THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT NEW DELHI

PROJECT ON ICICI PRUDENTIAL LIFE INSURANCE LTD.

SUBMITTED BY: VISHAL JAIN SEC:- SG1 BATCH:SS/10-12 PHONE NO.7838507330 EMAIL ID.

ACKNOWLEDGEMENT

It is well-established fact that behind every achievement lays an unfathomable sea of gratitude to those who have extended their support and without whom the project would never have come into existence.

I express my gratitude to IIPM, New Delhi for providing me an opportunity to work on this the as a part of the curriculum

EXECUTIVE SUMMARY

This project throws light on the awareness, perception, attitude & expectation of people towards purchasing a Life Insurance products offered by Public & Private players in the Industry.

Given the latest scenario of the potential population to be insured & thus the sizable insurance market, lessons need to be learnt from all the past policies before offering different solutions for specific needs & requirements of the potential customers.

Also a specific policy seems improbable given the countrys vastness & diversity regarding the per capita income, the rural-urban ratio, the varying cultural & social expectations from all the different sectors of the economy.

People are taking Life Insurance policies to save tax. The real benefit of Life cover & future security benefits for the family need to be focused while marketing a Life Insurance product to a potential customer.

TABLE OF CONTENTS

S NO.

Contents

Page No.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

ACKNOWLEDGEMENT EXECUTIVE SUMMARY HISTORY OF INDIAN INSURANCE INDUSTRY MARKETING OF INSURANCE PRODUCTS COMPANY PROFILE RESEARCH METHODOLOGY ANALYSIS CONCLUSION SUGGESTIONS LIMITATIONS APPENDICS

1 2 4 18 23 34 36 45 46 47 48

HISTORY OF INDIAN INSURANCE INDUSTRY

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The insurance sector in India has come 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 two centuries.

Insurance industries in India have a long history. Life Insurance in existing form came in India from UK in 1818 with Oriental Life Insurance Company. The Indian Life Assurance companies Act, 1912 was the first measure to regulate Life Insurance business. Later in 1928 the Indian Insurance Companies act was enacted, which was amended in 1938. Finally Government of India in 1950 again amended this act. Life Insurance Corporation of India was formed in September 1956 by passing LIC Act, 1956 in Indian parliament.

The first general insurance company- Sun Insurance Office Ltd. was established in Calcutta in the year 1710. General Insurance business in India was nationalized with effect from 1.1.73 by the General Insurance Business Act. from 1973, The General Insurance Company (GIC) as a holding company divided in four subsidiaries as:

National Insurance Company Ltd., The New India Assurance Company Ltd. The Oriental Insurance Company Ltd. The United India Insurance Company Ltd.

DEVELOPMENTS IN THE INDIAN INSURANCE SECTOR

Liberalisation and reforms have the potential to change the complexion of an industry. The Indian insurance sector is no exception. Until recently, India continued to be one of the few remaining countries of the world to remain insulated from the foreign direct investment in its insurance sector. In a bid to make this sector more competitive the government constituted an eight-member committee chaired by Mr. R N Malhotra in 1993. The committee took a year to submit its report. The main thrust of its recommendations was:

Open up the insurance sector Improve the service standards of Indian insurance majors Extend insurance coverage to a larger section of the Indian population.

The benefits of liberalisation of Indian insurance sector were deemed to be that reforms would lead to:

A competitive environment World-class sophisticated technology Better & wider range of products with more reasonable & affordable pricing Price war, leading to competitive pricing of the products Efficient & effective service Efficiency in the conduct of insurance business Global expertise & practices of insurance

 New entrants with a professional approach & state of art technology to revolutionize the market Services of intermediaries like corporate agents, brokers etc Malhotra Committee, in its report stated that only 22% of the Indian population is insured. The poor reach of insurance in the country and the sheer numbers make India a market with tremendous potential. The following facts show how under-developed the Indian insurance business is due to state monopoly and lack of aggressive marketing of insurance policies: Per capita insurance premium in India is a mere US$ 6, one of the lowest in the world. In South Korea, the corresponding figure is US$1,338, in USA it is $ 2250 and in UK it is $1589. Insurance premium in India accounts for a mere 2 per cent of GDP compared to the world average of 7.8 per cent and G-7 average of 9.2 per cent. Insurance premium as a percentage of savings is barely 5.95 per cent in India compared to 52.5 per cent in the UK. Nationalized insurance companies have not been able to target niche markets that are currently served poorly or not at all. Life insurance products provide a good example. They compete with investment and savings options like mutual funds. It is imperative that they should offer comparable returns and flexibility. For instance, pure protection products like term assurance account for up to 20 per cent of policies sold in developed countries. In India, the figure is less than one percent because policies are inflexible. Besides, no Indian life assurance product is linked to non-traditional investment avenues such as stock market indices. Therefore, returns are lower than those on other savings instruments.

Retail segment or personal lines insurance, especially in general insurance is another area unexplored. Currently personal insurance, including health, householders, shopkeepers, personal accident, travel insurance and professional indemnity covers, constitute only 12 per cent of Indian general insurance premium. This poor figure is largely due to the lack of adequate distribution channels rather than a lack of products. By tapping such under-served niches, new entrants can expand the market substantially. Since service and speed will be valued, a price premium is also possible. Keeping in mind the problems that ensnared LIC & GIC, the Malhotra Committee Report recommended the end of monopoly market in insurance.

This recommendation was implemented with the passage of Insurance Regulatory Development Act (IRDA) through Indian Parliament in late 1999.

Due to this Act the private players were allowed to enter the market from 1999. Several Indian private companies have entered into the insurance market, and some companies have joined with foreign partners. After the passage of this Act, with effect from December 2000, all the four subsidiaries of GIC have been de-linked from the parent company and have been made independent insurance companies. GIC now functions as a National Reinsurer.

IRDA, for the time being, prohibits 100% foreign equity in insurance. It requires the Indian promoter to invest either wholly in an insurance venture or team up with a foreign insurer, with a cap of 26% of equity for a foreign partner.

Since the opening up of Insurance Sector, 12 private players have entered the Life Insurance sector & 9 private players have entered the general insurance sector.

THE REGULATORS

Insurance Regulatory & Development Authority

Under the Insurance Regulatory Development Act, Insurance Regulatory & Development Authority (IRDA) was formed which acts as the regulatory authority in the insurance sector. The main aim of the Act is to activate an insurance regulatory apparatus essential for proper monitoring and control of the Insurance industry. TAC is a Statutory Body under Insurance Act 1938. Tariff Advisory Committee controls and regulates the rates, advantages, terms and conditions that may be offered by insurers in respect of General Insurance Business relating to Fire, Marine (Hull), Motor, Engineering and Workmen Compensation.

Liberalization Scenario in India Recent economic liberalization started few years ago have started bringing in new investments from global giants and the government was hard pressed to facilitate global integration by lowering trade barriers for the free flow of technology, intellectual and financial capital. Additionally, reforms are essential if the Indian economy is to achieve and sustain a growth rate of 7 to 8 per cent per annum. Reaching a faster growth path also implies attracting foreign direct investment inflows of $ 10 Billion every year, up from the current level of $ 3 to $ 3.5 Billion. Thus liberalization of insurance creates an environment for the generation of long-term contractual funds for infrastructural investments.

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Nationalized Sectors Performance In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum and for General insurance business it has been 17 per cent per annum. However, there is other side of the coin too. Their large scale of operations, public sector bureaucracies and cumbersome procedures hampers nationalized insurers. The field staff and the agents of the GIC and its four wholly owned subsidiary companies have seldom bothered to venture out into the rural hinterland to sell crop or any other personal line insurance. The domestic insurance companies, despite meeting their social objectives of going into the deepest interiors of the country, have lagged behind in meeting customer expectations in products and services.

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Private Players in Insurance Sector

Potential private entrants expect to score in the areas of customer service, speed and flexibility. It is expected that their entry will mean better products and choice for the consumer. Critics counter that the benefit will be slim, because new players will concentrate on affluent, urban customers as foreign banks did until recently. This might seem a logical strategy from the point of view of new players. Start-up costssuch as those of setting up a conventional distribution network-are large and high-end niches offer better returns. However, in the long run 'middle-market' offers the greatest potential as in terms of it is the second largest market in the world. This may still be an urban market but goes beyond the affluent segment. Insurance, even more than banking, is a volume game. A very exclusive approach is unlikely to provide meaningful numbers. Therefore, private insurers would be best served by a middle-market approach, targeting customer segments that are currently untapped.

Repositioning of Public Sector Companies

Floodgates of competition opened up by the privatization of insurance industry did throw a challenge to the well-protected nationalized sector and it seems they have picked up the gauntlet. LIC and GIC, both are trying to reposition themselves by having re-engineering done on the structure and operations of their respective organizations. Life Insurance Corporation is at present going through presentations from top management consultants. These consultants have been asked to narrate their experiences in countries where the insurance sector has been opened up for private competition so that the public sector player can draw lessons. Based on these, LIC will appoint a consultant which can

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provide them broad terms of reference on what changes are required to tackle the impending competition. GIC has already identified the areas that need to be activated and given a shape through the four subsidiary companies. Foremost is the area of providing health insurance services. A change in the GIC Act will enable the corporation to float a joint venture company for health insurance. Other areas that the GIC is looking at are savings-linked insurance products and use of alternate distribution channels including bancassurance. Also in progress is the co-ordination of all foreign operations of the group. The PSU companies have offered VRS to their employees in an effort to reduce the manpower cost & to make their operations more effective.

Changes in Distribution Channel

Substantial shift in the distribution of insurance in India is likely to take place. Many of these changes will echo international trends. Worldwide, insurance products move along a continuum from pure service products to pure commodity products. Initially, insurance is seen as a complex product with a high advice and service component. Buyers prefer a faceto-face interaction and place a high premium on brand names and reliability. As products become simpler and awareness increases, they become off-the-shelf, commodity products. Sellers move to remote channels such as the telephone or direct mail. Various intermediaries, not necessarily insurance companies, sell insurance. In the UK for example, retailer Marks & Spencer now sells insurance products. In some countries like

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Netherlands and Japan, insurance is marketed using post office's distribution channels. At this point, buyers look for low price. Brand loyalty could shift from the insurer to the seller. In other markets, notably Europe, this has resulted in bancassurance: banks entering the insurance business. The Netherlands led with financial services firms providing an entire range of products including bank accounts, motor, home and life insurance, and pensions. Other European markets have followed suit. In France over half of all life insurance sales are made through banks. In the UK, almost 95% of banks and building societies are distributing insurance products today. In India too, banks hope to maximize expensive existing networks by selling a range of products. Various seminars and conferences on bancassurance are taking place and many bankers have clearly shown their inclination to enter insurance market by leveraging their strengths in the areas of brand image, distribution network, face to face contact with the clients and telemarketing coupled with advanced information technology systems.

Problems
Consumer awareness level is still off the mark. According to the recently conducted FICCI survey on the Present State of Indian insurance industry, a copy of which is available with all of you, the awareness levels regarding Insurance are still in the realm of medium to low. This clearly indicates the onerous task that companies have in creating awareness about "need to Insure" and also tremendous potential they have in expanding the markets by getting more customers in their fold by increasing awareness levels. Insurers in India should also explore distribution through non-financial organizations. For example, insurance for consumer items such as refrigerators can be offered at the point of 14

sale. This piggybacks on an existing distribution channel and increases the likelihood of insurance sales. Alliances with manufacturers or retailers of consumer goods will be possible. With increasing competition, they are wooing customers with various incentives, of which insurance can be one. Another potential channel that reduces the need for an owned distribution network is worksite marketing. Insurers will be able to market pensions, health insurance and even other general covers through employers to their employees. These products may be purchased by the employer or simply marketed at the workplace with the employers cooperation. Finally, some potential Indian entrants into insurance hope to ride their existing distribution networks and customer bases. For example, financial organizations like ICICI, HDFC or Kotak Mahindra intend to tap the thousands of customers who already buy their deposits, consumer loans or housing finance. Other hopeful entrants anticipate specific alliances such as with hospitals to provide health cover.

International Experience
Cross-country experience shows that nowhere in the world has the entry of foreign firms threatened the position of domestic companies. Whether it is Malaysia, where the insurance sector has been open for more than 50 years and foreign companies account for about 10 per cent of market penetration or it is Indonesia, Thailand, China or the Philippines, where the market has been opened more recently, the total market share of foreign companies is less than 10 per cent except in Indonesia where it is about 20 per cent. Closer home, we

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have the experience of the banking sector where despite the presence of 42 foreign banks, their share in total banking assets is less than 10 per cent. Today hardly 20 per cent of the population in India is insured and insurance premium (life as well as non-life) account for just 2 per cent of GDP as against the G-7 average of 9.2 per cent. Consequently, the fear that new companies will displace public companies is misplaced. There is room for more for not only the existing companies but also for any number of competitors.

Future Possibilities for the Next 5-10 Years

Job opportunities are likely to increase manifold in the insurance sector. The number of people working in the insurance sector in India is roughly the same as in the UK with a population that is 1/7 India's; the US with a population 1/4 the size of India has nearly 4 times the number. In the emerging markets, the picture is no less encouraging. In S Korea, the number of full time employees has more than doubled over a ten year period. Thailand added 50 per cent more jobs in four years. The liberalization of the insurance sector promises several new jobs opportunities for those employed in the finance sector who are equipped with degrees in finance. Finance professionals who had witnessed a slump in the job market would be much in demand with the opening up of insurance sector. The type of jobs that will be created once the private players are established in the country won't be far different from the traditional streams in any other industry. There will be demand for marketing specialists, finance experts, human resource professionals, engineers

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from diverse streams like the petrochemical and power sectors, systems professionals, statisticians and even medical professionals. Apart from this, there will be high demand for professionals in the streams like Underwriting and claims management and actuarial sciences. The structure of an insurance company, generally, comprises the Operating Department, Administrative Department and the Finance Department. The Operating Department generally performs the basic functions pertaining to the designing of products, marketing thereof, servicing the insured, management of portfolio, etc. The Administrative Department looks after the day to day affairs of the company. The Finance Department backs the operations and administration of the company by accounting for the transactions, streamlining the flow of funds, materializing the management decisions, etc. The Administration Department as well as the Finance Department, usually, functions through in-house setup. The Finance Department functions in the areas of accounting, financial and management reporting, budgeting and controlling, etc. and thus renders enormous scope for professionals.

Conclusion
Over the past three years, around 40 companies have expressed interest in entering the sector and many foreign and Indian companies have arranged anticipatory alliances. The threat of new players taking over the market has been overplayed. As is witnessed in other countries where liberalization took place in recent years we can safely conclude that

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nationalized players will continue to hold strong market share positions, but there will be enough business for new entrants to be profitable. Opening up the sector will certainly mean new products, better packaging and improved customer service. Both new and existing players will have to explore new distribution and marketing channels. Potential buyers for most of this insurance lie in the middle class. New insurers must segment the market carefully to arrive at appropriate products and pricing. Recognizing the potential, in the past three years, the nationalized insurers have already begun to target niches like pensions, women or children.

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Marketing of Insurance products

Marketing as we know deals with all those processes required to put the products in the hands of the ultimate consumer. Philip Kotler, considered by many as the Marketing Guru of our times gives a pithy definition on marketing thus:' Marketing is the delivery of customer satisfaction at a profit.' Thus one of the essential parameters that judge the effectiveness of marketing exercise is the effect it has on the organization's bottom line.

The steps involved in marketing processes are brought out by the study of four critical parameters, which are the famous 4P's. i.e. Price, Place, Product and Promotion.

A Company or an organization coming with a product offer, has to design an appropriate mix of these four parameter consistent within its standing in the market. Typically the importance of each of these parameter vary in importance depending on the nature of the product, nature of the market and the size of the company. For instance while product issue forms the important deciding factor in the purchase of commodities and manufactured goods promotion is of key importance in Fast Moving Consumer Goods marketing. The four parameters also take on different intensities depending on which stage of the product life cycle the product is in.

Accordingly the marketing process could take a product centric view, a customer centric view or as is happening these days it could be taken on as a organizational philosophy resulting in market driven companies. 19

In order to link the marketing process to Insurance products, first it has to be seen in the broader context of financial services marketing and also the regulatory environment that is in place. Financial services whether its Banking, or Investments, Life Insurance, General Insurance, though target separate need base, have the services component connecting them. Services being intangible the four aspects of the marketing mix discussed above, which are developed for product centric markets, do not find the same level of application and thus needs a fresh perspective to be developed in relation to services marketing. Theories have evolved over time in this direction first by identifying the aspects of services marketing and then providing solutions for this line of marketing, which existing insurance policies may provide cover? Financial Services Marketing: Services have some unique features separating itself from traditional product marketing: They are intangible, there is nothing physical so consumers do not have any way to actually take a test drive or in any way get a feel about the product before its purchase.

The services are inseparable from the product itself. Here the product is produced and consumed in the same instance and requires the presence of the end customer.

It is heterogeneous and quality control is difficult where the quality of the service is dependent on the quality of the service provider. The product differentiation is minimum with in a category of product say in Banking or Investment etc; Added to this the customer more often relies on hope of appreciation of his

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investments or safe return of his deposits with the promised yield. The kind of trusteeship found in all financial services makes the companies all the more responsible in handling the hopes of their consumers. Also the regulatory environment plays a crucial role in marketing of financial products. There are restrictions on the content of ad-messages so as to ensure that customers are not taken for a ride by unscrupulous elements, which unfortunately are not hard to find in this sector.

How does insurance sector fit in this arena.

The very nature of the contract puts the insured at a vantage position as to the information regarding risk element one is exposed to. Owing to this insurance contracts are sourced through an intermediary, an agent in this case who is expected to have better knowledge of the person or the risk in question. Insurance companies rely on the report of its agents in its decision to acceptance or otherwise and in premium setting for the risk in question. A reason why many lines of insurance are not available off the shelf.

Even as this is the case, Insurance contracts especially those in life insurance are typically sold rather than bought. The reason being that there in no adequate appreciation of the concept of insurance, which seeks to indemnify/ compensate the insured for financial loss suffered on account of an accidental event. Typically life insurance policies are compared with bank fixed deposits or mutual funds, and are shown in poor light for their poor returns. One fails to appreciate that the need base differs when one is taking up a life insurance

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policy. Most of the plans while offering decent returns offer life covers that is a unique feature compared to other financial products.

Insurance companies have been countering their poor image by coming out with innovate features like unit-linked schemes, which offer more of a saving component and less of a risk component. Also there are various tax incentives provided by the government for investments into life insurance plans, to encourage the habit of buying insurance.

Also there is strict regulatory compliances to be compiled with while selling insurance products. For instance there is that provision of Section 41 of the Insurance Act, 1938, which prohibits offer of rebates in any kind from the premium monies by the intermediaries in their efforts to source business for insurance companies. The advertising code as prescribed by the regulator, the IRDA, requires to be clearly worded in their ad-message.

What the future has in store for the segment:

Typically the entire business in life insurance and a huge proportion of business in non-life insurance is sourced through agents of insurance companies. New intermediary options are being broached including an option of disintermediation in certain lines of business. The new distribution alternatives include the brokers, who act on behalf of the customers and advice of best-suited policies and banks. The general integration of different classes of financial services has created a large opportunity for banks to enter in to the insurance sector. The branch network and the high

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relationships maintained with its clientele is being put to good use while marketing insurance products. A new alternative like selling insurance over the net is also catching up. Insurance companies are opting for disintermediation in certain lines of business aimed at corporates, where highly specialized knowledge on risk analysis is called for.

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COMPANY PROFILE
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. 11.85 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups. For the past four years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. Our vision: To make ICICI Prudential the dominant Life and Pensions player built on trust by worldclass people and service. This we hope to achieve by:

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Understanding the needs of customers and offering them superior products and service

Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders

Providing an enabling environment to foster growth and learning for our employees And above all, building transparency in all our dealings.

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.

We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.

Board of Directors The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K.V. Kamath, Chairman Mr. Mark Norbom Mrs. Lalita D. Gupte

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Mrs. Kalpana Morparia Mrs. Chanda Kochhar Mr. HT Phong Mr. M.P. Modi Mr. R Narayanan Ms. Shikha Sharma, Managing Director Mr. N.S. Kannan, Executive Director Management Team Ms. Shikha Sharma, Managing Director & CEO Mr. N.S. Kannan, Executive Director Mr. V. Rajagopalan, Chief - Actuary Mr. Sandeep Batra, Chief Financial Officer & Company Secretary Ms. Anita Pai, Chief - Customer Service and Operations Mr. Puneet Nanda, Chief Investments ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudentials equity base stands at Rs. 1185 crore with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April- December, 2005, the company garnered Rs 1,430 crore of new business premium for a total sum assured of Rs

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15,170 crore and wrote 497,765 policies. 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. To know more about the company, please visit www.iciciprulife.com. ICICI Prudential is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA ( Ind ) from Fitch ratings. The AAA rating is the highest credit rating, and is a clear assurance of ICICI Prudentials ability to meet its obligations to customers at the time of maturity or claims.

DISTRIBUTION ICICI Prudential has one of the largest distribution networks amongst private life insurers in India, having commenced operations in over 116 cities and towns in India, stretching from Bhuj in the west to Guwahati in the east, and Amritsar in the north to Trivandrum in the south. The company has 8 bancassurance tie-ups, having agreements with ICICI Bank, Bank of India, Federal Bank, South Indian Bank, Ernakulam Bank, Lord Krishna Bank and some co-operative banks, as well as about 290 corporate agents and brokers. It has also tied up with NGOs, MFIs and corporates for the distribution of rural policies and organisations like Dhan for distribution of Salaam Zindagi, a policy for the socially and economically underprivileged sections of society.

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ICICI Prudential has recruited and trained more than 65,000 insurance advisors to interface with and advise customers. Further, it leverages its state-of-the-art IT infrastructure to provide superior quality of service to customers.

PRODUCTS Insurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 5 riders, to create a customized solution for each policyholder. Savings Solutions

SecurePlus is a transparent and feature-packed savings plan that offers 3 levels of protection.

CashPlus is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options.

SavenProtect is a traditional endowment savings plan that offers life protection along with adequate returns.

CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a childs marriage, expenses for a childs higher education or purchase of an asset.

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LifeTime & LifeTimeII offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options ? Preserver, Protector, Balancer and Maximiser.

LifeLink II is a single premium Market Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market.

Premier Life is a limited premium paying plan that offers customers life insurance cover till the age of 75.

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

InvestShield Cash is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with flexible liquidity options.

InvestShield Gold is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with limited premium payment terms.

Protection Solutions

LifeGuard is a protection plan, which offers life cover at very low cost. It is available in 3 options ? level term assurance, level term assurance with return of premium and single premium.

HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.

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Child Plans

SmartKid education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the childs life. SmartKid plans are also available in unit-linked form ? both single premium and regular premium.

Retirement Solutions

ForeverLife is a retirement product targeted at individuals in their thirties. SecurePlus Pension is a flexible pension plan that allows one to select between 3 levels of cover.

Market-linked retirement products

LifeTime Pension IIis a regular premium market-linked pension plan LifeLink Pension II is a single premium market-linked pension plan. InvestShield Pension is a regular premium pension plan with a capital guarantee on the investible premium and declared bonuses.

Golden Years: is a limited premium paying retirement solution that offers tax benefits up to Rs 100,000 u/s 80C, with flexibility in both the accumulation and payout stages.

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ICICI Prudential also launched Salaam Zindagi, a social sector group insurance policy targeted at the economically underprivileged sections of the society.

Health Solution

Health Assure: Is a regular premium plan which provides l ong term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses.

Health Assure Plus: Is a regular premium plan which provides long term cover against 6 critical illnesses by providing financial assistance, irrespective of actual medical expenses, as well as an equivalent life insurance cover

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

ICICI Pru Group Gratuity Plan: ICICI Prus group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations.

ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member

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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 Pru Group Term Plan: ICICI Prus flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death.

Flexible Rider Options ICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.

Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit.

Accident Benefit: This rider option pays the sum assured under the rider on death due to accident.

Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death.

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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 SmarKid, SecurePlus and CashPlus

Waiver of Premium: In case of total and permanent disability due to an accident, the premiums are waived till maturity. This rider is available with SecurePlus and CashPlus.

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ABOUT THE PROMOTERS ICICI Bank (NYSE:IBN) is India''s second largest bank and largest private sector bank with assets of Rs. 1892.18 billion as on September 30, 2005. ICICI Bank provides a broad spectrum of financial services to individuals and companies. This includes mortgages, car and personal loans, credit and debit cards, corporate and agricultural finance. The Bank services a growing customer base of more than 14 million customers through a multichannel access network which includes over 590 branches and extension counters, 2,030 ATMs, call centres and Internet banking (www.icicibank.com). Established in London in 1848, Prudential plc, through its businesses in the UK and Europe, the US and Asia, provides retail financial services products and services to more than 16 million customers, policyholder and unit holders worldwide. As of June 30, 2004, the company had over US$300 billion in funds under management. Prudential has brought to market an integrated range of financial services products that now includes life assurance, pensions, mutual funds, banking, investment management and general insurance. In Asia , Prudential is the leading European life insurance company with a vast network of 24 life and mutual fund operations in twelve countries - China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and
Vietnam.

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Research Methodology

1. Familiarization with the insurance concepts and insurance industry in India.

2. Collection of database from Working Individuals through a questionnaire.

3. Analysis and interpretation of data.

6. Reaching at conclusions and suggestions based on analysis.

Sources of Data Collection

1.Primary Sources

Questionnaire

2.Secondary sources

Internet Brochures, Pamphlets

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Sample Size

200 people in NCR

Demographic Profile of Sample

25ysr & above Randomly Selected People

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ANALYSIS OF SURVEY

Companies Visited:

S. No. Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Amway India Beehive Systems Cidex Trade Fair CSC Delhi Toyota Escotel EXL HCL BPO Hollostic India Ltd. Idea Cellular Intersolutions Microland Systems NeoMagic Semiconductor NIIT Olive E-Solutions Patni Computers Philips India R Systems Samtech Infonet Schneider Electric Singer Solution Inc. Tele Atlas V Customers Xansa BPO

No. of people contacted 2 2 3 9 5 3 5 10 2 5 4 4 3 13 4 1 12 8 2 3 3 7 6 10 17

Address Okhla Phase-II Sector-1, Noida Sarita Vihar Sector-59, Noida Mohan Cooperatives Mohan Cooperatives Sector-58, Noida Sector-58, Noida Sector-58, Noida Mohan Cooperatives Sector-58, Noida Sector-58, Noida Sector-1, Noida Mohan Cooperatives Mohan Cooperatives Sector-59, Noida Mohan Cooperatives Sector-59, Noida Mohan Cooperatives Mohan Cooperatives Mohan Cooperatives Mohan Cooperatives Sector-1, Noida Mohan Cooperatives Sector-1, Noida

40 other Companies including CA, Self employed etc.

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Places Visited: Okhla ( Phase I,II ) Mohan Cooperatives Noida ( Sector- 1,2,58,59 ) Faridabad (Ansal Plaza ) Sarita Vihar

Monthly Family Income Level(Rs.):

< 10000 14

10000-20000 41

20000-40000 76

>40000 64

5 people didnt disclosed their family income.

80 60 40 Series1 20 0 < 10000- 20000- >40000 10000 20000 40000

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Annual Investment Level(Rs.):

<10000 35

10000-25000 59

25000-50000 42

>50000 60

5 people didnt disclosed their Investment level.

60 50 40 30 20 10 0 <10000 10000- 25000- >50000 25000 50000 Series1

Factors of Investment:

S. No. 1 2 3 4

Ist Priority Tax Benefits Liquidity Safety Returns

No. of People Favoring 68 15 52 59

6 people Didnt Disclosed

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No. of People Favoring 80 60 40 20 0 Tax Liquidity Benefits 1 2 Safety 3 Returns 4

No. of People Favoring

Influencer:

S. No. 1 2 3 4

Influencer Self/Spouse Parents Intermediateries Friends

No. of People 118 49 17 15

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1 Didnt Disclosed

S. No. Influencer 1 Self/Spouse 2 Parents 3 Intermediateries 4 Friends

Analysis of Income Level with Investment Level:

Investment

<10000

1000025000

2500050000

> 50000

Income
< 10000 10000-20000 20000-40000 > 40000 8 11 11 4 5 21 20 13 1 4 24 12 5 20 30

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11 people Didnt Disclose

35 30 25 20 15 10 5 0 8 5 1 <10000 1000025000 25000- > 50000 50000

10000-20000 20000-40000 > 40000

Analysis of Time Horizon for Investment with Investment tools:

Priority

Equity

PPF/NSC FD

Bonds

Mutual Funds

Life Insurance 19 62 37 26

Years
< 1 yrs 1-3 yrs 3-10 yrs >10 yrs 4 17 6 3 13 46 33 16 15 28 18 7 3 17 17 3 3 8 6 4

160 140 120 100 80 60 40 20 0

SC FD ds ity ds Eq u Bo n un /N lF ra nc e

>10 yrs 3-10 yrs 1-3 yrs < 1 yrs Years

PP F

ua ut M

Li fe

In

su

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Preference For Life Insurance as an Investment:

S. No. 1 2 3 4

Investment Option Tax Savings Family Security Unforeseen Expense Saving for old age

No. of People 76 93 11 17

3 people Didnt disclosed

No. of People 1 Tax Savings 2 Family Security 3 Unforeseen Expense 4 Saving for old age

Return on investment:

S. No. 1 2 3 4

No. of Years <3 3-5 5-10 > 10

No. of people 53 67 33 39

8 people didnt disclose

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No. of people

1<3 2 5-Mar 3 10-May 4 > 10

CONCLUSION

From the findings of the study it can be said that the scope of Life Insurance market in India is full of opportunities & a huge potential lies in rural areas.

The potential customers want value added products to meet their needs & requirements on individual basis.

From the study it can be inferred that people have started looking towards Life Insurance as a future long-term source of investment with life cover.

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Insurance is a source of tax saving among corporates.

People give priority to family security while investing in any Life Insurance policy.

Private players in the industry need to focus towards marketing strategies to capture more of industry share with the growing competition.

SUGGESTIONS

The private companies have to improve their awareness among the people so as to build a brand image for them in comparison with LIC.

The companies have huge potential unexplored market, which is ready to buy the product, but only if priced & targeted well.

The companies can have agents to sell their products & else sell through mailer but in future it should also go in for selling through Internet. 46

The companies need to market their products in such a way so that it reaches each & every potential customer.

The company should create value added services & brand image so that they can ride on them to sell their products & to overcome its competitors.

Insurance as a future source of long term gains need to be informed while selling a Insurance product.

LIMITATIONS OF THE STUDY

Selected only 200 respondents due to time constraint, which might have led to several sample errors.

Study is restricted to NCR, which might not give the national picture.

The duration of time for the study was limited & hence a comprehensive & elaborate study could not be undertaken.

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Rural areas could not to touched during the study, which have huge potential for life Insurance exists.

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QUESTIONNAIRE

NAME: -----------------------------------

COMPANY:-----------------------

AGE:------------------

MOBILE:------------------TEL:-----------------

MONTHLY FAMILY INCOME (Tick the appropriate one)

<10000 10000-20000 20000-40000 >40000

1. Rank the following factors in order of your preference, which you consider while making any investment:

Liquidity Tax Benefits Safety Returns One time fixed returns Regular returns Capital gains 49

2. Who influences your investment decisions? (Tick the appropriate one)

Self/Spouse Parents Friends Intermediaries (Agents, Brokers etc)

3.what is the time horizon for which you generally invest? (Tick the appropriate one)

<1 year 1-3 years 3-10 years >10 years

4. How much money do you invest annually? (Tick the appropriate one)

<Rs.10000 Rs.10000-25000 Rs. 25000-50000 >Rs. 50000

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5. What are the instruments you invest in ? (Tick your choices)

Equity Shares PPF, NSC or G-sec Fixed Deposits Life Insurance Any other, Specify _________________

6. What is your order of preference for LIFE INSURANCE as an Investment option?

Tax Savings Family Security Unforeseen Expenses Savings for old age 7. Have you ever consulted any financial intermediary to make investment in Life Insurance options?

Yes No

If No, then how do you make investment __________________________________________________________________

8. You would prefer to get returns within? (Tick the appropriate one)

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<3 years 3-5 years 5-10 years >10 years

9.Give ratings in order of your preference for these advantages of investing in Life Insurance options?

Long Term Savings Forced Savings Tax Savings & Tax Free Returns Peace of mind for Family Provision after retirement

10. How you save your Tax? (Tick the appropriate one)

Invest in Life Insurance Invest in PPF Invest in Infrastructure bonds Invest in pension plans

11. Incase you wouldnt have reached home last night, how would have this affected your family financially? (Tick the appropriate one)

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100% 75% 50%

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