Beruflich Dokumente
Kultur Dokumente
On
Consumer Perspective Towards
Insurance Sector
Roll No-40796701716
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CERTIFICATION
This is to certify that Sucheta Manke student of BBA 3 th semester has prepared her
prepared a project report on topic: Consumer perspective towards health insurance
corporation under the guidance of Mrs. Jaspreet( Assistant Manager at Omnis health care
pvt.ltd) for the fulfillment of summer internship project .
Signature
Mr.
()
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ACKNOWLEDGEMENT
I also put forward my heartiest thanks to Mr. . (Director Omnis health care pvt ltd )
for his great support in completion of this project.
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Preface
The Business of Insurance is related to the protection of the economic values of the
assets. Every human being has the tendency to save to protect him from risks or events
of future. Insurance is one form of savings where in people try to assure themselves
against risks or uncertainties of future. It is assurance against risks or events or losses.
People can save their earnings either in the form gold, fixed assets like property or in
banking and insurances. All the savings of people of a country account for gross domestic
savings. In India, although savings rate is high but people prefer to invest either in gold or
fixed assets so that they can make money out of it. Hence insurance sector is still
untapped in India. Insurance is a tool by which fatalities of a small number are
compensated out of funds (premium payment) collected from plenteous. Insurance is a
safeguard against uncertain events that may occur in the future.
It is an arrangement where the losses experienced by a few are extended over
several who are exposed to similar risks. It is a protection against financial loss arising on
the happening of an unexpected event. Insurance companies collect premium to provide
security for the purpose. Loss is paid out of the premium collected from people and the
insurance companies act as trustees to the amount so collected. These companies have
proposal forms which are filled to give details of insurance required. Depending upon the
answers in the proposal form insurance companies assess the risk and decide on the
premium.
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TABLE OF CONTENTS
APPENDIX 101-105
Bibliography 101
Questionnaire 102-105
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Chapter-1
Introduction
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1.1 INDUSTRY PROFILE
1. WHAT IS INSURANCE?
Insurance is a tool by which fatalities of a small number are
compensated out of funds (premium payment) collected from plenteous. Insurance is a
safeguard against uncertain events that may occur in the future.
It is an arrangement where the losses experienced by a few are extended over
several who are exposed to similar risks. It is a protection against financial loss arising on
the happening of an unexpected event. Insurance companies collect premium to provide
security for the purpose. Loss is paid out of the premium collected from people and the
insurance companies act as trustees to the amount so collected. These companies have
proposal forms which are filled to give details of insurance required. Depending upon the
answers in the proposal form insurance companies assess the risk and decide on the
premium.
Insurance companies are risk bearers. They underwrite the risk in return for an
insurance premium. the function of insurance is to provide protection, prevent losses,
capital formation etc. hence insurance can be defined as a tool in which a sum of money
as a premium is paid by the insured in consideration of the insurers bearing the risk of
paying a large sum .it may also be defined as a contract wherein one party (insurer)
agrees to pay the other party (insured) or his beneficiary, a certain sum upon a given
contingency against which insurance is required.
Insurance industry commands massive funds through sales of insurance products
to large number of clients. Insurers also create liabilities and commit themselves to
compensate for losses occurring to the policyholders on future date. It also plays an
important role in process of capital formation.
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2. NATURE OF INSURANCE
a) Risk sharing and risk transfer: Insurance is used to share the financial losses that
might occur to an individual or his family on the happening of specified events. The loss
arising from such events are shared by all the insured in the form of premium.
Example: suppose in a village, there are 250 houses, each valued at Rs.200000.Every
year one house gets burnt, resulting into a total loss of Rs 200000.If all the 250 owners
come together and contribute Rs.800 each, the common fund would be Rs200000.This is
enough to pay to the owner whose house gets burnt. Thus the risk of one owner is spread
over 250 house owners of the village.
b) Risk assessment in advance: Insurance companies are risk bearers. They assess the
risk before insuring to charge the amount of premium.
3. SEMANTICS
1. Risk: It is defined as an uncertainty of a financial loss. It is the unintentional
decline in or disappearance of value arising from contingency.
2. Policy: It is the document which embodies the insurance contract
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3. Whole life policy: It is the policy under which the amount of policy will be paid
only on death of the insured. Premiums may be payable throughout the life or for
a limited period.
4. Endowment policy: Endowment policies entitle the insured to receive the
amount of the policy on his reaching a certain age and premiums also stops. If
death occurs earlier, amount of the policy will be paid at that time and payment of
premium will also stop at that time.
5. Claim: It is the amount which an insurer has to pay against a policy.
6. Reinsurance: It refers to placing a part of the risk by an insurer with another
insurer. The object is to reduce the possible loss to be borne by the original
insurer, who pays premiums at the ordinary rates to the reinsurer. Reinsure must
pay commission to the original insurer.
7. Premium: A periodic payment made on an insurance policy.
8. Insurance penetration: It is defined as insurance premium as a share of gross
domestic product.
9. Insurance density: Insurance density is defined as per capita expenditure on
insurance premium i.e. premium per capita.
10. Actuary: The actuary is a specialist who combines an understanding of risks and
mathematical technique to develop financial products to manage these risks, price
these products. He helps in designing insurance plans and then evaluates the
financial risk of the company which it takes while selling an insurance policy.
4. TYPES OF INSURANCE
Insurance is broadly divided in two segments, based on the nature of insurance, those are:
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c) Social Insur
d) Misc
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finance their trading expeditions. In case, if a ship was lost, the owners were not
responsible to pay back the loans to the investors. The risk to the lenders was covered by
the interest paid by numerous ship owners, since many ships returned safely.
By the middle of the 14th century, marine insurance was one of the most popular
types of insurance among nations of Europe. Things changed dramatically in the 17th
century in Europe. In 1666, the Great Fire of London bought the need for fire
insurance .The Great Fire of London burned for four days and nights. It destroyed 436
acres, 13,200 houses, 89 churches (including Saint Paul's Cathedral), the Custom House,
the Royal Exchange and dozens of other public buildings. Only six people were victims
in the flames, but hundreds died from shock and exposure.
By 1688, Edward Lloyd was running a coffeehouse in London. Where, London
merchants and bankers met informally to do business. There financiers who offered
insurance contracts to seafarers wrote their names under the specific amount of risk that
they would accept in exchange for a certain payment, called premium. These insurers
came to be known as underwriters. Finally, in 1769, Lloyd's became a formal group of
underwriters that in time grew as an insurance company.
The concept of insurance developed at a fast pace with the growth of British
commerce in the 17th and 18th century. The first stock companies to engage in insurance
were chartered in England in the year 1720.
In 1735, the first insurance company in the American colonies was founded at
Charleston. Later in the year 1787, fire insurance corporations were formed in New York.
Then later in the year 1759, the life insurance corporation was started in Philadelphia,
America.
The New York fire which occurred in the year 1835 was the main reason to draw
attention to create reserves to meet unexpected losses. In the year 1837, Massachusetts
was the first state to require companies by law to maintain such reserves. After 1840, life
insurance entered a boom period.
The Workmen's Compensation Act of 1897 in Britain required employers to
insure their employees against industrial accidents. Public liability insurance, fostered by
legislation, made its appearance in the 1880s.It attained major importance with the advent
of the automobile.
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Until the 1950s, most insurance companies in the United States were restricted to
provide only one type of insurance, but then legislation was passed to permit fire and
casualty companies to underwrite several classes of insurance. Many firms have since
expanded and also were responsible for many mergers.
From this brief accounting of history we can see how insurance came into
existence. Fortunately for us we no longer have to sell ourselves into slavery if our car is
stolen nor we have to be scared of losses due to absence of reserves. However we can be
confident that we will be compensated for our loss. Without people wanting to secure
their investments and great tragedies throughout history we may not have insurance as we
know it today resulting in peace of mind.
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1907.By 1938; the insurance market in India had nearly 176 companies (both life and
non-life).
After the independence, the industry went to the other extreme. It became a state-
owned monopoly. The industry started to witness a problem like fraud. Hence many
regulations were put in place to reduce and control the problems in the industry. After
which Insurance was nationalized. In 1956, the then finance minister S. D. Deshmukh
announced nationalization of the life insurance business and then the general insurance
business was nationalized in 1972. Only in 1999 private insurance companies have been
allowed back into the business of insurance with a maximum of 26% of foreign holding.
7. INDIAN SCENARIO
INDIAN
INSURANCE INDUSTRY
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8. LIFE INSURANCE
After the entry of new players and increase in the penetration levels, could see the
insurance sector cross the Rs 2,00,000-core mark in business by 2010.The current size of
the sector is estimated to be at Rs 50,000 crore, which has seen a compound annual
growth rate (CAGR) of around 175 percent in the last few years.
The insurance sector, both life and non life, is likely to grow by over 200 percent,
and private insurers are expected to achieve a growth rate of 140 percent as a result of
aggressive marketing technique. It added that state owned insurance companies are likely
to be 35-40 percent.
On account of intense marketing strategies adopted by the private insurance
players, the market share of state-owned insurance companies like GIC, LIC and others
has come down to 70 percent in last 4-5 years from over 97 percent. Despite regulation,
the private players are offering 35 percent rate of return to is policy holders against 20
percent by public-sector insurers.
The industry body also noted that Indias life insurance premium is 1.8 percent as
a percentage of GDP whereas it is 5.2 percent in the US, 6.5 percent in the South Korea.
The services sector offers immense opportunities for expansion opportunities for
expansion opportunities and the rural market, also, offers tremendous growth
opportunities for insurance companies.
9. GENERAL INSURANCE
General insurance in India has been expecting growth except in some portfolios
like motor insurance, fire and engineering. These portfolios are still under tariff- this
means that premium depends on a fixed predetermined rate structure.
In India, GDS as a proportion of GDP at current prices increased from 26.1% in
2002-03 to 28.1% in 2003-04.house hold sector continued to be the major contributor to
GDS at 24.3% in 2003-04.this can be attributed to soft interest rates prevailing in housing
sector. General Insurance has low market penetration. It is 1.95% and ranks 51st.
However in collection of premium it is ranked 23rd. The ratio of the premium collected to
that of GDP is 0.58. The main reason for the general insurance industry to perform very
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poorly was because of the slow settlement of claims. Moreover the rates of claim in India
were highest in the world. It was 70 percent compared to 40 percent internationally. This
meant that out of 100 people who had insured their commodities 70 claimed for a loss or
damage. The main reason for the lack of demand for general insurance is that people
consider it as an unnecessary expenditure. However it must be noted that the general
insurance has been earning consistent profits and has an efficient dividend paying record
accompanied by a steady growth in its financial resources. The industry is recognized as
one of the largest financial Institutions in the country. Some of the private players in this
sector are- ICICI Lombard, Reliance, Royal-Sundaram, Chholamandalam etc.
The different private players in the life insurance sector and their associations with
foreign companies are being given below:
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Kotak Kotak Mahindra Bank OldMutual (South 2,600 26 680
Mahindra Africa)
Old Mutual
Max Max India NewYorkLife 5,000 26 1,300
Newyork (US)
Met Life J&K Bank Met Life (US) 3,550 26 920
Sahara Life Sahara India None 1,000 0 0
Ins. I
SBI Life SBI Cardiff (France) 3,500 26 910
TATA AIG TATA Group AIG (US) 3,810 26 990
Shriram Shriram Sanlam Life Ins.
Bharti AXA Bharti Group AXA(Australia)
Some of the new companies who are waiting to come in to the life insurance sector are:
a. IDBI-FORTIS.
b. Syndicate Bank
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11. CONTRIBUTION OF THE INSURANCE SECTOR TO INDIAN ECONOMY
Some surveys have predicted that India and China will play a very vital role in the
years to come. Indian economy can be termed as an emerging economy as it is doubling
its GDP in 3 to 5 years and moreover it is not dependent on any particular sector for its
GDP.
If we look at the GDP of the Indian economy very closely over the years, we can
easily come to know the changing structure of the economy. We can also come to know
the changing contribution of the various sectors like agriculture, manufacturing and the
service sector. In the financial year 1993-94, agricultural sector contributed to 31%,
manufacturing accounted to 26.3% and the service sector contributed to 42.7% of the
total GDP of the country. Thus over the years as India became an emerging economy in
2003-04 manufacturing sector contributed for 21.7 %, manufacturing contributed for 26.8
whereas service sector contributed for 51.4% of the total GDP.
There has been 7.5% growth in the total GDP of the country and is estimated to
grow at 8.0% in 2006-07. The Indian economy has shown signs of strong performance
despite a rise in oil prices, high inflation rate and abnormal rains in many parts of the
country. The overall growth of the Indian economy has been equally supported by all the
three sectors of the economy, i.e. the agriculture, manufacturing and the service sector.
Insurance, together with the banking sector, contributes to about 7.3 % of the total GDP
of India, and the gross premium collected contributes to about 2% of the total GDP of the
country
The insurance sector in India has completed a full circle from being an open
competitive market to nationalization and back to a liberalized market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn witnessed over a
period of almost 200 years.
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12. GOVERNMENT POLICIES REGARDING LIFE INSURANCE
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1.2 COMPANY PROFILE
The Industrial Credit and Investment Corporation of India Limited (ICICI) was
formed in 1955 which is incorporated at the initiative of the World Bank, the Government
of India and representatives of Indian industry, with the objective of creating a
development financial institution for providing medium-term and long-term project
financing to Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first Chairman
of ICICI Limited. ICICI emerges as the major source of foreign currency loans to Indian
industry. Besides funding from the World Bank and other multi-lateral agencies, ICICI
was also among the first Indian companies to raise funds from international markets.
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2. STRUCTURE OF ICICI GROUP
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INNOVATION
We believe that the cornerstone of success in todays competitive environment is
Innovation. We seek newer opportunities constantly, to fulfill your emerging needs and
wants.
4. ICICI BANK
ICICI Bank is India's second-largest bank with total assets of Rs. 3,767.00 billion
(US$ 96 billion) at December 31, 2007 and profit after tax of Rs. 30.08 billion for the
nine months ended December 31, 2007. ICICI Bank is second amongst all the companies
listed on the Indian stock exchanges in terms of free float market capitalization*. The
Bank has a network of about 955 branches and 3,687 ATMs in India and presence in 18
countries. ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialised subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital and asset management. The Bank currently has subsidiaries in
the United Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain,
Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative
offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia
and Indonesia. Our UK subsidiary has established branches in Belgium.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its
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management companies in the country with assets under management of Rs. 37,906.24
crore (as of March 31, 2007). The Company manages a comprehensive range of schemes
to meet the varying investment needs of its investors spread across 68 cities in the
country.
Key Indicator:
During the year march 1998 Asset Under Management was Rs160 cores with only
two funds managed, as on February 29, 2008 now it raised up to Rs 62,008.95 cores with
35 funds.
A subsidiary of ICICI Bank - the largest and most recognized private bank in
India ICICI Securities Ltd is premier Indian Investment Bank, with a dominant position
in its core segments of its operations - Corporate Finance including Equity Capital
Markets Advisory Services, Institutional Equities, Retail and Financial Product
Distribution With a full-service portfolio, a roster of blue-chip clients and performance
second to none, we have a formidable reputation within the industry.
The Corporate Finance team regularly ranks highest among the leading capital
markets league tables and recently topped the Prime Database League tables for funds
mobilized through equity instruments in the first half of CY 07.
ICICI Securities Inc., the step down wholly owned US subsidiary of the company
is a member of the National Association of Securities Dealers, Inc. (NASD). As a result
of this membership, ICICI Securities Inc. can engage in permitted activities in the U.S.
securities markets. These activities include Dealing in Securities and Corporate Advisory
Services in the United States and providing research and investment advice to US
investors.
ICICI Securities Inc. is also registered with the Financial Services Authority, UK
(FSA) and the Monetary Authority of Singapore (MAS) to carry out Corporate Advisory
Services and Dealing in Securities.
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C) ICICI VENTURE
ICICI Venture is one of the largest and most successful private equity firms in
India with funds under management in excess of USD 2 billion.
ICICI Venture, over the years has built an enviable portfolio of companies across sectors
including pharmaceuticals, Information Technology, media, manufacturing, logistics,
textiles, real estate etc thereby building sustainable value.
It has several firsts to its credit in the Indian Private Equity industry. Amongst them are
Indias first leveraged buyout (Infomedia), the first real estate investment ( Cyber
Gateway), the first mezzanine financing for a acquisition (Arch Pharmalabs) and the first
royalty-based structured deal in Pharma Research & Development (Dr Reddys).
ICICI Venture is a subsidiary of ICICI Bank, the largest private sector financial services
group in India.
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E) ICICI PRUDENTIAL LIFE INSURANCE COMPANY
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,
a premier financial powerhouse, and Prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential 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 Life's capital stands at Rs. 37.72 billion (as on February, 2008)
with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the
nine months period April 1 to December 31, 2007, the company garnered new business
weighted premium of Rs. 4,586 crore and has underwritten around 18 lakh policies
during the period. The company has assets held over Rs. 28,000 crore.
ICICI Prudential Life is also the only private life insurer in India to receive a
National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA
(Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to
meet its obligations to customers at the time of maturity or claims.
For the past seven years, ICICI Prudential Life has retained its leadership position
in the life insurance industry with a wide range of flexible products that meet the needs of
the Indian customer at every step in life.
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a) VISION
To be the dominant Life, Health and Pensions player built on trust by world-class
people and service.
The success of the company will be founded in its unflinching commitment to 5 core
values ,Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the
values describe what the company stands for, the qualities of our people and the way we
work.
b) VALUES
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c) DEPARTMENTS AND BRANCHES OF ICICI PRUDENTIAL LIFE
INSURANCE COMPANY LIMITED
Branches:
ICICI Prudential Life has one of the largest distribution networks amongst private
life insurers in India. It has a strong presence across India with over 945 branches in
addition to 550 micro-offices and an advisor base of 270,000.
Distribution Network:
There are four different ways of distributing a Life insurance product namely;
2. Corporate Agents Any corporate may apply for license to sell insurance after
complying with the requirements of IRDA.
4. Broker They are like corporate agents with only difference that they can sell
the products of more than one insurance company.
Departments:
The various departments that can be seen in an insurance organization and that has
been observed by me are as follows:
a) Marketing Department: This department mainly deals with the marketing and
promotion part of the Insurance Company. They spend most of their time in
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formulating strategies to make their products known to the common people and to
promote the same in a easy and cost effective way.
b) Sales Department: This department mainly deals with the sales part of the
Insurance Company; the department includes designations like Sales Manager and
Financial Advisor who personally contacts with people for performing the task of
sales of various products.
c) Accounts/ Financial Department: This department has the task of keeping track
of the various expenses incurred by the various other departments of the
organization and also performs the task of allocating various funds to different
departments according to their requirements.
d) Human Resource Department: This department is handled by the Human
Resource manager of the company. The function of this department involves the
well being of the employees of the company, I,e, to see whether there is employee
grievance in the organization or not and if it is there what are the possible causes
for that and also try to find out solutions for the same if possible.
e) Investment Department: This department deals with the task of investing the
money of the policy holders in such way that will ensure both safety of the money
and also a steady return on the same. The task of this department is very difficult
as it deals with the money given by the policy holders, so it requires lot of
thinking on the part of the personnel of this department before deciding where to
invest the money.
f) Actuarial Department: This department is under the supervision of an Actuary
who decides the premiums and charges to be taken from the policy holder on the
basis of certain informations (like Age, Annual Income etc.) provided by the
prospective customer. The task also involves the calculation of mortality charges
which requires high statistical knowledge from ones point of view. So, this
department involves in the calculation of various amounts to be charged from the
prospective customers.
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d) ICICI PRUDENTIAL LIFE INSURANCE PRODUCTS
Insurance Solutions for Individuals
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Protection Solutions
LifeGuard is a protection plan, which offers life cover at low cost. It is available
in 3 options - level term assurance, level term assurance with return of premium
& 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.
Retirement Solutions
ForeverLife is a traditional retirement product that offers guaranteed returns for
the first 4 years and then declares bonuses annually.
LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers 5 annuity options (life annuity, life
annuity with return of purchase price, joint life last survivor annuity with return of
purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter,
joint life, last survivor annuity without return of purchase price) at the time of
retirement.
LifeLink Super Pension is a single premium unit linked pension plan.
Immediate Annuity is a single premium annuity product that guarantees income
for life at the time of retirement. It offers the benefit of 5 payout options.
PremierLife Pension is a unique and convenient retirement solution with a
limited premium paying term of three or five years, to suit professionals and
businessmen, especially those who require more flexibility and customization
while planning their finances.
Health Solutions
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Health Assure Plus: Health Assure is a regular premium plan which provides
long term cover against 6 critical illnesses by providing policyholder with
financial assistance, irrespective of the actual medical expenses. Health Assure
Plus offers the added advantage of an equivalent life insurance cover.
Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis
as well as at different stages in the treatment of various cancer conditions.
Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care
and also provides an additional benefit of free periodical cancer screenings.
Diabetes Care: Diabetes Care is a unique critical illness product specially
developed for individuals with Type 2 diabetes and pre-diabetes. It makes
payments on diagnosis on any of 6 diabetes related critical illnesses, and also
offers a coordinated care approach to managing the condition. Diabetes Care Plus
also offers life cover.
Diabetes Care Plus: is a unique insurance policy that provides an additional
benefit of life cover for Type 2 diabetics and pre-diabetics
Hospital Care: is a fixed benefit plan covering various stages of treatment -
hospitalisation, ICU, procedures & recuperating allowance. It covers a range of
medical conditions (900 surgeries) and has a long term guaranteed coverage upto
20 years.
Crisis Cover : is a 360-degree product that will provide long-term coverage
against 35 critical illnesses, total and permanent disability, and death.
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1.3 PRODUCT PROFILE
Marine Insurance
ICICI peudentials brings to India a wide range of marine cargo products from various
international markets. Their products considerably widen the scope of coverage presently
enjoyed by the insured population without necessarily involving a high premium.
Burglary insurance
Burglary Insurance for machinery, stock in trade, furniture, fixtures & fittings and for
goods held in trust or on commission for the insured is responsible. Burglary Insurance
covers burglary or housebreaking accompanied by either forcible or violent entry
into/exit from the premises and hold-up.
Engineering Insurance:
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Machinery Breakdown Insurance
A COMPANY extends its hand offering Machinery Breakdown Insurance Cover ably
supported by most capable technocrats to throw more light about the mechanical side of
all machines.
Marine-Cum-Erection Insurance
Liability Insurance:
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Public Liability Act
It provides indemnity against the Insured's liability at law to the public in general
(excluding employees) for bodily injury and loss of or damage to property due to the
business activities carried on in insured's premises.
Business solutions:
Its a wide and comprehensive cover for the large sized business where the assets at all
locations of the insured exceed Rs.100 Corers. It is an All Risks Policy covering a wide
range of perils such as fire and allied perils, burglary, accidental damage, breakdown as
well as business interruption.
Office Shield
A flexible policy specifically designed to meet the insurance needs of your modern office,
irrespective of the number of locations.
Hotel Shield
Tailor-made cover designed to suit the specific needs of the Hotel Industry.
Enterprise Shield.
It is a newly devised package providing total insurance solutions for industries. You do
not need to analyze and evaluate a large number of insurance policies to insure your
business completely.
Education Shield
Traders Shield
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It is an attractive policy that provides shopkeepers with a basic insurance package and a
further range of optional covers.
It offers an overall solution to cover portable items like laptops, mobiles, cameras and
projectors.
It offers cover against fire and allied perils and the perils of nature. The policy can cover
building (including plinth and foundation), plant and machinery, stocks, furniture,
fixtures and fittings and other contents.
Employee solutions:
It is a worldwide cover providing protection for the employees against any accidental
injuries sustained by the individuals resulting in death and disablement.
Group Health
Health Premium Platinum is a comprehensive health insurance package, designed for the
employees of company and their family members.
Workmen's Compensation
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Workmen's Compensation provides cover to target clients as required by law in support to
project insurances or property insurances.
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CHAPTER-2
DEVELOPMENT OF
MAIN THEME
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2.1 NEED OF THE STUDY
This study helps the company to identify its competitive position among its industrial
competitors by which the company can further improve its performance to enjoy high
reputation among clients.
This study also helps in making necessary changes in the attributes of the insurance cover
offered by the company so that the customers can enjoy the benefits of the insurance
cover.
The need for the study also arises to identify and offer additional insurance products
according to the expectations of the customers.
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2.2 OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVES
SECONDARY OBJECTIVES
To find out the strengths and weaknesses of the companys insurance schemes
To identify the customers perception about the company and its products.
To find out the important criteria that people think about before investing in a
life insurance policy.
To find out whether gender bias involved in investing life insurance or not.
To find out the awareness of ICICI Prudential Life Insurance among the people.
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2.3 SCOPE OF THE STUDY
This study has a wider scope among the insurance sector. The study which focuses on
various aspects such as competitive position of ICICI, strengths and weaknesses of
insurance covers, customers perception, etc also holds good for other companies in
the life and non-life insurance segment.
The outcome of the study, which are based on the above aspects can be utilized by
the marketing department of both life and non-life insurance companies.
The result of this research would help the company to have a better understanding
about the consumers perception towards life insurance.
The study helps the company by creating awareness about the consumers of
different ages and income levels.
The study also enables the company to focus the consumers preferences and
expectations on the product which they offer.
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2.4 LIMITATIONS OF THE STUDY
There were certain limitations in undertaking this research work. As it is understood that
the limitations are a part of the project, they have been overshadowed by the benefits of
the study.
Objectives and the purposes of the study and the questions had to be explained to
the respondents and their responses may be biased.
Only limited sample size had been considered for the study and therefore, the
conclusions drawn based on this may not be a reflection of the entire population.The
sample size chosen for the questionnaire was only 100 and that may not
represent the true picture of the consumer perception about the Life Insurance sector.
a) Nearly 98% of the respondent belonged to the age group of 20-50 years
and only 2% were above 50 years. So, the responses and the opinions of
the experienced and aged were not available. So, the findings may not be
correct when we think about the opinion of the elderly people about the
life insurance.
b) The selection of people for the questionnaire was done on the basis of
convenient random sampling, so, there were certain cases in which the
people selected did not have any life insurance policy, so they could not
give any positive feedback regarding the important criteria to be
considered before taking an life insurance policy. So, this further reduced
the actual number of respondents to 76 from 100.
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c) The product offered by different companies had different options and
names in them, so at the time of comparison it became very difficult. The
parameters for comparison were also different in the selected companies.
d) One of the important criteria that was selected by the respondents which
they consider before taking an insurance policy was Company Image,
but there was no parameter available to compare criteria like this between
the companies.
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2.5 REVIEW OF LITERATURE
According to the recent report of Lloyd, the Indian insurance market is likely to change in
the next few years significantly largely due to regulatory changes. In addition, premium
growth is being driven by other factors such as the growing consumer class, increased
foreign direct investment, infrastructure development, and an increased awareness of
catastrophe exposure.
Despite significant positive changes, the insurance market must still face the challenge of
poor customer perceptions and the danger that the pace of reform will slow. Several
significant structural changes are expected in the insurance market that will influence the
countrys development in the medium to long term
So far, the entry of a large number of Indian and foreign private companies has led to
greater choice in terms of products and services for Indian consumers. A growing
realisation of the benefits and importance of sophisticated insurance and reinsurance tools
has broadened the pool of potential buyers of insurance. Given this backdrop, the Indian
insurance market has experienced considerable growth since its liberalisation in 2000.
Over the next three years, the Indian insurance market is likely to see its process of
maturation accelerate. Regulatory changes in the four areas products, market players,
distribution and reinsurance will drive change in the Indian insurance market in the
medium term.
Price competition has already begun to increase and is likely to continue to do so for the
next 18 to 24months.
As Indian insurers build a profitable portfolio, they are likely to have increased access
to the international reinsurance markets.
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Finally, rising demand for insurance is likely to be met by increased capacity as foreign
insurers look to access this growing market.
As per the recent research by Moodys ICRA Global Insurance, the following facts
relating to the performance of both private and public sector general insurance companies
were made.
The private sector share of third party motor business was much lower in the past than
that for public firms as the former did not pursue this market because of its negative
underwriting margins. However, with the formation of the common third party motor
pool, the situation has changed. The losses related to this segment now get shared among
all the players, leaving little incentive to avoid this segment.
Fire and engineering now broadly contribute a similar proportion of overall business for
the private and public sectors. In terms of overall business, the focus has shifted towards
the retail segments of motor and health, where good growth is expected.
Operational Flexibility
The public entities lack the operational flexibility enjoyed by the private players. Their
limited capacity to innovate has impacted their ability to tailor and aggressively price
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products for large corporations. The private players by contrast have focused on account-
level profitability for large corporations and have expanded their shares by cross-
subsidizing tariffed products.
Client Servicing
The public insurers have also been hampered in claims servicing by their process oriented
approach and limited operational flexibility. They have been unable to expedite claim
settlements through out-of-court negotiations since a large proportion of their claims
pertain to the third party motor segment, which is subject to adjudication by the Motor
Accident Claim Tribunal. The result is a time-consuming and involved process.
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Superior Claim Paying/Processing Capability
The combination of superior technology and selective underwriting has allowed the
private sector to set high standards for policyholder services, thereby differentiating
themselves from public sector insurers. The claim settlement performance of the private
sector has also been superior because of the limited amount of third party motor business
that they have underwritten. Such claims normally take a longer time to settle.
One conclusion is certain the Indian non-life market is set to grow dramatically over the
next few years. The simplest forecasts suggest that premium income could double in the
next few years to reach USD11.6bn in 2010. When the structural changes above are taken
into consideration, this growth becomes exponential, with relatively slow growth in 2007
rising to rapid growth by 2010.
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CHAPTER -3
ANALYSIS &
INTERPRETATION
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3.1 RESEARCH METHODOLOGY
SAMPLE DESIGN
The target population of the study consists of various respondents of various
places. This survey was done by collecting the data from the respondents.
SAMPLE SIZE
After due consultation with the company supervisor as well as with the college
guide, also keeping in mind the requirements of the company for the research, the sample
size that was found to be appropriate for the study was 100.
SAMPLING TECHNIQUE
The sampling technique that adapted to conduct the survey was Convenient
Random Sampling and the area of the research was concentrated in the city of Erode
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only. The survey was conducted by visiting different places like colleges, corporate
offices, respondents home etc...
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DATA SOURCE
The task of data collection begins after a research problem has been defined. In
this study data was collected through both primary and secondary data source.
A. PRIMARY DATA
A primary data is a data, which is collected for gathering information first time
and to analyze the problem. In this study the primary data was collected among the
consumers using questionnaire.
B. SECONDARY DATA
Secondary data consist of information that already exits somewhere, having been
collected for some other purpose. In this study secondary data was collected from
company websites, magazines and brochures.
STATISTICAL TOOLS
Simple percentage analysis, ranking method and chi square analysis are the main
statistical tool used for the study.
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RANKING METHOD (WEIGHTED AVERAGE METHOD)
This technique was used to rank out the opinion about the consumers preference
towards different investment alternatives. The order of merit given by the respondents
was converted into ranks by using the following formula.
Weightage Score = Wi * Xj
Where Wi = Weightage value and Xj = Ranking position value
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3.2ANALYSIS AND INETERPRETATION
Interpretation:
LIC market share continued to decline in the period up to June 2007, it declined to
71.56% from 78.23% in the same period last year. On the other hand the market share of
the private players is continuously growing up; it increased to 28.44% from 21.77% in
terms of insurance premium.
Market share of LIC and Private Players
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Market Share among Private players
Bajaj Allianz 21 1
SBI Life 10 0
HDFC Standard 9 1
Reliance Life 9 0
Birla Sunlife 5 -1
Kotak Mahindra 3 0
Old Mutual
Met Life 3 1
Aviva 3 0
Tata AIG 3 1
Max New York 2 -4
ING Vysya 2 -1
Bharti Axa Life 1 0
Sahara Life 0 0
Shriram Life 0 -1
Interpretation:
ICICI Prudential strengthens its position at the top of the heap by increasing its market
share by 4% in the month of Jan 2008, followed by Bajaj Allianze with 21% market
share. These two private players contribute 50% of the total insurance market among the
private players.
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Market Share among Private players
53
Sales Growth among Private players
HDFC Standard 88
Reliance Life 335
Aviva 60
Tata AIG 100
Max New York 40
ING Vysya 74
Bharti Axa Life 362
Shriram Life 91
Interpretation:
Private sector sales continued to be robust at 119% year to year (YoY), up from 118%
YoY last month. The month also saw LIC make up some lost ground by growing faster
than the system at 133% YoY. Among the larger players, Reliance, SBI Life and Birla
Sun Life continued to be the rising stars with the fastest YoY growth rates.
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Sales Growth among Private players
55
Various investment alternatives available to consumers
Let us see what are the various investment alternatives that are available to the people
and among that which are the most preferred one. Now, from the data collected from the
100 respondents which were surveyed through the questionnaire, the following
representation can be made:
Insurance 6.46 II
Interpretation:
From the above table-2.5 it can be seen that ranks for theses investment alternatives
where analyzed by weighted average method. From this analyze we found Bank
Deposits is the most preferred investment alternative among the people with the
average of 6.75, secondly Insurance with the average of 6.46, followed by other
investment alternatives like Post Office (5.57), Gold and Silver (5.33), Real Estate
(5.07), Mutual Fund (4.83), Equity (3.84), PPF (3.78) and least preferred alternative
is that Bond and Debenture (1.74).we understood from this analyze that people prefer
the safe and secure investment alternatives like bank deposits, insurance, real estates,
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than risky investment alternatives like bonds, equities etc.. The reason that can be
attributed for the liking of people towards bank deposit is that people expect safety
for their money they deposit even though there is less appreciation on their deposit.
Secondly insurance, may be because that insurance provides both life cover as well as
security to the holder of the policy and also to the family members of the insurance
holders. Now a days insurance is also providing option to invest in the markets
through plans like ULIP, which gives the holder both the life cover as well as an
opportunity to earn income at the market rate. Then recently real estate is the major
investment alternative among the people particularly among Erode, this is mainly due
to the increase in land value and also good long term investment preference. Gold and
silver also good investment alternative among people due to the frequent appreciation
in the values of gold, next is that mutual fund which is also the preferable investment
alternative due to low risk on their investment, and other alternatives which are not
much preferred were equities, bonds etc. mainly due to the risk involved in it.
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FINDINGS
3.3 FINDINGS
The findings that can be drawn from the survey conducted by us can be summarized in
the following way:
a) Bank Deposits are the most preferred investment alternative which is available to
people followed by alternatives such as Insurance, Real Estate, Gold and Silver,
Mutual etc.
b) It was found that 61 respondents were willing to take a life insurance under LIC
and 33 respondents under ICICI Prudential Life Insurance.
c) Among the 76 insurance holders 63 have policy of LIC whereas only 11
respondents have policy of ICICI Prudential Life Insurance.
d) Only 47% of the total respondents are aware of the joint venture between ICICI
bank with Prudential of UK to form a company called ICICI Prudential Life
Insurance in the year 2000. 22 respondents are interested to invest in ICICI
because of the companys growth potential and brand image that ICICI has.
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e) The scheme mostly preferred by insurance holders was life protection schemes
like death benefits followed by money growth plans like wealth creation and high
return plans.
f) It was found that nearly 50% of the respondents usually save less than 15% and
the kind of investment mostly preferred by the respondents were both long and
short term.
g) According to the survey safety is the most important criterion which is excepted
among all the respondents towards their investment alternatives followed by
Return, Brand Name, Tax Benefits, Liquidity and Capital Growth.
h) According to the study company image is to be the highly important criteria
which we consider before taking up a life insurance this is mainly because people
expect safety and security for their money which they invest, followed by the
factor Premium which we pay to the insurer and then Bonus and Interest paid by
the company, services etc.
i) People who belong to different age groups have different perception regarding the
most important criteria before taking the decision on a life insurance policy.
j) People who belong to different income groups also have different perception
regarding the important criteria concerned with the life insurance.
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3.4 SUGGESTIONS
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3.5S CONCLUSION
Insurance is a tool by which fatalities of a small number are compensated out of
funds collected from plenteous. Insurance is a safeguard against uncertain events that
may occur in the future. Over the last 5 to 6 years, the ICICI Prudential life insurance
company have tripled investors money than the other competent, this progress leads to
increase the company image and makes a way to lead the total insurance market.
Thus the study also comprise company image is the highly important criteria that
consumers consider before taking up a life insurance. This is mainly because people
expect safety and secure for their money which they invest, followed by the factor
Premium which we pay to the insurer and then Bonus and Interest paid by the company,
services etc.
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Bibliography
Websites
http://www.google.co.in/
http://www.en.wikipedia.org/
http://www.rbi.org/
http://www.ekikrat.in/
http://www.seminarprojects.com/
http://www.scribd.com/
http://www.indiatimes.com/
http://www.wikianswers.com/
http://www.slideshare.net/
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APPENDIX
Questionnaire
Dear respondent,
This questionnaire is aimed at understanding your perception about life insurance .Your
response will be dealt with strict confidentiality and it will be used only for academic
purpose. Thank you for spending your valuable time to fill this questionnaire.
Contact No:
2. Age Group:
Below 30 31-40 41-50 51-60
Above 60
3. Educational Qualification:
Under Graduate Post Graduate Diploma
Others (Specify).
4. Occupation:
Student Employed Self-Employed
Others (Specify).
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7. What kind of investment do you prefer?
Short Term Long Term Both
2. Equity/Shares
3. Mutual Fund
5. Post Office
6. Insurance
7. Bank Deposits
8. Real Estate
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9. State your expectation on investment alternatives by ticking according to its
importance.
Safety
Capital Growth
Liquidity
Return
Tax Benefit
Company Profile &
Brand Name
10. Do you have life Insurance Policy? ( If NO then please go to question no. 14)
Yes No
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13. What parameters do you look into before you take up a life insurance Policy?
And tick the following parameter according to your importance.
Parameters
considered before
insurance policy Highly Neutral Least Not
Important Important Important Important
Premium
Charges
Policy Term
Rider Benefits
Accessibility
Company Image
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