increase employment opportunities. There are still some issues their need to be
sorted out, particularly with regard to the status of intermediaries as envisaged by
the Insurance Regulatory Authority.
India is the largest democracy in the world having a population more than one
billion. It is 5th largest in the world in terms of purchasing power parity (PPP). India
GDP growth rate is over 6 percent per year on average for the last decade and saving
rate is around 26 percent of GDP Life Insurance Corporation of India was formed in
September 1956 by passing LlC Act,1956 in Indian parliament. The first general
insurance company, Triton Insurance Company Ltd. was established in Calcutta in
1850. In 1957 the General Insurance
Council a wing of Insurance Association of India formed a code of conduct. In 1961 an
insurance act was passed to form General Insurance Company Ltd. which was amended
in 1968. General Insurance business 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. and
The United Assurance Company Ltd.
Insurance is an upcoming sector, in India the year 2000 was a landmark
year for life insurance industry, in this year the life insurance industry was liberalized
after more than fifty years. Insurance sector was once a monopoly, with LIC as the only
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company, a public sector Enterprise. But nowadays the market opened up and there are
many private players competing in the market. There are fifteen private life insurance
companies has entered the industry.
After the entry of these private players, the market share of LIC has been
considerably reduced. In the last five years the private players is able to expand the
market and also has improved their market share. For the past five years private players
have launched many innovations in the industry in terms of products, market channels
and advertisement of products, agent training and customer services etc.
The various life insurers entered India:1. HDFC Standard Life Insurance Company Ltd.
2. Max Life Insurance Co. Ltd.
3. ICICI Prudential Life Insurance Company Ltd.
4. Kotak Mahindra Old Mutual Life Insurance Limited.
5. Birla Sun Life Insurance Company Ltd.
6. Tata AIG Life Insurance Company Ltd.
7. SBI Life Insurance Company Limited.
8. ING Vysya Life Insurance Company Private Limited.
9. Met life India Insurance Company Ltd.
10. Life Insurance Corporation of India.
11. Aviva Life Insurance Co. India Pvt. Ltd.
12. Reliance Life Insurance Company Limited.
Through this project I want to study about the life insurance industry and also doing the
comparative analysis between two insurance players in this industry. They are,
ICICI Prudential Life Insurance
Life insurance corporation of India
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WHAT IS LIFE INSURANCE?
Life insurance is a contract under which the insurer (Insurance Company) in

consideration of a premium paid undertakes to pay a fixed sum of money on the death
of the insured or on the expiry of a specified period of time whichever is earlier.

In case of life insurance, the payment for life insurance policy is certain. The event
insured against is sure to happen only the time of its happening is not known. So life
insurance is known as Life Assurance. The subject matter of insurance is life of
human being. Life insurance provides risk coverage to the life of a person. On death of
the person insurance offers protection against loss of income and compensate the
titleholders of the policy.
Life Insurance is a financial cover for a contingency linked with human life, like death,
disability, accident, retirement etc. Human life is subject to risks of death and disability
due to natural and accidental causes. When human life is lost or a person is disabled
permanently or temporarily, there is loss of income to the household.
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Though human life cannot be valued, a monetary sum could be determined based on the
loss of income in future years. Hence, in life insurance, the Sum Assured (or the
amount guaranteed to be paid in the event of a loss) is by way of a benefit. Life
Insurance products provide a definite amount of money in case the life insured dies
during the term of the policy or becomes disabled on account of an accident.
NEED OF LIFE INSURANCE

Why you should buy Life Insurance:All of us face the following risks:
Dying too soon
Living too long
Life Insurance is needed:
To ensure that youre immediate family has some financial support in the event of your
demise
To finance your childrens education and other needs
To have a savings plan for the future so that you have a constant source of income after
retirement
To ensure that you have extra income when your earnings are reduced due to serious
illness or accident
To provide for other financial contingencies and life style requirements
Who needs Life Insurance?
Primarily, anyone who has a family to support and is an income earner needs
Life Insurance. In view of the economic value of their contribution to the family,
housewives too need life insurance cover. Even children can be considered for life
insurance in view of their future income potential being at risk.
How much Life Insurance is needed?
How much insurance you need depends on your annual income, your expenses and
your existing assets. Use our Insurance Calculator to get a rough estimate of how much
you should insure yourself for.
The amount of Life Insurance coverage you need will depend on many factors such as:
How many dependants you have
Whether you have any debts or mortgages
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What kind of lifestyle you want to provide for your family

How much you need for your childrens education
What your investment needs are
What your affordability is
You should seek the help of an insurance agent or broker to understand your insurance
needs and suggest the right type of cover.
What if customer already has life insurance?

As an individual, for the extent of financial protection you need is different
from that as a married man which in turn is different from that as a parent. At each life
stage, it is necessary to re-evaluate the amount of protection and provision you require
and adjust for the same.
Below are some of the events in your life for which you should re-evaluate and plan
your life insurance needs.
Life Stages
1. Marriage
2. Birth of a child
3. Schooling of a child
4. Education of a child
5. Marriage of a child
6. Retirement
BENEFITS OF INSURANCE
Insurance is the instrument of security, saving and peace of mind. It provides several
benefits by paying a small amount of premium to an insurance company as:
It is gratifying to see insurance market players and practitioners coming together on an
occasion like this to reinforce a common vision to create a progressive and dynamic
insurance industry where each one of us have an important role to play.
After nearly decades of intense debate consensuses developed in India for ending the
public sector monopoly in insurance and open the industry to private sector participants
subject to suitable regulation. Today, to the credit of combined efforts by both the
regulators and industry players, the benefits of insurance are widely acknowledged,
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public confidence in the industry has been very much restored and the industry on the
whole is far more dynamic.
Insurance companies in India:Insurance is a colossal sector in India that is growing at a speedy rate of 1520%. The insurance sector is approximately 450 billion yet 70 percent of the population
in India is not insured. This gives you a peek into the huge growth opportunity that
exists for this segment. The insurance business in India mainly consists of two main
players, the Life Insurance Corporation (LIC) and General Insurance Corporation
(GIC). Almost 100 divisional offices and 2000 branch offices are functional for LIC. As
LIC caters to life insurance, health insurance, property and accident. Insurance it needs
an increasing number of employees. Thus insurance companies in India are growing
vertically and horizontally bringing growth and employment opportunities.
The other player GIC undertakes motor, marine, personal accident and fire insurance.
Moreover it has four subsidiaries
a) Oriental Insurance,
b) United India Insurance,
c) New India Assurance and
d) National Insurance.
Insurance companies in India have a deep-rooted history. It all began in
1818 when Oriental Life Insurance Company in Calcutta was established. From then on
insurance was scattered across the country. It was an unorganized sector. Then in 1950,
the entire insurance segment was nationalized.
After achieving freedom, the insurance sector gained momentum. In 1956 the
government of India consolidated 240 private life insurers and provident societies and
this was how LIC came to life. The justification to the nationalization of the life
insurers was that the government would reap the necessary funds that were required for
industrialization. The general insurance industry still remained in the hands of the
private sector till 1972 and was then nationalized. LIC adds about 7 percent to the
country's GDP. With IRDA's regulation not less than 15 percent of funds from the
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insurance companies are said to fill the coffers of infrastructure and social sectors. Thus
they are providing vital funds to the country's growth. Infrastructure of the country
bears risks that are of a long-term character. They include political instability,
geological hindrances, gestation period and illiteracy. The long tern funds provided by
Life Insurance of India not only cover these risks but also help securing a brighter
future for the country.
Besides infrastructure the insurance companies in India are vital for one's saving
purpose. In the beginning insurance was looked at as a 'tax-benefit' investment. Slowly,
however the mindset of the common man is changing. Life insurance is now looked on
as investment vehicle. With the introduction of private players in the sector there has
been more transparency and flexibility in the sector. Private players have procured
almost 9 percent of the insurance segment even though the coveted policies like
endowment and money back still lay with the government. Better services, individual
attention and pure transparency have given the private sector an upper hand. But with a
huge unorganized market in India yet to tap the insurance companies in India have a
voluminous market to explore.
RESEARCH AND METHODOLOGY

There are two types of sources for collection of data they are:
PRIMARY SOURCE:
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Primary data is the data collected from the survey, personal interaction etc.
SECONDARY DATA:
Secondary data is the data which is collected from books, periodicals, newspaper, internet,
articles etc.
The researcher collected data for the project purely from secondary source.
SOURCES OF DATA
1. The content of the project are purely based on secondary data.
2. The data is granted from secondary data like website, book reference.
3. All the source of secondary data which is mentioned above gave excellent information
on my project topic i.e. LIFE INSURANCE CORPORATION OF INDIA (LIC) V/S ICICI
PRUDENTIAL LIFE INSURANCE.
Private life insurance companies still struggling
The Life Insurance Corporation of India (LIC) has again come to the rescue
of the industry in the financial year ending July 2012. While 23 private players together
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have a marginal dip in business (-1 pct), LIC has powered ahead with 23 pct growth in
new business premium collection. I sometimes wonder how this is possible. How is it
that LIC manages to stay ahead most of the time? Frequent changes in regulations is
what we hear most when we try to assign a reason for the dip in business for private life
insurance companies.
In spite of a being such a large organisation with an equally large agent force,
LIC seems to be able to come up on top. Surely, the changes in regulations are much
more difficult to drive down with such a large agent force. And given the changes in
regulations and the cut in commission levels of some products, it would have been quite
a task to motivate and direct the large agent force. A more detailed analysis on this
probably at a later date.
Coming back to industry performance, clearly non-linked insurance plans seem
to be the flavour of this financial year. In the individual plans, almost 88 pct of the
premium collection is in the non-linked category. The unit linked insurance plans
or ULIPs as they are better known were bashed so badly that no one seems to want to
sell it any more. Of course, one reason is because the commission rates in unit linked
insurance plans have been slashed considerably.
There is a bit of a sad story here too. Now with reduced commission rates and
higher incentives to stay invested for longer periods of time, ULIPs are actually a much
better product. If you plan to stay invested for 15 to 20 years, chances are ULIPs would
give you much better returns than the traditional plans being sold today. Here it seems it
is the middle-mans income which decides the product which should be purchased by
the consumer. Very sad, very wrong but true.
In the general insurance industry, growth has been good and much more
secular. Almost all players have shown double-digit growth and the overall industry
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grew by 21 pct. Here the big four public sector insurers collectively have close to 60 pct
of market share. With a gradual increase in premiums by some of the players, the
general insurance industry might see much better growth rates in the current financial
year. Even the government has given very clear directions to the public sector insurers
to price-to-risk and not only to garner market share.
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CURRENT STANDING OF PRIVATE LIFE INSURANCE

COMPANIES INURBAN SECTOR
Life insurance is possibly the most- retail of all financial services, and is
required by people of all segments and in all locations. At a broad level, ICICI
Prudential aims to secure the families of the middle and upper class working people in
urban India. To this end, they have pursued a pan-India distribution strategy and backed
it up with arrange of products that meets the needs of a wide range of people, be they
from rural or urban areas. Today, they have branches in 74 locations and rural presence
in more than 15 states. Certainly, the majority of the business still comes from urban
areas such as metros and mini-metros. However, they have seen rural business grow
significantly and expect it to continue making greater contribution in the years to come.
ROLE OF FOREIGN COMPANIES IN INDIA
Government has allowed 26% foreign equity participation in the insurance
sector. This has its limitations. While most foreign insurers planning to start their
services in India were not pleased by this condition, they reluctantly agreed that this
was expected in an opening economy and this will not change their outlook for India.
After all no insurance company can afford to ignore a market of 1bn people. But the
fact remains those they:
Cannot appoint majority directors on the company board;
Cannot have say in the day to day workings of the company;
Can Affect Only Special Resolutions.
This cap, however, will have a great impact on the Indian counterpart to
raise 74% of the funds in their joint venture. To add to this if Indian partners like State
bank of India, with over 9000 branches nationwide, will demand premium for their
existing distribution network, we will see the foreign insurance companies demand
hefty premiums for bringing in their global expertise and brand. Mr. Vaidya, Chairman
of SBI, has recently stated that all it is looking for is a good and reliable partner and the
question of a hefty premium to be charged to its foreign partner is not significant. The
monolith has finally come to business senses foreign companies are unhappy even
about laws pertaining to repatriation of funds. The Stipulated investment criteria is also
something that all players in the sector, be it Indian or foreign, are closing watching.
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The foreign players are essentially looking to tap their" global expertise in the variety
markets and use that know-how to work in the Indian scenario. Designing of products,
information systems, technical expertise, manpower planning etc is what one expects
the foreign players to have a say in. Any venture of the joint kinds needs to be between
equals. If this is not there then there is every chance that a partner in the venture will
feel increasingly uncomfortable and would be looking to call the joint venture off.
Insurance Companies in the Present Global Scenario

The most important aspect for any financial services institution dealing
with today's regulatory framework is the need to build an integration, risk, compliance
and regulatory environment. The globalization of business, the proliferation of, and
dependency on, technology, and the preservation of a trusted and secure environment to
facilitate financial institutions, all require financial services organizations to have in
placed the mechanisms to ensure sound and reliable security and privacy. The industry's
landscape is continuously changing and increasing in complexity across financial
services, causing firms to face a diverse array of challenges and concerns. Role of
Private sector has grown rapidly in the service industry, especially with reference to
Insurance management.
The insurance industry, as an integral part of the financial services industry does
not stand apart from the profound changes in the financial sector. Recently we are
witnessing an enhanced competition in the insurance industry probably due to the
opening up of this sector to private participants. There is a close inter-action between
insurance and economic growth. As economy grows, the living standards of people
increase. As a consequence, demand for insurance increases. As the assets of people
and of business enterprises increase in the growth process, the demand for general
insurance also increases. In fact, with the widening of the economy, the demand for
new types of insurance products emerges. Insurance now extends not only to product
market but also to service industries including finance. It is equally true that growth
itself is facilitated by insurance. The global consolidation of the financial services
sector is in large part driven by acquisition activity. Companies competing for a greater
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share of consumer funds are seeking quick access to new markets, new products and
new channels of distribution, both domestically and economically.
Grounded in a deep understanding of the issue, we have tried to deal with today's
life insurance and financial services environment in a very lucid manner covering all
the aspects such as productivity, management of processes, growth drivers, and critical
factors for success and policy implications. Indian insurance companies may be started
by domestic entities in joint venture with foreign entities, with the latter holding a
maximum of26 per cent of the equity. According to the latest data, in life and non-life
insurance, the new entities have already managed to garner more than 20 per cent of the
new business premium. In banking, foreign banks in India now have a share of only
around 7 per cent of total banking assets.
Recently, the RBI released an ambitious road map for increasing the presence of
foreign banks in India. As per the guidelines, the aggregate foreign investment from all
sources will be allowed up to a maximum of 74 per cent of the paid up capital of the
private bank. The roadmap is divided into two phases. In the first phase, between
March 2005 and March 2009, foreign banks will be permitted to establish presence by
way of setting up a wholly owned banking subsidiary (WOS) or conversion of the
existing branches into a was. Further, during this phase, permission for acquisition of
shareholding in Indian private sector banks by eligible foreign banks will be limited to
banks identified by the RBI for restructuring. During the second phase commencing in
April 2009, the RBI may permit merger/acquisition of any private sector bank in India
by a foreign bank.
The public sector at present dominates the Indian financial services sector. The
Government does not have enough money to sustain the expansion plans of the present
public sector enterprises. For example, the recent public issue by Punjab National Bank
has brought down the Government's stake from 80 per cent to 57 per cent. On the other
hand, foreigners hold more than 70 per cent of the equity in the two leading private
sector banks in India, namely ICICI Bank and HDFC Bank.
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INTRODUCTION OF THE COMPANY:LIFE INSURANCE CORPORATION OF INDIA (LIC):Life Insurance Corporation of India (LIC) was formed in September, 1956,
by an Act of Parliament, viz., Life Insurance Corporation Act, 1956, with capital
contribution from the Government of India. The then Finance Minister, Shri C.D.
Deshmukh, while piloting the bill, outlined the objectives of LIC thus to conduct the
business with the utmost economy, and a spirit of trusteeship; to charge premium no
higher than warranted by strict actuarial considerations; to invest the funds for
obtaining maximum yield for the' policy holders consistent with safety of the capital; to
render prompt and efficient service to policy holders, thereby making insurance
widely popular. Since nationalization, LIC has built up a vast network of 2,048
branches, 100divisions and 7 zonal offices spread over the country. The Life Insurance
Corporation of India also' transacts business abroad and has offices in Fiji, Mauritius
and United Kingdom. LIC is associated with joint ventures abroad in the field of
insurance, namely, Ken-India ,Assurance Company Limited, Nairobi; United Oriental
Assurance Company Limited, Kuala Lumpur and Life Insurance Corporation
(International) E.C.Bahrain. The Corporation has registered a joint venture company in
26th December, 2000 in Katmandu, Nepal by the name of Life Insurance Corporation
(Nepal) Limited in collaboration with Vishal Group Limited, a local industrial Group.
An off-shore company L.I.C. (Mauritius) Off-shore Limited has also been set up in
2001 to tap the African insurance market.
General Insurance:
General insurance business in the country was nationalized with effect from
1stJanuary, 1973 by the General Insurance Business (Nationalization) Act, 1972. More
than 100 non-life insurance companies including branches of foreign companies
operating within viz., the National Insurance Company Ltd., The New India Assurance
Company Ltd., The Oriental Insurance Company Ltd., and The United India Insurance
Company Ltd. with head offices at Calcutta, Bombay, New Delhi and Madras,
respectively.
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General Insurance Corporation (GIC) which was the holding company of

the four public sector general insurance companies has since been delinked from the
later and has been approved as the "Indian Reinsurer" since 3rd November 2000. The
share capital of GIC and that of the four companies are held by the Government of
India. All the five entities are Government companies registered under the Companies
Act, 1956. The general insurance business has grown in spread and volume after
nationalization. The four companies have 2699 branch offices, 1360divisional offices
and 92 regional offices spread all over the country. GIC and it subsidiaries have
representation either directly through branches or agencies in 16countries and through
associate locally incorporated subsidiary companies in 14 other countries. A whollyowned subsidiary company of GIC, i.e. Indian International Pvt. Ltd. is operating in
Singapore and there is a joint venture company, viz. Ken-India Assurance Ltd. in
Kenya. A new wholly owned subsidiary called New India International Ltd., UK has
also been registered.
ICICI Prudential Life Insurance:Incorporated on 20 July 2000 it is a joint venture between ICICI (74%) and
Prudential LIC (26%) of U.K. In November 2000, ICICI Prudential Life Insurance was
granted Certification of Registration for carrying out life insurance business by the
Insurance Regulatory & Development Authority of India. The Company issued its first
policy on 12 December 2000.ICICI Prudential Life Insurance is a joint venture between
the ICICI Group and Prudential plc, of the UK. ICICI started off its operations in 1955
with providing finance for industrial development, and since then it has diversified into
housing finance, consumer finance, mutual funds to being a Virtual Universal Bank and
its latest venture Life Insurance.
Foreign Partner:
Established in 1848, Prudential plc. Of U.K. has grown to be the largest life
insurance and mutual fund Company in U.K. Prudential plc. Has had its presence in
Asia for the past 75 years catering to over 1 million customers across 11 Asian
countries. Prudential is the largest life insurance company in the United Kingdom
(Source: S&P's UK Life Financial Digest, 1998). 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.
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Their latest venture ICICI Prudential Life plans to take care of the insurance needs at
various stages of life Prudential plc, one of the UK's leading financial service providers,
issued life insurance policies in Poland prior to World War II through Prudential
Assurance Company Limited and its subsidiary "Przezomosc", a now defunct Polish
company in which Prudential Assurance acquired a controlling interest in 1927.
Pizezomosc continued to issue life policies in Poland until 31 December 1936, and
Prudential Assurance issued life policies in Poland from 1 January 1933 to 31
December 1936. With effect from 1 January 1937 both companies ceased to accept new
life business and the administration of the two portfolios was combined.
Based on notes of surviving records that existed in Prudential Assurance's London
office there were 4,623 policies in force in Poland at the outbreak of World War II in
1939.
Over 33% of these policies have been settled since the early 1950s despite significant
gaps in our records, due in no small part to their destruction in Poland under Nazi
Occupation.
The assets of Prudential's Polish Business were seized by the Nazi occupying
authorities, following the invasion of Poland in 1939. Unlike some major European
insurers Prudential did not trade in Nazi occupied Europe 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. 9.25 billion with ICICI Bank
and Prudential Plc holding 74% and 26% stake respectively. In the financial year ended
March 31, 2005, the company garnered Rs 1584 crore of new business premium for a
total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The company
has a network of about. 56,000 advisors; as well as 7 banc assurance and 150 corporate
agent tie-ups. For the past four years, ICICI Prudential has retained its position as the
No.1 private life insurer in the country, with a wide range of flexible products that meet
the needs of the Indian customer at every step in life.
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OBJECTIVES OF LIC
Spread Life Insurance widely and in particular to the rural areas and to the
socially and economically backward classes with a view to reaching all insurable
persons in the country and providing them adequate financial cover against death at a
reasonable cost.
Maximize mobilization of people's savings by making insurance-linked savings

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

In line with its commitment to providing secure futures for individuals and families
through insurance and retirement solutions, ICICI Prudential aim to enhance the lives
of senior citizens, and to create safe and secure neighbourhoods with the active
involvement of citizens.
Meet the various life insurance needs of the community that would arise in the
changing social and economic environment Involve all the working people to the best
of their capabilities in furthering the interests of the insured public by providing
efficient services with courtesy
Bear in mind, in the investment of funds, the primary obligation to its policy holders, whose
money it holds in trust, without losing sight of the interest of the community as a whole; the
funds to be deployed to the best advantage of the investors and the community as a
whole, keeping in view national priorities and obligations of attractive return
Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.
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MARKET SHARE
LIFE INSURANCE COMPANIES
Key Trends of 2012 Private bank led insurers have fared much better than
insurers dependent on agency distribution in volumes (2) Share of single premium
policies, which had inched up after the new ULIP guidelines, has reversed now as new
ULIP schemes have stabilised. (3) Overall ticket sizes have remained flat for private
insurers in FY12 but bank led insurers have done better with growth in average ticket
sizes aiding overall volumes.
ICICI Prudential
In todays Private insurance sector ICICI Prudential holds the highest i.e.
huge30%share in the private insurance market, as compared to all other which together
comprise of the rest 70% of the market share. In the financial year ended march 31,
2005, the company garnered rs.1584 crore of new business premium for a total sum
assured of Rs. 13780 crore and wrote nearly 615000 policies. The company has a
network of about 56000 advisors: as well as 7 banc assurance and 150 corporate agent
tie-ups for the past four years, ICICI Prudential has retained its position as the no.1
private life insurer in the country with a wide range of flexible products that meet the
needs of the Indian customer at every step in life.
DISTRIBUTION
ICICI Prudential has one of the largest distribution networks amongst private life
insurers in India, having commenced operations in 74 cities and towns in India. These
are: Agra, Ahmedabad, Ajmer, Allahabad, Amritsar, Anand, Aurangabad, Bangalore,
Bareilly, Bharuch, Bhatinda, New Delhi, Patiala, Pune, Raipur, Rajkot, Ranchi,
Rourkela, Saharanpur, Salem, Shimla, Siliguri, Surat, Thane, Thrissur, Trichy,
Trivandrum, Udaipur, Vadodara, Vapi, Vashi, Vijayawada and Vizag.
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The company has seven banc assurance tie-ups, having agreements with ICICI
Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank and some
cooperative banks, as well as over 150 corporate agents and brokers. It has also tied up
with NGOs, MFIs and corporate for the distribution of rural policies and organizations
like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically
underprivileged sections of society. ICICI Prudential has recruited and trained about
56,000 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.
Market Share of all Life Insurance Companies in India at the end of March-2012 /
FY 2012
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PRODUCTS OF LIC:1. Whole Life with Profits Plan

Features:
This plan is mainly devised to create an estate for the heirs of the
policyholder as the plan basically provides for payment of sum assured plus bonuses on
the death of the policyholder. However, considering the increased longevity of the
Indian population, the Corporation has amended the above provision, thereby proving
for payment of sum assured plus bonuses in the form of maturity claim on completion
of age 80 years or on expiry of term of 40 years from date of commencement of the
policy whichever is later. The premiums under the policy are payable up to age 80 years
of the policyholder or for a term of 35 years whichever is later. If the payment of
premium ceases after 3years, a paid-up policy for such reduced sum assured will be
automatically secured provided the reduced sum assured exclusive of any attached
bonus is not less thanRs.250/-. Such reduced paid-up policy is not entitled to participate
in the bonus declared thereafter but the bonuses already declared on the policy will
remain attach, provided the policy is converted in to a paid-up policy after the
premiums are paid for 5 years.
BENEFITS SURVIVAL BENEFIT:
Sum assured plus accrued bonuses and the terminal bonuses, if any; on
the policyholder attaining age 80 years or on expiry of term of 40 years from the date
of commencement of the policy whichever is later.
DEATH BENEFIT:
Sum assured plus accrued bonuses and the terminal bonuses, if any, on the death
of the policyholder are paid to his/her nominees/heirs.
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2. LIMITED PAYMENT WHOLE LIFE (WITH PROFITS)

Features:
This is the best form of life assurance for family provision since it enables
the Life Assured to pay all the premiums during the ordinarily vigorous and most
productive years of life. He need not pay any premium in the later stages of life if and
when his conditions might become adverse. With Profits Limited Payments Policies do
not cease to participate in profits after completion of the premium paying period but
continue to share in the periodical Bonus Distribution until the death of the Life
Assured. The Without-Profit option is available under Table no. 3. If the policyholder
pays at least 3 years' premiums and then discontinues paying any more premiums, a
reduced paid-up assurance policy comes into force. Such a reduced paid-up Policy will
not been titled to participate in the profits declared. Thereafter, but such Bonus as has
already been declared on the Policy will remain attached thereto. The premium paying
term under this plan is five years minimum and 55 years maximum.
BENEFITS Survival benefits
If the Life Assured survives the premium paying period and the policy continues
in full force, provided all premiums have been paid, but no further premiums are
required to be paid.
Death Benefits:
Sum Assured plus Bonuses accrued and vested in the policy.
Plan Parameters:
Entry age
Sum assured (Rs.)
Term (years)
Minimum
12 (nearer birthday)
50000
5
60
NO LIMIT
55 ( Max. Premoce ceasing
age is70)
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Mode of Payment
Maximum premium paying period
Poli
cy lo
an
avail
Yearly, half yearly,
80 yrs. of age or 40 yrs.
quarterly, monthly,
premium paying term from the
salary saving Scheme
date of commencement
of
able
yes
whichever is later.
3. ENDOWMENT WITH PROFIT PLAN

FEATURES:
Moderate Premiums
High bonus
High liquidity
Savings oriented
This policy not only makes provisions for the family of the Life Assured in
event of his early death but also assures a lump sum at a desired age. The lump sum can
be reinvested to provide an annuity during the remainder of his life or in any other way
considered suitable at that time. Premiums are usually payable for the selected term of
years or until death if it occurs during the term period.
Suitable For:
Being an endowment assurance policy, this plan is apt for people of all ages and
social groups who wish to protect their families from a financial setback that may occur
owing to their demise. The amount assured if not paid by reason of his death earlier will
payable at the end of the endowment term where it can be invested in an annuity
provision for the rest of the policyholder's life or in any other way he may think most
suitable at that time.
BENEFITS
Survival benefits:
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Payment of full Sum' Assured + Vested Bonus + Final Additional bonus, if any.
Death Benefits:
Payment of full sum assured + Vested Bonus.
Plan Parameters:
Entry Age (years)
Sum Assured (Rs.)
Term (years)
Minimum
12
50000
5
Maximum
65
no limit
55
Mode Of Payment
Monthly, Quarterly,
Max Minority age

75 years
Policy loan available

Yes
Half
Yearly,
Yearly,
Salary Saving Scheme.
4. Anmol Jeevan (WITHOUT PROFITS) BENEFITS

On Death during the Term of the Policy: Sum Assured On Maturity: Nil
RESTRICTIONS
(A) Minimum age at entry: 18 years (completed)
(B) Maximum age at entry: 55 years (nearer birthday)
(C) 1000 for maximum age at maturity : 65 years
(D) Minimum Term: 5 years
(E) Maximum Term: 25 years
(F) Minimum Sum Assured: Rs. Five Lakh
(G) Maximum Sum Assured: Rs. Three Crore (Inclusive of all term Assurance plans)
Note: The policy would be issued in multiples of Rs. one lakh for Sum Assured above
Rs. five lakh.
(H)Mode of Premium Payment: Yearly, Half- Yearly and Single premium.
Rebates:
Sum Assured Rebate: NIL in case of regular premium policies and Re. l Sum Assured
for policies of Rs.25 lakh and above in case of single premium policies.
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Mode Rebate: 1% of Annual premium for yearly mode and nil for 19 HalfYearly modes.
UNDERWRITING, AGE PROOF AND MEDICAL REQUIREMENTS:
The plan is available to Standard and Sub-standard lives (upto Class VI EMR).
This plan is also available to female lives (category I and II lives only) and to
physically handicapped persons subject to certain conditions. Standard age proof will
have to be submitted along with the Proposal Form.
PAID-UP AND SURRENDER VALUE:
The policy will not acquire any paid-up value.
No Surrender Value will be available under this plan.
GRACE PERIOD FOR NON-FORFEITURE PROVISIONS:
A grace period of 15 days will be allowed for payment of yearly or halfyearly premiums. If death occurs within this period and before the payment of the
premium then due, the policy will still be valid and the Sum Assured paid after
deduction of the said premium as also unpaid premiums falling due before the next
policy anniversary of the Policy. If the premium is not paid before the expiry of the
days of grace, the Policy gets lapsed.
Insurance plans:
As individuals it is inherent to differ. Each individuals insurance needs and
requirements are different from that of the others. LICs Insurance Plans are a policy
that talk to you individually and gives the most suitable options that can fit ones
requirement.
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The Money Back Policy-20 Years The Money Back Policy-25 Years Jeevan
Surabhi-15
Years
Jeevan
Surabhi-20
Years Jeevan
Surabhi-25
Years Jeevan
Rekha(closed for sale)Bima Bachat Jeevan Bharati. The Whole Life Policy The Whole
Life Policy- Limited Payment. The Whole Life Policy- Single Premium Jeevan Rekha
(closed for sale) Jeevan Anand Jeevan Tarang Two Year Temporary Assurance Policy.
The Convertible Term Assurance Policy Anmol Jeevan- IAmulya Jeevan, Jeevan
Saathi Mortgage Redemption.
Unit plans:
Unit plans are investment plans for those who realize the worth of hard-earnedmoney.
These plans help you see your savings yield rich benefits and help you savetax even if
you dont have consistent income.
Jeevan more
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More Future Bima

Market plus
Money plus
Profit more
Fortune more
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PRODUCTS of ICICI Prudential Life Insurance

1. Insurance Solutions for Individuals
ICICI Prudential Life Insurance offers a range of innovative, customercentric products that meet the needs of customers at every life stage. Its 20 products
can be enhanced with up to 6 riders, to create a customized solution for each
policyholder.
2. Savings Solutions
Secure Plus is a transparent and feature-packed savings plan that offers 3 levels of
protection.
Cash Plus is a transparent, feature-packed savings plan that offers 3 levels of protection
as well as liquidity options.
Save n Protect is a traditional endowment savings plan that offers life protection along
with adequate returns.
Cash back is an anticipated endowment policy ideal for meeting milestone expenses
like a child's marriage, expenses for a child's higher education or purchase of an asset.
Lifetime & Lifetime II 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 Maxi miser.
Life Link 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.

Invest Shield Life is a Market Linked plan that provides capital guarantee on the
invested premiums and declared bonus interest.

Invest Shield Cash is a Market Linked plan that provides capital guarantee on the
invested premiums and declared bonus interest along with flexible liquidity options.
Invest Shield Gold is a Market Linked plan that provides capital guarantee on the
invested premiums and declared bonus interest along with limited premium payment
terms.
3. Protection Solutions
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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.
4. Child Plans
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 child's life. Smart
Kid plans are also available in unit linked form, both single premium and regular
premium.
5. Retirement Solutions
Forever Life is a retirement product targeted at individuals in their thirties
Secure plus Pension is a flexible pension plan that allows one to select between 3
levels of cover.
Market-linked retirement Products:
Lifetime Pension II is a regular premium market-linked pension plan.

Life Link Pension II is a single premium market-linked pension plan.
Invest Shield Pension is a regular premium pension plan with a capital guarantee on
the invertible premium and declared bonuses.
ICICI Prudential also launched? Salaam Indigo? A social sector group insurance
Policy targeted at the economically underprivileged sections of the society.
6. Group Insurance Solutions
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ICICI Prudential also offers Group Insurance Solutions for companies

seeking to enhance benefits to their employees. ICICI Prudential Group Gratuity Plan:
ICICI Pro 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 Prudential Group
Superannuation Plan: ICICI Pro offers a flexible defined contribution superannuation
scheme to provide a retirement kitty for each member of the group. Employees have the
option of choosing from various annuity options or opting for a partial commutation of
the annuity at the time of retirement. ICICI Prudential Group Term Plan: ICICI Pm
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.
7. Flexible Rider Options
ICICI 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 sum
assured under the policy. If the death occurs while travelling 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.
Major Surgical Assistance Benefit: provides financial support in the event of medical
emergencies, ensuring benefits are payable to the life assured for medical expenses
incurred for surgical procedures. Cover is offered against 43 surgical procedures.
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Income Benefit:
This rider pays the 10% of the sum assured to the nominee every year, till
maturity, in the event of the death of the life assured. It is available on Smart Kid,
Secure Plus and Cash Plus.
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 Secure Plus and Cash Plus.
LIC Vs ICICI Prudential

With private players paying much attention to advertising and promotional
activities, LIC, too, was forced to make efforts to increase its visibility and enhance its
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brand image. The company commenced intense, systematic and well-focused public
relations and publicity activities both at the corporate and operational levels.LIC upped
its ad spend to tackle competition and succeeded in forging way ahead. LIC has
advertised in satellite channels as well as terrestrial channels. LIC has to reach out to
non-resident India policy holders as well as its other corporate customers who are based
abroad. ICICI Prudential has advertised on several channels from the Star TV bouquet,
Zee Network and Sony. The company have spent about Rs 50 million on TV
advertising last year. With the geographical expansion, TV became a viable medium and the
corporate campaign for ICICI Prudential Life was run on TV, because the medium lends
itself well to an emotional type of films that strike a chord with the audience. Product
advertising, which needs to impart information, was largely done through print and
outdoor channels, as these are appropriate for rational type of messages, ICICI
Prudential Life Insurance campaign was short-listed as one of the 12 most effective
campaigns for the year 2001 in the EFFIE awards. According to an ORG MARG study,
the ICICI Prudential brand name and advertising had the highest recall amongst all private
players, and was only marginally behind LIC.ICICI Prudential Life was awarded the
INDYs Award for Excellence in Mass Communication in the category of Most
Creative Advertisement-Television.
SWOT Analysis
LIC
Strengths
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It is the oldest and most well experienced player having a Pan India presence.
LIC has a strong and very well developed distribution network.
It is having a huge consumer base and is evolved as one of the most powerful brands of the
country.
It has a large product portfolio and claim settlement is easier to get.
It has the advantage of its own as the government guarantee is accompanied with it.
Weakness
Its employees and other staff are lethargic and least motivated to render prompt and
sincere customer service.
Agents not taking into account the needs of people and promote policies having high
commissions only.
Very slow decision making process and internal problems between top management and
lower cadre staff.
Large scale corruption in offices.
Opportunities
Emergence of a huge middle income consumer market in the country.
People becoming more aware and demanding so there is scope for a whole lot
of innovative products.
Pension markets, health insurance and large real estate portfolio.
Threats
There is too much internal discord.
Entry of new private players in industry.
ICICI PRUDENTIAL
Strength
ICICI Prudential is No. 1 private life player in India. Innovative insurance policieswith
rider benefits.
Motivation factors provided by the company.
One of the largest financial Institution of Indias.
Training provided to all people associating with ICICI prudential.
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Highest paid up capital deposited in IRDA, in comparison to all players.

Assets base of ICICI is more than Rs 1,08,000 Crores.
Weakness
Very huge premiums of policies.

Compare to other insurance sector.
Minimum premium is 19000.(Expect tax saving policy only 10,000)
Target upper class people only.
Policy charges are very high.
Poor distribution is in English language only.
Opportunities
Tie up with more corporate agents all over India.

Tie up with broker also
No. of adopting new technology.
Strong Brand of Company Helps to boost sales inn market
Attract more people of providing customer centric products.
Threats
Threat from existing life insurance players

Threat from new entrance.
Threat to substitute products
Change in the policy of IRDA
People dont aware of different distribution channel.
Various promotional advertisements used by LIC and ICIC Prudential
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Marketing strategies of LIC includes promoting their products which is necessary for
life and it acts as saver to the policy holder as well as to his entire family.LIC earlier
just focused on providing life insurance to people but a part of it ICICI PRUDENTIAL
marketing strategies include not only providing the policy holders with a life cover but also
providing them with additional benefits like tax saving schemes etc. As the competition is
increasing LIC has started changing its strategies to provide people with products and
services which are more flexible.
Growth of Life Insurance New Business in India
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With the entry of private insurers in life insurance business, it is

obvious that some proportion of new business will go in the hands of private life
insurers. An attempt, therefore, has been made to study the growth of new business in
terms of policies and premium income of Indian life insurance industry. Further, the
share of private insurers and LIC in total new business has also been studied.
New business policies of life insurance industry increased from 253.71 lac
in 2002-03 to 353.74 lac in 2010-11, registering a growth rate of 16.1 per cent during
the period of study. Similarly, total new business premium of life insurance industry
increased from Rs. 9707.45 crore in 2000-01 to Rs. 92988.71 crore in 2007-08, which
showed a growth rate of 35.1 per cent during the period of study. On the other hand,
LICs new business policies increased from 245.46 lac in 2002-03 to 376.13 lac in
2007-08, showing a growth rate of just 10.4 per cent during the same period. Similarly,
LICs new business premium increased from Rs. 9700.98 crore in 2000-01 to Rs.
59182.20 crore in 2007-08, which has grown at the rate of 26.7 per cent during the
period of study. However, new business policies of private life insurers increased from
25 lac in 2002-03 to 132.61 lac in 2007-08, registering a high growth rate of 72.7 per
cent during the period of study. Similarly, new business premium of private life insurers
increased from Rs. 6.45 crore in 2000-01 to Rs. 33806.51 crore in 2007-08, registering
a significantly high growth rate of 189.6 per cent during the same period. Further, the
share of LIC decreased from 96.75 per cent in 2002-03 to 73.93 per cent in 2007-08 in
terms of policies and from 99.92 per cent in 2002-03 to 63.64 per cent in 2007-08 in
terms of premium. It is worth noting that the percentage share of private life insurers
was higher (36.36%) in case of new business premium as compared to new business
policies (26.07%), which meant that per policy premium income of private life insurers
was higher than LIC during the above period. Coefficient of variation stood at 20.85 per
cent and 96.36 per cent in terms of policies for LIC and private life insurers
respectively. Similarly, coefficient of variation stood at 66.37 per cent and 131.59 per
cent in terms of premium for LIC and private life insurers respectively. This shows that
growth was more consistent for LIC as compared to private life insurers both in terms
of policies and premium. Higher turnover ratio is not a good sign for life insurance
industry because it leads to increase in cost and losses due to huge amount spent on the
training of individual agent.
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The state run insurance company has the biggest advantage of its huge
network which the company can use to penetrate into rural market that is still lying
untapped. Another option with the life insurance companies to capture more and more
market share could be product innovation and constantly developing an insurance
product in order to meet the ever-changing requirements of the customer. Quality
customer service and education can be another area where a company can differentiate
itself from other companies.
IT to boost life market growth:THE LIFE Insurance Corporation of India (LIC) has turned to information
technology in a bid to shed its image as a dinosaur among more nimble private sector
companies.LIC, India's dominant life insurer, is encouraging policyholders to use its
web site to pay premiums and make claims. Last- month, it announced new mobile
phone SMS(testing) services to alert policyholders of news about their plans. These
moves, unmatched by most of LIC's smaller private sector rivals, are part of an effort to
open new channels to increase the speed and quality of customer service -long seen as
LIC's weakness after decades as India's monopoly life insurer. LIC's performance in the
year to March 2004 suggests that these efforts are working. It sold 27 million new
policies generating Rs85.7 billion (US$1.9 billion) in premium income- an annual
growth of about 11 percent. LIC's deployment of information technology may have
helped it maintain its 88 percent market share of premium sales.
Yet few believe that technology alone will drive the company's - and in
effect, the Indian life industry's expansion."Ultimately the growth of life insurance
depends on growth of the economy," said TK. Banerjee, a board member of the
Insurance Regulatory Development Authority. India's economic growth rate in March
2004 hit double-digit figures to become Asia's fastest-growing economy. Most
economists forecast growth to stabilize at around 7 percent to 2005. Banerjee said that
this climate of rising economic prosperity is is encouraging consumers to think more
about insurance. Nonetheless, most life companies believe consumers still need Samar:
"People still don't think that insurance is important. Most sales happen after personal
interaction."AMP Sanmar, a two-year old joint venture between south.-Indian based
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conglomerate Sanmar and Australia's AMP, has employed some 3,000 sales agents w4o
are targeting small and medium-sized towns that have low penetration rates of life
insurance. India's life insurance penetration is less than three percent. "We're focus don
places where there is no other company - not even LIC," Subramaniam said,-remarking
that unlike LIC, AMP Sanmar regards the internet and mobile phones as channels for
promotion, not sales. He said that the internet is not widespread as a channel to sell
consumer products in India, but Subramaniam has not ruled out deploying such
technology in the future. Whatever the merits of new distribution channels, the industry
fears a decline in sales following new taxes levied on single premium products.
Single premium life insurance has been popular in India mainly because
guaranteed returns were tax-free. This encouraged policyholders to pay large premiums
with minimal risk cover, for payments at maturity that often exceeded the returns of
more sophisticated financial products such as mutual funds. But last October, the
government decided to tax premiums that paid above 20 percent of the sum assured.
The decision has reduced sales of single premium products, which is likely to restrain
the overall growth of India's life industry. The industry regulator has forecast growth of
life premiums to be around 20 percent to March -2004, about the same level as 1999,
down from a burst of sales in 2002 of 43.5 percent. India's life insurers have rallied to
persuade the government to rescind the ruling later this year, but any decision must wait
for the end of parliamentary elections currently underway.
IRDA warns LIC, ICICI Prudential for violation of anti-money

laundering guidelines
Both companies were found not adhering to AML guidelines.
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IRDA has warned LIC and ICICI Prudential Life Insurance for violation of Anti
Money Laundering (AML) norms and directed them to strictly comply with these
norms while issuing insurance policies to their customers.
IRDA found that LIC failed to check multiple cash transactions aggregating more
than Rs 50,000 made by a single person. The insurance regulator has asked state
owned company to put in place a system to detect and monitor multiple cash
transactions by a single person. It said, The life insurer is advised to put in place
specific systems and controls to ensure avoidance of possible attempts by customers
to circumvent the requirement of submission of PAN/Form 60/61."
IRDA has also found some instances where LIC used declaration of their
Development Officers (DO) as a valid proof of address while issuing the policy
documents to customers. The regulator has advised the insurer to avoid such practice
as it has potential conflict of interest.
In another circular, IRDA found that despite having a better system in place, the sales
staff of ICICI Prudential didnt intimate the company about suspicious customers who
insist on anonymity and are reluctance to provide proper information. It said, The
good system seemed to have been rendered ineffective due to lack of appreciation and
seriousness on the part of frontline employees and salespersons involved. However, it
is taken into account that no transactions have actually taken place and the life insurer
is hereby cautioned to sensitize all its employees, agents and corporate agents etc. on
scrupulously following the provisions of the internal instruction manual and the
requirements of AML compliance with respect to reporting of Suspicious Transaction
Reports (STRs).
The insurance regulator also found that the ICICI Prudential had not conducted
training for their corporate agents. It has asked ICICI Prudential to put in place a
training system for their corporate agents.
IRDA has asked the company to closely monitor their operations in various branches
and directed them to strengthen its internal control over operational procedures of its
branches. It asked the company to put in place an effective internal control over
branch operations as the employees of the insurer collected forged documents of
identity proof, address proof, income proof from policyholders. Earlier this month,
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IRDA had directed Birla Sun Life and Max Life Insurance to comply with AML
guidelines.
Challenges faced by the Insurance Industry
The Indian insurance industry seems to be in a state of flux. After a decade

of strong growth, the Indian insurance industry is currently facing severe headwinds owing
to:
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Slowing growth
Rising costs
Deteriorating distribution structure
Stalled reforms
Indian economy and the insurance industry landscape
Despite strong improvement in penetration and density in the last 10 years,

India largely remains an under-penetrated market.
Despite strong improvement in penetration and density in the last 10 years, India
largely remains an under-penetrated market. The market today is primarily dependent
on push, tax incentives and mandatory buying for sales. There is very little customer
pull, which will come from growing financial awareness and increasing savings and
disposable income.
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Source: IRDA Annual Report 2010-11

In the long run the insurance industry is still poised for a strong growth as the domestic
economy is expected to grow steadily. This will lead to rise in per capita and disposable
income, while savings are expected to be stable.
Insurance growth drivers in India

The demand for insurance products is likely to increase due to the
exponential growth of household savings, purchasing power, the middle class and the
countrys working population. Listed below, are the various underlying growth drivers
for Indias insurance industry:
Growing of the financial industry as a whole
Growth of life and non-life industry
Promoting innovation and removing inefficiency
Competition and orderly growth
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Growth of specific insurance segments such as motor insurance
Emerging trends
Multi-distribution i.e. increasing penetration through new modes of distribution

such as the internet, direct and telemarketing and NGOs
Product innovation i.e. increased levels of customization through product

innovation
Claims management i.e. timely and efficient management of claims to prevent

delays which can increase the claims cost
Profitable growth i.e. expanding product range, developing innovative products

and expanding distribution channels
Regulatory trends i.e. mandated regulatory changes by the IRDA to promote a

competitive environment in both the life and non-life insurance sectors
Life insurance: key challenges

In FY12, the life insurance industry witnessed a decline in the first year premium
collected which dropped from INR1, 258 billion in FY11 to INR1, 142 billion, a drop
of approximately 10%. This was owing to the following challenges that the industry
faced in
Products strategy and design
Cost
Taxation
Distribution
Prospects and challenges of various channels
Compensation
Customer service
Governance and regulatory issues
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Data Analysis and interpretation

1. Table:Do you think that the services of
ICICI
Prudential
advancing then LIC?

Yes
No
Total
are
more
Respondents
Number
percentage
27
23
50
54
46
100
Table shows that 54percent of respondents say that ICIC Prudential are more advance
than LIC.
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2. Table :Are you satisfied the

services provided by the
insurance company?
Highly satisfied
Satisfied
Neutral
Dissatisfied
Highly dissatisfied
Total
Respondents
ICICI Prudential
Number
Percentage
7
5
2
1
15
14
10
4
2
30
Number
27
6
2
35
LIC
Percentage
54
12
4
70
ICICI Prudential
14% people are highly satisfied from their insurance company.
10% people are satisfied from their insurance company.
LIC
54% people are highly satisfied from their insurance company.
12% people are satisfied from their insurance company.
Interpretation
From the table and chart it has been concluded that most of the people are highly satisfied
from LIC branch.
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LIMITATIONS OF THE STUDY

As the study of specific area is restricted, and time allotted is very limited for making
project. If time permits then there would be a wide scope of study on specified topic.
Study/ Project on a specified topic have page constraint. The information which is
provided is not enough for in-depth study of the topic.
Practically, in each and every single day trends keep on modifying, therefore, it is
difficult to give the current status of the study.
If there would be work experience then there will be different view of the study.
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Due to lack of practical knowledge there is limited view of the project.
Most of the people are of the thought that private life insurance company will not last
for long and hence; they prefer to invest in Government undertakings.
Professionals like Doctors, Engineers, and Chartered Accountants do not see it as

prestigious profession and perceive it as a marketing job.
RECOMMENDATIONS
In the modernized well advanced hi-tech approach to the customer every
possible facilities and effort to build up the confidence of the rising policy holders
towards. Insurance companies, to complete one another nothing is left to recommend.
But some recommendations that are intensely felt and highly required for insures to
sustain in the market. These are as follows:
a) LIC and ICICI Prudential should work upon raising the awareness of the product and
give more option and provide transparency so as to make selling of its product easier.
b) Particularly, in the emerging boom in the insurance company, every insurance
company should be customer cantered, and well versed in the handling of problem and
grievances of the policy holders.
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c) Each and Every product launched by the Insurance Company should be

in favour of increasing need of policy holders. IRDA should be more and more
responsible to the insurance sector by determining some standard. It should be
mandatory to every insurer to make more and more responsible and responsive to the
policy holders so that comprehensive understanding may be developed among policy
holders. It may be beneficial on both sides.
d) LIC and ICICI Prudential should work upon building good reputation of its brand
as good reputation has direct effect on purchase of insurance product.
e) Advertising of the insurance product should stress on the need of security.
f) Policies should be issued quickly and with less formality.
CONCLUSION
The majority of India is rural. This market cannot be ignored. In small
market the credibility of the Indian pattern goes along with. The Tata name is valuable
here. However, science the level of awareness is much lower than in urban India, the
distributing strategy has to be different. Distinct has to be formulated for cash collection
and medical facilities. In the absence of this, companies tend to offer simple and easy to
buy and sell policies in most centres. This market demands tailored dedicated insurance
products, for them, is a matter of secure saving for the future.
Mindsets are changing, but purchase pattern are not. The month of
February and March still are busiest at LIC. The traditional hook of tax incentives and
savings will take a long time to change. Private players need to step up their selling in
terms of need and protection. The life insurance industry is growing at 15 to 20 percent,
TYBBI
49
and that there is enough space for all the players to thrive because there are so many
things as too much insurance. As the market grows, more generic products will be put
out, but there will be a differentiation in individual products as compared to similar
products in endowment policies, whole life and pension plans. Currently, LIC
dominates the endowment market.
Private players are major stakeholders in whole life insurance, pension
plans and term insurance. They have made a sizeable dent by capturing 40% of the
market. Efficient customer service channels differentiate private players from the
traditional model. Many companies provide better service today than they did two years
ago. The customer gets quicker turnaround of claims and access to faster processing.
This is a welcome change for a customer who was used to LIC previously. Insurance
companies are now providing information about their performance on a regular interval
to bring transparency in declaring.
Getting work done by the insurance advisor needs constant support of the manager.
Since the advisor are the people who bring business to the company so lot of
motivation, encouragement, and support are required. One thing is very good at ICICI
Prudential that this advisor get lot of recognition award apart from their commission.
The infrastructure support is also fabulous which help them to meet the clients demand.
With so much of competition profile of the person who has to recruit as an

agent should be fantastic. People, who had that drive, are independent, required flexible
working hours; want to be their own boss, who loves to interact people, who were
financial consultant or chartered accountant etc.
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Bibliography
BROCHURES / INFORMATION BOOKLETS
Product List L.I.C.
L.I.C. Annual Report
ICICI Annual Report
Malhotra Committee Report on Reforms in the Insurance Sector, 1993.
The Insurance Regulatory and Development Authority Bill, 1999.
BOOKS
Dr. Gupta S.P& Dr. Gupta M.P., Business Statistics by Addition 2004, NewDelhi,
WEBSITES
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www.liclndia.com
www.lrdaindia.org.com
www.indiainfoline.com
www.icici.com
www.iciciprulife.com
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