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    11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111ARESEARCH REPORTONINVESTMENT PATTERN OF ICICI PRUDENTIAL LIFE INSURANCECOMPANYATICICI PRUDENTIAL LIFE INSURANCE

    SUBMITTED TOShree Leuva Patel Trust M.B.A. Mahila CollegeAMRELI


    Dr.Vijay Pithadia


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    I, Megha K. Bakhai, studying in MBA (IV Sem.) of Shree Leuva Patel

    Trust MBA Mahila College, Amreli hereby declare that I have completed this projecton INVESTMENT PATTERNS OF ICICI PRUDENTIAL LIFE INSURANCE inthe academic year 2004-06 as per the requirements of the SAURASHTRA

    UNIVERSITY as a part of MASTER IN BUSINESS ADMINISTRATION (MBA)programme. The information presented through this project is true and original to thebest of my knowledge.

    Here I assure you that Project work has not been presented to anyuniversity or institute towards the degree/diploma fellowship or any other similar title.

    Date: - Sign. :-


    This project is the culmination of a study into the wide gamut of

    activities carried on in the domain of Insurance especially INVESTMENTPATTERN OF ICICI PRUDNTIAL LIFE INSURANCE in India. This projectwould just not have been complete without the valuable contributions from various

    people whom I have interacted with in the course of its completion. I would like toexpress my sincere gratitude to all those people who have in their own sweet wayshelped me to complete this project.

    I begin by thanking my Project Guide and my Guru, Mr. MadhavUpadhyaya and Mr. Jignesh Bhatt, the treasure trove of information who has ralliedstrongly behind me to see me complete this project. Without him this project wouldhave remained just an idea.

    My parents who have always stood by me as solid as a rock; it is their

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    faith in me that has seen me complete this project on time. My Family who helped mein whatever small ways possible .The list goes on

    I wish thanks to all those people who have lent me a helping hand infinishing this project, whose names are too numerous to be mentioned here. My

    College Professors

    Dr. Vijay PithadiaMr. Vishal PatidarMr. Bhargav Pandya

    who have always been my guiding lights .

    Yours sincerely,

    (Megha Bakhai)



    TO,The RegistrarSaurastra UniversityRajkot.

    Subject : MBA Final Training Project Report

    Respected Sir,

    I am recommending the Final Training Project Reportentitled_______________________________________________________________

    _____Prepared by __________________________________At_____________________________________________________As the partial

    fulfillment of the University requirement for the award of MBA degree of Saurastra

    University, Rajkot.

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    Date :- Thanking You,

    Place :- Amreli Yours faithfully,




    TO,The RegistrarSaurastra UniversityRajkot.

    Subject : MBA Final Training Project Report

    Respected Sir,

    I am recommending the Final Training Project Reportentitled_______________________________________________________________

    _____Prepared by __________________________________At

    _____________________________________________________As the partialfulfillment of the University requirement for the award of MBA degree of SaurastraUniversity, Rajkot.

    Date :- Thanking You,

    Place :- Amreli Yours faithfully,


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    This is to certify that ________________________________ Thestudent of MBA has carried out the project work as per the syllabus of SaurastraUniversity. She prepared this Final Training Project Report on

    _____________________________________________________Under myGuidance and her contribution in making this report during the academic year

    ____________ is highly appreciated.

    To the best of my knowledge the details presented by her areoriginal in nature and have not been copied from any other source. Also this Reporthas not been submitted earlier for the award of any degree or diploma in SaurastraUniversity or any other University.

    Guides Name & Sign.

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    companies like LIC, GIC etc. with the opening up of the economy, a score of MNCshave come in the market with Indian business houses resulting in client friendly,healthy competition and rivalry in the insurance sector. Good old days have gone,where only LIC agents were seen knocking doors of potential clients.

    The policies floated by the government insurance companies whereprimarily meant to cover risk but in todays market, the policies are havingpredominantly a major part of investment option with high rate of return.

    One of the major challenge for all private companies is to develop astrong sales team, since LIC who enjoyed a monopoly in this sector before it wasopened for private players has a network of 2,50,000 agents.

    India at a glance

    Population : 1.3 Billion

    Economy : 5th largest in the world in terms of purchasing power parity (PPP)

    Premium as a percentage of GDP :1.77 %

    GDP growth rate : Over 7.5% per year on an average for the last decade

    Saving rate : Around 30% of GDP

    Estimated middle class population : 300 Million

    Insured population : 70 million only

    Estimated business (2008) : $6.6 Billion

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    Life Insurance Sector acts as a backbone of any economy. Thissector polls large funds from masses and then invests in the infrastructure projects aswell as other long term projects, which will generate a regular income flow in thecoming years. Traditionally life insurance was taken just as a security product butnow it is gaining importance as an investment product. Hence, now if you want to selllife insurance product to anyone, you have to analyze his/her life stage, risk

    preference, priorities and then suggest the appropriate product to that investor.

    The insurance sector needs a great deal of financial planning,knowledge, as well as knowledge about other financial products and their currentmarkets so that we can compare those products with the insurance product andconvince the client. Insurance companies also have to manage their investment in

    such a way that the principal amount should not erode, and the investor should getassured returns which the company has promised. This involves a great deal ofknowledge about portfolio management and hedging of risk. Thus this would give usgreat exposure to financial markets as well as the intricacies of different financialinstitutions, how they work and what difficulties they face.

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    What Is Insurance ?

    Being a social animal and risk averse, man always tries to reduce

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    risk. An age-old method of sharing of risk through economic cooperation led to thedevelopment of the concept of insurance.

    Insurance is not necessarily an investment from which one expects toget one's money back. Nor is it gambling. A gambler takes risks, while insurance

    offers protection against risks that already exist. Insurance is a way to share risk withothers. Since ancient times, communities have pooled some of their resources to helpindividuals who suffer loss.

    Insurance is a contract between two parties whereby one party calledinsurer undertakes in exchange for a fixed sum called premiums, to pay the other

    party called insured a fixed amount of money on the happening of a certain event.

    Insurance is a protection against financial loss arising on thehappening of an unexpected event. Insurance companies collect premiums to providefor this protection. A loss is paid out of the premiums collected from the insuring

    public and the Insurance Companies act as trustees to the amount collected.

    For example, in a Life Policy, by paying a premium to the Insurer, thefamily of the insured person receives a fixed compensation on the death of theinsured.

    Similarly, in a car insurance, in the event of the car meeting with anaccident, the insured receives the compensation to the extent of damage. It is a system

    by which the losses suffered by a few are spread over many, exposed to similar risks.Insurance is desired to safeguard oneself and one's family against possible losses onaccount of risks and perils. It provides financial compensation for the losses suffereddue to the happening of any unforeseen events.

    By taking life insurance a person can have peace of mind and neednot worry about the financial consequences in case of any untimely death.Certain Insurance contracts are also made compulsory by legislation. For example,Motor Vehicles Act 1988, stipulates that a person driving a vehicle in a public placeshould hold a valid insurance policy covering Act risks. Another example ofcompulsory insurance pertains to the Environmental Protection Act, wherein a personusing or carrying hazardous substances (as defined in the Act) must hold a validPublic Liability (Act) Policy.

    Principles of Insurance

    Insurance is a 'risk transfer mechanism' - it transfers the financialrisks of everyday life from you to an insurance company. But only in terms of thefinancial consequences of risk. Without insurance, if you car was damaged, it wouldcost you a lot of money to fix it or to buy another one. It could cost you even more to

    pay for compensation to someone else involved in an accident. Insurance protectsyour financial interests. It cannot lighten the emotional, humanitarian and sentimentalconsequences of an accident. But properly used, it will protect your financialinvestment in your car and your legal obligations should you have an accident.

    Insurable Interest

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    Before you can insure anything, you must have a legally recognizedfinancial interest in what you are insuring. For motor insurance, you can't take out aninsurance policy on the car driven by the latest film star in the hope that it will crashand you can claim. That is nothing more than gambling. But you can insure the caryou own, or drive. You would suffer financially if it is damaged or stolen and benefit

    from its continued existence.

    IndemnityThis word is used to describe the type of payment you would receive.

    A motor policy and a household policy are both a contract of indemnity. It means,subject to the terms of the contract, you are entitled to be put back in the samefinancial position after a loss as you were in before the loss. A refusal to indemnify isa refusal to pay the claim.Contribution

    If there is more than one policy in force that you could claim on, you

    can't get payment from them both that would exceed the value of your loss. So eachpolicy would contribute a portion of the loss. You would receive the full value of theloss but no more and the two policies would only bear part of it each.

    SubrogationThis is the right that your insurer has to recover from someone else

    where you are entitled to do so. For example, if another driver causes damage to yourcar, and your insurers pay for it, subrogation gives them the legal right to 'stand inyour shoes' and reclaim their outlay from the responsible driver.

    Proximate CauseWhen you seek to claim from your insurers for a property or

    financial loss you must show that the loss was caused as a result of a peril covered bythe policy. There must be a direct relationship of cause and effect; the cause must be

    proximate in efficiency but not necessarily in point of time. There might for example,be a chain of causes in which each cause is the natural result of the preceding cause. Itis the immediate and not the remote cause which must be considered. The full andclassic definition of this principle is given in case law called 'Pawsey V ScottishUnion and National Insurance Co (1908)'

    History of Insurance

    Insurance has been around since ancient times. The Babylonians and

    Phoenicians had ocean marine insurance to protect a merchant against losses incurredwhen a ship did not reach its intended destination with its load of goods or did notreturn with payment. This form of insurance, called Respondentia, evolved becausethe goods on board often were used as collateral for a loan. The lender charged the

    borrower interest on the loan and levied an additional sum, the premium, to cover thecost of the respondentia contract. If the ship reached its destination and returned, themerchant received payment for the goods and in turn paid the moneylender. If theship failed to return, the debt was cancelled. This system was profitable to lenders

    because many respondentia contracts were sold, and debts were paid more often thancancelled.

    In ancient Rome, associations had a form of insurance for theirmembers. Each member made regular payments to the association in return for

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    coverage of funeral expenses or for assistance to family members who were injured orill.

    Insurance also existed in 17th-century England, which was then one ofthe world's principal maritime powers. Those seeking marine insurance would post a

    list of their cargo and voyages in a London coffee house owned by Edward Lloyd.Private investors would examine the list and sign their name by the entries they werewilling to guarantee for a fee. These private investors were the first insuranceunderwriters, and the coffee house became the world center of marine insurance.Today the organization is known as Lloyds of London, and it brings togetherindividuals, most often working in syndicates, who write all types of insurance.

    Insurance in the modern form originated in the Mediterranean during14th century. The earliest references to insurance have been found in Babylonia, theGreeks and the Romans. The use of insurance appeared in the account of North Italianmerchant banks who then dominated the international trade in Europe at that time.

    Marine insurance is the oldest form of insurance followed by life insurance and fireinsurance. The patterns that have been used in England followed in other countriesalso in these kinds of insurance

    The oldest and the earliest records of marine policy relates to a

    Mediterranean voyage in 1347. In the year 1400, a book written by a merchant ofFlorence, indicates premium rates charged for the shipments by sea from London toPisa. Marine Insurance spread from Italy to trading routes in other countries ofEurope.

    Fire insurance has its origin in Germany where it was introduced inmunicipalities for providing compensation to owners of the property, in return for anannual contribution, based on the rent of those premises. The fire insurance in its

    present form started after the most disastrous fire in human history known as the'Great Fire' in London, which had destroyed several buildings. It drew the attention ofthe public and the first fire insurance commercially transacted in 1667. The IndustrialRevolution (1720-1850) gave much impetus to fire insurance. The Nineteenth centurymarked the development of fire insurance.

    Due to the increasing demands of the time, different forms of insurancehave been developed. Industrial Revolution of 19th century had facilitated thedevelopment of accidental insurance, theft and dacoity, fidelity insurance, etc. In 20th

    century, many types of social insurance started operating, viz., unemploymentinsurance, crop insurance, cattle insurance, etc. This way the business of insurancedeveloped simultaneously with human and social development. Today, the use ofcomputers in the field of insurance is frequently increasing. Insurance becomes aninseparable part of human development.

    The early developments of life insurance were closely linked with thatof marine insurance. The first insurers of life were the marine insurance underwriterswho started issuing life insurance policies on the life of master and crew of the ship,and the merchants. The early insurance contracts took the nature of policies for a short

    period only. The underwriters issued annuities and pension for a fixed period or for

    life to provide relief to widows on the death of their husbands. The first life insurancepolicy was issued on 18th June 1583, on the life of William Gibbons for a period of

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    12 months.

    The history of life insurance in India dates back to 1818 when it wasconceived as a means to provide for English Widows. Interestingly in those days ahigher premium was charged for Indian lives than the non-Indian lives as Indian lives

    were considered more riskier for coverage. The Bombay Mutual Life InsuranceSociety started its business in 1870. It was the first company to charge same premiumfor both Indian and non-Indian lives. The Oriental Assurance Company wasestablished in 1880. The first general insurance company- Tital Insurance CompanyLimited, was established in 1850. Till the end of nineteenth century insurance

    business was almost entirely in the hands of overseas companies.

    Insurance regulation formally began in India with the passing of theLife Insurance Companies Act of 1912 and the Provident Fund Act of 1912. Severalfrauds during 20's and 30's sullied insurance business in India. By 1938 there were176 insurance companies. The first comprehensive legislation was introduced with the

    Insurance Act of 1938 that provided strict State Control over insurance business. Theinsurance business grew at a faster pace after independence. Indian companiesstrengthened their hold on this business but despite the growth that was witnessed,insurance remained an urban phenomenon.

    The Government of India in 1956, brought together over 240 privatelife insurers and provident societies under one nationalized monopoly corporationand LIC was born. Nationalization was justified on the grounds that it would createmuch needed funds for rapid industrialization. This was in conformity with theGovernment's chosen path of State- led planning and development.


    The concept of insurance is believed to have emerged almost 4500years ago in the ancient land of Babylonia where traders used to bear risk of thecaravan by giving loans, which were later repaid with interest when the goods arrivedsafely.


    The business of life insurance in India in its existing form started in India

    in the year 1818 with the establishment of the Oriental life insurance Company inCalcutta. Some of the important milestones in the life insurance business in India are:

    1912: The Indian life Assurance Companies Act enacted as the first statute to regulatethe life insurance business.

    1928: The Indian insurance Companies Act enacted to enable the government tocollect statistical information about both life and non- life insurance businesses.

    1938: Earlier legislation consolidated and amended to by the insurance Act with theobjective of protecting the interests of the insuring public.

    1956: 245 Indian and foreign insurers and provident societies taken over by the

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    central government and nationalized. LIC formed by an Act of Parliament, viz. LICAct, 1956, with a capital contribution of Rs. 5 crore from the Government of India.


    The General insurance business in India, on the other hand, can trace itsroots to the Triton insurance Company Ltd., the first general insurance companyestablished in the year 1850 in Calcutta by the British.

    1907: The Indian Mercantile insurance Ltd. set up, the first company to transact allclasses of general insurance business.

    1957: General insurance Council, a wing of the insurance Association of India,frames a code of conduct for ensuring fair conduct and sound business practices.

    1968: The insurance Act amended to regulate investments and set minimum solvencymargins and the Tariff Advisory Committee set up.

    1972: The General insurance Business (Nationalisation) Act, 1972 nationalised thegeneral insurance business in India with effect from 1st January 1973.

    Prerequisites for Entering into Insurance

    Life insurance is one of the important options for the investment alternatives. So,there is the great need for the evaluation before entering into the insurance and itsinvestment purpose. Any private player wants to enter into an insurance sector has tocomply with the following requirement without which it will not be consideredeligible for obtaining license.

    The prerequisites for entering into the insurance sectors may be described asfollows.

    Minimum Capital RequirementsThe private sector is allowed to enter insurance sector. The Minimum paid up capitalfor new entrants is mentioned below.Minimum paid up capital for life and non life insurance companies of Rs. 1 billion.Minimum paid up capital for reinsurance companies is Rs. 2 billion.

    Share HoldingThe promoters holding in private insurance company should not exceed 40% andshould, at no time, be less than 26% of the total paid up capital.

    No person other than the promoters should be allowed to hold more than 1% of theequity.Entry for Foreign Players

    If and when entryof foreign insurance companies is permitted, they have to enter the market by way of

    joint venture with Indian Partners.

    Equity Participation for Joint Venture

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    It is proposed that in the private insurance joint venture, the Indian promoter willcome to hold 74% stake in the venture initially, leaving the foreign partner with 26%.It is also proposed that the Indian promoter will have to mandatory lower its stake inthe private insurance firm from the initial 74% to 26% in the period of ten years.Minimum Rural Business

    New entrance in life insurance should be required to transact a certain minimumbusiness in rural areas. It should be ensured that such insurers do not avoid writingsmall policies.Similarly, the new general insurance should also write a certain minimum rural nontraditional business.Those who fail to comply with these stipulations should be subject to a penalassessment by the insurance regulatory authority.Requirements for financial intuitionsThe RBI has stipulated that a minimum of 15% of Capital Adequacy Ratio for FI toenter in insurance sector.


    With largest number of life insurance policies in force in the world,

    Insurance happens to be a mega opportunity in India. Its a business growing at therate of 15-20 per cent annually and presently is of the order of Rs 450 billion.Together with banking services, it adds about 7 per cent to the countrys GDP. Gross

    premium collection is nearly 2 per cent of GDP and funds available with LIC forinvestments are 8 per cent of GDP.

    Yet, nearly 80% of Indian population are without life insurancecover, health insurance and non-life insurance continue to be below internationalstandards. And this part of the population is also subject to weak social security and

    pension systems with hardly any old age income security. This itself is an indicatorthat growth potential for the insurance sector is immense.

    A well-developed and evolved insurance sector is needed for

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    economic development as it provides long term funds for infrastructure developmentand at the same time strengthens the risk taking ability. It is estimated that over thenext ten years India would require investments of the order of one trillion US dollars.

    With a large capital outlay and long gestation periods, infrastructure

    projects are fraught with a multitude of risks throughout the development,construction and operation stages. These include risks associated with projectimplementation, including geological risks, maintenance, commercial and politicalrisks. Without covering these risks the financial institutions are not willing to commitfunds to the sector, especially because the financing of most private projects is on alimited or non- recourse basis.

    Insurance companies not only provide risk cover to infrastructureprojects, they also contribute long-term funds. In fact, insurance companies are anideal source of long term debt and equity for infrastructure projects. With long termliability, they get a good asset- liability match by investing their funds in such


    IRDA regulations require insurance companies to invest not less than 15percent of their funds in infrastructure and social sectors. International Insurancecompanies also invest their funds in such projects.

    . There are two legislations that govern the sector- The Insurance Act-1938 and the IRDA Act- 1999. The Government of India liberalized the insurancesector in March 2000 with the passage of the Insurance Regulatory and DevelopmentAuthority (IRDA) Bill, lifting all entry restrictions for private players and allowingforeign players to enter the market with some limits on direct foreign ownership.Under the current guidelines, there is a 26 percent equity cap for foreign partners in aninsurance company. There is a proposal to increase this limit to 49 percent. A host of

    private insurance companies operating in both life and non-life segments have startedselling their insurance policies since 2001.


    While Direct foreign investment is permitted in several areas of business inIndia, the insurance industry has been fraught with trouble from the beginning.

    Insurance has been and continues to be a government monopoly. Forinstance, section 30 of the Life Insurance Corporation Act 1956 expressly provides

    that the Life Insurance Corporation of India shall have the exclusive privilege ofcarrying on life insurance business. This monopoly situation also applies to generalinsurance, although the position is different as regards risk management andreinsurance

    The previous government (The Indian National Congress) appointed theMalhotra Committee which presented its Report in 1994, making recommendationsfor opening up the insurance sector. It recommended infer alia that the private sector

    be called upon to take some portion of the rural and non-traditional insurance market.It also recommended that private foreign companies should enter into Joint ventures,the promoter equity being 40 per cent and the balance held by the public.

    When the present coalition government, the United Front, came to power,

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    as the Central Government, it introduced its promised Common MinimumProgramme. One of the attractions of this programme was the desire to introduce wideranging changes affecting the insurance sector, on lines similar to the banking sector

    Based on this manifesto, the following developments took place in 1996 -

    A Bill on the Insurance Regulatory Authority was proposed. It is presently uncertainwhether the Authority will be empowered to invite domestic and foreign investmentin the insurance sector. Of course, the insurance industry cannot be opened up untilthe necessary amendments have been made to the LIC Act 1956 and the GeneralInsurance Business Act 1972. It was expected that this Bill would be debated inDecember 1996. However, considering the strength of opposition to the Bill, and thetime needed to draft new guidelines and issue licences, it is likely to be at least 18months before any changes are implemented. something which foreign insurers havealready taken into accountThe Reserve Bank of India (RBI, the central regulatory bank in India) has in themeantime granted approval to four foreign insurance companies to open liaison

    offices in India. These will act only as channels of communication between parties inIndia and their head offices abroad and are not permitted to undertake any insurancebusiness in India.As was expected, the existing insurance companies, both at the managerial andemployee level, have strongly opposed and criticized any move to privatize insurance.A lot of criticism has also come from the coalition partners of the United Frontgovernment. There seems to be little support for the move to privatize.

    Informally, and in the belief that change will finally come about, several Indian andforeign insurance companies have been neeotiatinc possible tie-ups in life and generalinsurance business. So far, nearly 18 global insurance majors have signed memorandaof understanding. It is rumoured in insurance circles that the government is likely togive licences in the initial years only to a handful of companiespossibly only sixThree in life and Three in general insurance business. A considerable amount ofmarket research and product blue print has already been done.The following proposals were included in the 1997 Finance Bill (announced on 28February 1997) -The Life Insurance Corporation of India (LIC) and the General Insurance Corporationof India (GIC) should enjoy substantial autonomy, including the power to make non-scheduled, non-consortium investments.LIC should be permitted to promote joint ventures in pensions fund business.GIC should be permitted to promote joint ventures in health insurance business.

    Selected Indian companies with majority Indian ownership should be allowed toundertake business in the health insurance sector.LIC should continue to enjoy a monopoly in life insurance business and GIC shouldretain a monopoly in non-life, non-health insurance business.Comprehensive regulations relating to prudential, investment and social norms should

    be made and enforced by the Insurance Regulatory Authority for all service providersin the insurance industry.

    Hence, it was decided to allow competition in a limited way bystipulating the minimum capital requirement of Rs.100 crores. The committee felt the

    need to provide greater autonomy to insurance companies in order to improve theirperformance and enable them to act as independent companies with economic

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    motives. For this purpose, it had proposed setting up an independent regulatory body.

    Benefits of Insurance

    Safeguards oneself and one's family for future requirementsIf you are married without children or single, then you may need life

    insurance to protect your partner or surviving family members against the costsassociated with your death. Funeral expenses, probate and administrative fees,outstanding debts, special obligations to charities, and federal and state taxes are coststhat all of us must consider.

    Disability Benefits

    Death is not the only hazard that is insured; many polices alsoinclude disability benefits. Typically, these provide for waiver of future premiums andpayment of monthly installments spread over certain time period.

    Accidental Death BenefitsMany policies can also provide for an extra sum to be paid.

    (typically equal to the sum assured) if death occurs as a result of accident)

    Tax ReliefUnder the Indian Income Tax Act, the following tax relief is


    a) 20 % of the premium paid can be deducted from your total income tax liability.

    b) 100 % of the premium paid is deductible from your total taxable income.

    When these benefits are factored in, it is found that most polices offer returnsthat are comparable or even better than other saving modes such as PPF, NSC etc.Moreover, the cost of insurance is a very negligible.

    Encourage SavingsUnlike any other savings plan, a life insurance policy affords full

    protection against risk of death. In the event of death of a policyholder, the insurance

    company makes available the full sum assured to the policyholders' near and dearones. In comparison, any other savings plan would amount to the total savingsaccumulated till date. If the death occurs prematurely, such savings can be muchlesser than the sum assured. Evidently, the potential financial loss to the family of the

    policyholder is sizable.

    Ready Marketability and Suitability for Quick BorrowingA life insurance policy can, after a certain time period (generally

    three years), be surrendered for a cash value. The policy is also acceptable as asecurity for a commercial loan, for example, a student loan. It is particularly advisablefor housing loans when an acceptable LIC policy may also cause the lending

    institution to give loan at lower interest rates.

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    Indian PartnerForeign PartnerSpecializationPresent StatusHDFCStandard LifeUKLifeStarted OperationMax IndiaNew York LifeLifeStarted OperationBajaj

    AutoAllianzLifeStarted OperationKotak MahindraOld Mutual SouthLifeStartedOperationICICIPrudential UKLifeStarted OperationTATA GroupAIG,USALife &non-LifeStarted OperationBirla GroupSun LifeLifeStarted OperationVysyaBankINGLifeStarted OperationSBICardiff, FranceLifeStarted Operation

    Registered insurers in IndiaType of businessPublic sectorPrivate sectorTotalLifeinsurance11314General insurance6814Reinsurance101Total82129


    There are mainly 29 companies in the both general insurance as well as

    the life insurance and here in the graph I bifurcated the general insurance , lifeinsurance , and the reinsurance.

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    ICICI Prudential ranks as number one amongst the private lifeinsurance players. There is vast potential for this company in Indian market. ICICIPrudential is moving really fast to capture untapped market and it is expanding itsoperations in different regions in India. The company not only stands No. 1 but alsotreats its employees as No.1. No other company provides rewards and recognition totheir employees and advisors as done by ICICI Prudential. The culture of ICICIPrudential is like a Hindu Undivided Family. It worked on the fundamental of

    building relations. As we look as current performance and future targets laid down byICICI Prudential, it brings in our mind the words of the great poet :




    Hence we firmly believe we could not get better exposure to life

    insurance if we would not have joined ICICI Prudential.

    ICICI Prudential life insurance company limited is one of the leadinginsurance companies in the private sector. Also it was the private sector company inIndia to enter the business of insurance.

    Insurance Regulatory and Development Authority The Watch Dog

    On 19th April 2000, the Authority has been notified in the Gazette of India

    in terms of Insurance Regulatory and Development Authority Act, 1999 TheAuthority has also been constituted.


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    To protect the interests of the policyholders, to regulate, promote and ensureorderly growth of the insurance industry and for matters connected therewith orincidental thereto.



    14(1) Subject to the provisions of this Act and any other law for the time being inforce, the Authority shall have the duty to regulate, promote and ensure orderlygrowth of the insurance business and re-insurance business.14(2) Without prejudice to the generality of the provisions contained in sub-section

    (1), the powers and functions of the Authority shall include,--

    a. Issue to the applicant a certificate of registration, renew, modify, withdraw,suspend or cancel such registration;

    b. Protection of the interests of the policy-holders in matters concerning assigningof policy, nomination by policy-holders, insurable interest, settlement of insuranceclaim, surrender value of policy and other terms and conditions of contracts ofinsurance;c. Specifying requisite qualifications, code of conduct and practical training forintermediary or insurance intermediaries and agents;d. Specifying the code of conduct for surveyors and loss assessors;e. Promoting efficiency in the conduct of insurance business;f. Promoting and regulating professional organization connected with theinsurance and re-insurance business;g. Levying fees and other charges for carrying out the purposes of this Act;(h) calling for information from, undertaking inspection of, conducting enquiries andinvestigations including audit of the insurers, intermediaries, insurance intermediariesand other organizations connected with the insurance business;h. Control and regulation of the rates, advantages, terms and conditions that may

    be offered by insurers in respect of general insurance business not so controlled and of1938 regulated by the Tariff Advisory committee under section 64U of the InsuranceAct, 1938;i. Specifying the form and manner in which books of account shall be maintainedand statement of accounts shall be rendered by insurers and other insurance

    intermediaries;j. Regulating investment of funds by insurance companies;(l) regulating maintenance of margin of solvency;k. Adjudication of disputes between insurers and intermediaries or insuranceintermediaries;l. Supervising the functioning of the Tariff Advisory committee;m. Supervising the percentage of premium income of the insurer to financeschemes for promoting and regulating professional organization referred to in clause(f);n. Specifying the percentage of life insurance business and general insurance

    business to be undertaken by the insurer in the rural or social sector; and

    o. Exercising such other powers as may be prescribed.

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    The founder chairman of IRDA was Mr. N.Rangachary. It was under his

    stewardship that the Indian Insurance industry really opened up.

    Chairman: Mr. C. S. RaoThe IRDA is located at3rd Floor, Parisrama Bhavanam5-9-58/B, Fateh Maidan RoadBasheerbaghHyderabad - 500 004Ph:040-55820964

    040-55789768Fax: 55823334


    Here below who are the key players in the insurance market areshown with their Market share.

    PLAYERSMARKET SHARELIC80%ICICI Prudential6.7%Birla Sun Life3.3%BajajAllianz2.8%SBI Life2.2%Tata AIG1.3%Max NYL0.9%MetLife0.2%Aviva0.8%Om Kotak0.6%ING Vysya0.4%AMP Sanmar0.3%



    The main players in the insurance sector are given in the table with theirmarket share. I should say that before privatization only LIC is there so a kind ofmonopoly so that there is 80% market share and the rest 20% are divided in other

    private insurance companies.

    I should say that after LIC the next rank goes to ICICI Prudential lifeinsurance and it is 6.7% and it is increasing day by day. So as the present situation

    now LIC day by day loosing their market share because of the private players in themarket.

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    In India the whole population we consider at a 100% then from theabove chart we can say that there are 80% People which do not have any kind of


    So we can conclude that there is a wide scope for the insurance in thedeveloping country like India. At present Insurance industry is growing like leaps and


    ICICI Prudential Life Insurance Company Limited

    ICICI Prudential Life Insurance Company Limited was incorporated on

    July 20, 2000. The authorized capital of the company is Rs.2300 Million and the paid

    up capital is Rs. 1500 Million. The Company is a joint venture of ICICI (74%) andPrudential plc UK (26%).

    The Company was granted Certificate of Registration for carrying outLife Insurance business, by the Insurance Regulatory and Development Authority on

    November 24, 2000. It commenced commercial operations on December 19, 2000,becoming one of the first few private sector players to enter the liberalized arena.Till March 31,2002 the Company has issued 100,000 polices translating into aPremium Income of around Rs. 1,200 Million and a sum assured of over Rs.15,000Million.

    The Company recognizes that the driving force for gaining sustainablecompetitive advantage in this business is superior customer experience and

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    Corporate Office:ICCI Prulife Towers,1089, Appasahab Marathe Marg,Prabhadevi,Mumbai 400 025.Telephone Number: 022-462 1600

    Website : HYPERLINK "http://www.iciciprulife.com/"http://www.iciciprulife.com/


    Board of DirectorsThe ICICI Prudential Life Insurance Company Limited Board

    comprises reputed people from the finance industry both from India and abroad.

    Mr. K.V. Kamath, ChairmanMr. Mark NorbomMrs. Lalita D. GupteMrs. Kalpana MorpariaMrs. Chanda KochharMr. HT PhongMr. M.P. ModiMr. R Narayanan

    Ms. Shikha Sharma, Managing DirectorMr. N.S. Kannan, Executive Director

    Management Team

    Ms. Shikha Sharma, Managing Director & CEOMr. N.S. Kannan, Executive DirectorMr. V. Rajagopalan, Chief - ActuaryMr. Sandeep Batra, Chief Financial Officer & Company SecretaryMs. Anita Pai, Chief - Customer Service and OperationMr. Puneet Nanda, Chief - Investments

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    To make ICICI Prudential the dominant Life and Pensions player built on trustby world class people and service.This we hope to achieve by:Understanding the needs of customers and offering them superior products andserviceLeveraging technology to service customers quickly, efficiently and convenientlyDeveloping and implementing superior risk management and investment strategies tooffer sustainable and stable returns to our policyholdersProviding an enabling environment to foster growth and learning for our employeesAnd above all, building transparency in all our dealings.

    The success of the company will be founded in its unflinching commitment toCore values

    IntegrityCustomer FirstBoundrylessOwnershipPassion


    Be honest and fair in what you say and what you doPractice what you preach.Stand up honestly and fearlessly for what is right.Act in a consistent and equitable manner.Think and act for long term impact.Do not compromise the future to pay for the present.


    Own the customer; deliver the promise.

    Keep customer interest in the centre of all decisions.Promise what you can, deliver it to finish.Proactively seek voice of customer and act on it.


    Never say Its not my job.Offer help and support across functions to ensure business success.

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    Seek and share ideas freely.Recognize and respect internal customers.Understand and value contributions from colleagues.

    Nurture and motivate team members to reach full potential.


    If it is to be, it is up to me.Take responsibility and see task through completion.Own mistakes, learn from failures.Pursue goals relentlessly, never give up.Be a team player, take ownership for a team performance.


    Boundless energy and enthusiasm.Exhibit Winning Instinct.Demonstrate speed and urgency for achieving results.Challenge status quo and do things differently.

    Each of the values describes what the company stands for, the qualities ofpeople and the way they work.

    ICICI prudential life insurance do believe that we are on thethreshold of an exciting new opportunity, where we can play a significant role inredefining and reshaping the sector. Given the quality of our parentage and thecommitment of our team, there are no limits to our growth.

    Fact SheetTHE COMPANY

    ICICI Prudential Life Insurance Company is a joint venture betweenICICI Bank, a premier financial powerhouse, and Prudential plc, a leadinginternational financial services group headquartered in the United Kingdom. ICICIPrudential was amongst the first private sector insurance companies to beginoperations in December 2000 after receiving approval from Insurance RegulatoryDevelopment 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 periodApril- December, 2005, the company garnered Rs 1,430 crore of new business

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    premium for a total sum assured of Rs 15,170 crore and wrote 497,765 policies. Forthe past four years, ICICI Prudential has retained its position as the No. 1 private lifeinsurer in the country, with a wide range of flexible products that meet the needs ofthe Indian customer at every step in life.

    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. TheAAA rating is the highest credit rating, and is a clear assurance of ICICI Prudentialsability to meet its obligations to customers at the time of maturity or claims.DISTRIBUTION

    ICICI Prudential has one of the largest distribution networks amongstprivate life insurers in India, having commenced operations in over 116 cities andtowns in India, stretching from Bhuj in the west to Guwahati in the east, and Amritsarin the north to Trivandrum in the south.

    The company has 8 bancassurance tie-ups, having agreements withICICI Bank, Bank of India, Federal Bank, South Indian Bank, Ernakulam Bank, LordKrishna Bank and some co-operative banks, as well as about 290 corporate agents and

    brokers. It has also tied up with NGOs, MFIs and corporate for the distribution ofrural policies and organizations like Dhan for distribution of Salaam Zindagi, a policyfor the socially and economically underprivileged sections of society.

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


    Here above given that there is a joint venture of ICICI BANK and U.K.BASED PRUDENTIAL COMPANY. So there is 74% equity holding of ICICIBANK and 24% is of PRUDENTIAL COMPANY.

    News Releases

    Below are the 5 most recent news releases issued by ICICI Prudential

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    Life Insurance Company.ICICI Prudential Life Insurance crosses two million policies milestoneMumbai; February 21, 2006ICICI Prudential records 76% quarter-on-quarter growth in Q306

    Mumbai, January 19, 2005Fitch Rates India's ICICI Prudential Life Insurance IFS 'AAA(ind)'Fitch Ratings-London/Mumbai-16 January 2006ICICI Prudential marches into 5th year of Bank of India partnershipMumbai; December 1, 2005ICICI Prudential Life Insurance bridges the GulfBahrain; November 28, 2005

    ICICI Pru in the News

    ICICI PruLife unveils unit-linked productsBusiness Line June 03, 2005Let life insurers into derivatives markets'Business Line May 23, 2005ICICI Pru InvestShield LifeBusiness Line May 08, 2005ICICI Pru's new business jumps 77% to cross Rs 1K crThe Economic Times April 13, 2005Insurance now a bigger draw for agents than MFsThe Economic Times - April 08, 2005


    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. Itsproducts can be enhanced with up to 5 riders, to create a customized solution for eachpolicyholder.Savings SolutionsSecurePlus :

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

    CashPlus is a transparent, feature-packed savings plan that offers 3 levels

    of protection as well as liquidity options.SavenProtect :

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    SavenProtect is a traditional endowment savings plan that offers lifeprotection along with adequate returns.CashBak

    CashBak is an anticipated endowment policy ideal for meetingmilestone expenses like a childs marriage, expenses for a childs higher education or

    purchase of an asset.LifeTime & LifeTimeIILifeTime & LIfeTimeII offer customers the flexibility and control to

    customize the policy to meet the changing needs at different life stages. Each offer 4fund options ? Preserver, Protector, Balancer and Maximiser.LifeLink II

    LifeLink II is a single premium Market Linked Insurance Plan whichcombines life insurance cover with the opportunity to stay invested in the stockmarket.

    Premier Life : Premier Life is a limited premium paying plan that offers customerslife insurance cover till the age of 75.InvestShield Life :

    InvestShield Life is a Market Linked plan that provides capitalguarantee on the invested premiums and declared bonus interest.InvestShield Cash :

    InvestShield Cash is a Market Linked plan that provides capitalguarantee on the invested premiums and declared bonus interest along with flexibleliquidity options.InvestShield Gold :

    InvestShield Gold is a Market Linked plan that provides capitalguarantee on the invested premiums and declared bonus interest along with limited

    premium payment terms.Protection SolutionsLifeGuard :LifeGuard is a protection plan, which offers life cover at very low cost. It is availablein 3 options. which are as follows.Level Term Assurance with return of premiumLevel Term Assurance without return of premiumLevel Term Assurance - Single premium


    HomeAssure is a mortgage reducing term assurance plan designedspecifically to help customers cover their home loans in a simple and cost-effectivemanner.

    Child PlansSmartKid education plans :

    As a responsible parent, you will always strive to ensure a hassle-free,successful life for your child. However, life is full of uncertainties and even the best-

    laid plans can go wrong. Heres how you can give your child a 100% safe and assuredtomorrow, whatever the uncertainties. SmartKid is especially designed to provide

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    flexibility and safeguard your childs future education and lifestyle, taking allpossibilities into account.

    SmartKid regular premium

    SmartKid unit-linked regular premiumSmartKid unit-linked regular premium IISmartKid unit-linked single premium II

    Retirement SolutionsLife Expectancy has been rising rapidly and today you can expect to live longer thanyour earlier generations. For you, this increase will mean a longer retirement life,stretching into a couple of decades. ICICI Prudential presents Retirement Solutionsthat combine the best of insurance and investment. These solutions are developed toensure your peace of mind for the years to come.

    Choose from amongst 6 retirement plans:Golden yearsA flexible unit-linked retirement solution that offers flexibilities during theaccumulation as well as payout phase.Investment shield pensionA regular premium unit-linked pension plan with an assurance of Capital Guarantee*

    Life Time Pension IIA regular premium linked pension plan that gives you the freedom to choose theamount of premium, and invest in market-linked funds, to generate potentially higherreturns.Life Link Pension IIA single premium linked pension plan that gives you the freedom to choose theamount of premium, and invest in market-linked funds, to generate potentially higherreturns.

    Secure Plus PensionA regular premium pension plan that gives you the flexibility to choose

    between 3 levels of sum assured for the same level of total annual contribution

    ForeverLifeA regular premium pension plan that helps you save for your retirement while

    providing you with life insurance protection.ForeverLife

    ForeverLife is a retirement product targeted at individuals in theirthirties.SecurePlus Pension

    SecurePlus Pension is a flexible pension plan that allows one to select

    between 3 levels of cover.Market-linked retirement products

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    LifeTime Pension IILifeTime Pension II is a regular premium market-linked pension plan.

    LifeLink Pension IILifeLink Pension II is a single premium market-linked pension plan.

    InvestShield Pension

    InvestShield Pension is a regular premium pension plan with a capitalguarantee on the investible premium and declared bonuses.Golden Years:

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

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

    Health Solution

    Health Assure: Health Assure is a regular premium plan which provides long termcover against 6 critical illnesses by providing policyholder with financial assistance,irrespective of the actual medical expenses.Health Assure Plus:

    Health Assure Plus is a regular premium plan which provides longterm cover against 6 critical illnesses by providing financial assistance, irrespective ofactual medical expenses, as well as an equivalent life insurance cover.Group Insurance Solutions

    ICICI Prudential also offers Group Insurance Solutions forcompanies seeking to enhance benefits to their employees.ICICI Pru Group Gratuity Plan:

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

    ICICI Pru offers a flexible defined contribution superannuation scheme toprovide a retirement kitty for each member of the group. Employees have the optionof choosing from various annuity options or opting for a partial commutation of theannuity at the time of retirement.ICICI Pru Group Term Plan:

    ICICI Prus flexible group term solution helps provide affordable coverto 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 nominatedby the member on his/her death.

    Flexible Rider OptionsICICI 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

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    policy. If the death occurs while traveling in an authorized mass transport vehicle, thebeneficiary 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 toaccident.

    Critical Illness Benefit:Critical Illness benefit protects the insured against financial loss in theevent of 9 specified critical illnesses. Benefits are payable to the insured for medicalexpenses prior to death.Income Benefit:

    This rider pays the 10% of the sum assured to the nominee everyyear, till maturity, in the event of the death of the life assured. It is available onSmarKid, SecurePlus and CashPlus.

    Waiver of Premium

    In case of total and permanent disability due to an accident, thepremiums are waived till maturity. This rider is available with SecurePlus andCashPlus.

    Investment Plan

    LifeLink II :

    LifeLink II is a unique plan that combines the security of a life insurancepolicy with the opportunity of enjoying high returns on your investments, without themarket risks compromising on the protection of your family!

    Keyman Plans

    A keyman is an individual who directly affects the profitability and thecontinuity of a business and whose absence may have an adverse effect on the healthand continuity of the business. Keyman insurance is a life insurance policy taken bythe company on the life of such a key person.

    The objective of the keyman insurance is to provide the company withmoney so that the financial losses to the company can be protected, in absence of thekeyman. The aim is to indemnify the company of these losses and to allow businesscontinuity.

    All premiums paid for securing a keyman life insurance policy aretreated as business expenditure u/s 37 (1).

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    ICICI Prudential is the 1st life insurance company to introduce unit linked, pensionproducts and life time it can get the pioneer advantage.

    Prudential is the 156 year old company founded in 1848 so it has full fledgeexperience in this industries.ICICI enjoys a rating with the Moodys which is higher than the severing rating.Large distribution channel with 30 branches and more than 30,000 financial advisors.ICICI Prudential has the best incentives which motivate and encourage the advisors towork and fulfill the commitment.The financial condition of both companies is very sound.Good customer has service.Company has created a brand name.


    It has to do operation within the boundary of IRDA.Up till one no more option of product for middle class offered by ICICI Prudential.

    No option in rural area.Yet to build a strong distribution network in the market.


    Today ICICI Prudential covers 40% Market so yet there is a great potentiality toincrease market share.

    Insurance plan like pension plan, child plan and investment plan of ICICI Prudentialgo good response from the market. So in future company can take benefit for it.

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    The brand name that creates ICICI Prudential and awareness level of it iscomparatively quite higher than competition. So it will be helpful in future whilelunching new innovation products.Untapped market of India.


    It is private company so there is a doubt about solvency and liquidity among thegeneral people.Change in the environmental factors many affects the company.The government policies and the annual budget may the insurance market.

    Large distribution network of LIC and trust of people in LIC.

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    Relevance of study



    Research has its special significance in solving various operational andplanning problems of business and industry.

    Research inculcates scientific and inductive thinking and promotes thedevelopment logical habits of thinking and organization.

    Thus, Research is the fountain of knowledge for the sake of knowledgeand an important source of providing guidelines for solving different business,governmental and social problems. It is a sort of formal training which enables one to

    understand the new developments in ones field in a better way.

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    In ICICI Prudential Life Insurance

    Study would identify the avenue of Investment which yields maximum return.It would analyze whether ICICI Prudential return is moving along with the market

    return.It would reveal the state of competition among ICICI Prudential companies.It would suggest the integration of ICICI with prudential.It would also determine the risk return relationships associated with different productsof ICICI Prudential.


    The first and foremost step happens to be that of selecting andproperly defined research problem.

    RESEARCH PROBLEM refers to some difficulty which aresearcher experiences in the context of either a theoretical or practical situation andwants to obtain a solution for the same.

    A Research problem is one which requires a researcher to find outthe best solution for the given problem that is to find out by which course of action

    the objective can be attained optimally in the context of a given environment.

    Thus zest for the work is must. The subject or the problem selectedmust involve the researcher and must have an upper most place in his mind so thathe/she may undertake all pains needed for the study.

    I have selected the research problem in ICICI Prudential LifeInsurance is as follows :

    To know the Investment Pattern of the ICICI Prudential life insurance.

    To know the Investors approach towards the return given by ICICI Prudential Life

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    So, above two are very important research problem that I want tostudy and get the solution of it.


    The word objective means purpose behind doing anything.

    Every research study has its own specific research objective. Withoutobjective no one is doing any work. To do anything there is a purpose behind it.

    Here in ICICI Prudential my research objectives are as follows

    To know Investment Pattern of ICICI Prudential Life Insurance company.

    To know the Investors approach towards the return provided by the ICICI Prudential

    Life Insurance.

    To know the Satisfaction of the investors towards the return offered by the ICICIPrudential Life Insurance.

    Here above are the very important research objective that I want tostudy and carry out the optimum solution for it.

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    Scope of study means the study whichever is carried out where it will helpfulin future.

    In the same way Investment Pattern of ICICI Prudential Life InsuranceCompany is helpful in the following ways

    It will be helpful to the company to know where it is lacking behind.

    The study will helpful to know the investors satisfaction towards return provided byICICI Prudential Life Insurance Company.

    On the basis of the study company can take the corrective actions.

    The study will be helpful to know the investment pattern in comparison to LIC.

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    Life Insurance Statistics PREMIUM(Rs. in Mn.)MARKET SHARE(%) 2002-

    032003-04% Growth2002-032003-04 AllianzBajaj633.891797.05183.500.370.96ING Vyasa176.59726.07311.160.10.39AMPSanmar63.15278.82341.510.040.15SBI Life718.811959.01172.530.421.05TataAIG522.081801.55245.070.310.96HDFC Standard1293.142093.3361.880.761.12ICICI Prudential3641.077509.10106.232.154.01BirlaSunlife 1295.684498.62247.200.772.4Aviva134.66771.38472.840.080.41OmKotak352.11271.02260.980.210.68Max Newyork673.141314.8895.340.40.7Metlife76.99233.82203.700.050.12 Pvt.Total9581.324254.64153.155.6612.95 LIC159767.62162846.871.9394.3487.05Total169348.92187101.510.48100100 (Source:IRDA Journal May 2004)

    EMBED Excel.Chart.8 \s


    We can analyze that market share of LIC and private insurance companies.87% is of LIC and 13% is private insurance companies. As the study on ICICI

    Prudential life insurance the market share is the highest which is 4.01% in the year2003-04.

    PREMIUM(Rs. in Mn.)MARKET SHARE(%) 2002-032003-04% Growth2002-032003-04Pvt. Total9581.324254.64153.155.6612.95

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    EMBED Excel.Chart.8 \s


    Here in the above chart we can see the market share of the private players inthe year 2002-03 and in the year 2003-04.

    Company 2002-032003-04% Growth Allianz Bajaj633.891797.05183.50INGVyasa176.59726.07311.16AMP Sanmar63.15278.82341.51SBILife718.811959.01172.53Tata AIG522.081801.55245.07HDFC Standard1293.142093.3361.88ICICI Prudential3641.077509.10106.23Birla Sunlife1295.684498.62247.20Aviva134.66771.38472.84Om Kotak352.11271.02260.98Max

    Newyork673.141314.8895.34Metlife 76.99233.82203.70

    EMBED Excel.Chart.8 \s


    From the above chart we can interpret that there is a growth in each andevery private life insurance company. But as we can say there is maximum growth inICICI Prudential Life Insurance which is 106.23%. The amount is increase from3641.07 to 7509.10

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    Sr. No.Type of InvestmentPercentage1. Government Security25%2.Governmentsecurities or other approved securities (including 1.)Not less than 50%3. Approvedinvestments as specified in schedule IInfrastructure and social sectorOthers to be governed by exposure norms (investments in other than in Approved

    investments in no case can exceed 15% of the fundNot less than 15%

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    Not exceeding 35%

    Sectoral Investments by Life InsurerPercentage ShareInvestment Profile LIC(Public Sector) Private SectorTotal 31/3/04 31/3/03 31/3/04 31/3/03 31/3/04 31/3/03 Central Government

    Securities 48.1 53.6 38.8 47.8 48.0 53.6 State Govt. & OtherApproved Securities (Including C.G.Sec.) 11.0 11.1 5.2 3.8 11.0 11.0 Infrastructureand Social Sector 11.0 12.0 10.9 13.5 11.0 12.0 Investment subject to Exposure norms(Including OTAI) 25.0 22.8 39.3 30.5 25.3 22.9 Other than approved investments(OTAI) 4.8 0.4 5.8 4.4 4.8 0.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 Source:IRDA, P. 13, Vol. II, No.12-13, November 2004.



    Market linked plans

    Choice of fund:

    There are four fund options available to the policyholder:PlanRiskInvestmentPatternMaximiserHighEquity - 100%Debt - 25%BalancerAverageDebt - 60%

    Equity - 40%ProtectorModerateDebt - 100%Equity - 25%PreserverLowDebt - 50%Equity - 50%

    Market Linked Pension Plans at a glance:

    ParticularsLifeTime PensionLifeLink PensionMin. Age at Entry18yrs18yrsMax. Ageat Entry60yrs (65yrs for zero death benefit)72yrsMax cover ceasing Age70yrs MinTerm10yrs3yrsMax TermTill vesting Age Min Vesting Age45yrs45yrsMax VestingAge75yrs75yrsModes of paymentYearly, Half Yearly and Monthly.Single.

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    Unit Linked Smart Kid II - SP

    Choice Of Fund

    There are four fund options available to the policyholder:PlanRiskInvestment PatternMaximiserHighEquity - 100%Debt - 25%BalancerAverageDebt - 60%Equity - 40%ProtectorModerateDebt - 100%Equity - 25%PreserverLowDebt - 50%

    Equity - 50%

    SmartKid - II (SP) at a Glance

    Min Age at Entry20 yrsMax Age at Entry60 yrsMax Cover Ceasing Age70yrsMinimum ContributionSingle Premium - Rs. 50,000/-Minimum Term10yrsMaximum Term25 yrsChild's Age0 - 15 yrs.

    Unit Linked Smart Kid I - RP

    Choice Of Fund

    There are four fund options available to the policyholder:PlanRiskInvestment PatternMaximiserHighEquity - 100%

    Debt - 25%BalancerAverageDebt - 60%Equity - 40%ProtectorModerateDebt - 100%

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    Equity - 25%PreserverLowDebt - 50%Equity - 50%

    SmartKid - I (RP) at a Glance

    Min Age at Entry20 yrsMax Age at Entry60 yrsMax Cover Ceasing Age70yrsMinimum ContributionAnnual - Rs. 18,000/-Half-Yearly - Rs. 9,000/-Monthly -Rs. 1,500/-Minimum Term10 yrsMaximum Term25 yrsChild's Age0 - 15 yrs.

    Unit Linked Smart Kid II - RP

    Choice Of Fund

    There are four fund options available to the policyholder:PlanRiskInvestment PatternMaximiserHighEquity - 100%Debt - 25%BalancerAverageDebt - 60%Equity - 40%ProtectorModerateDebt - 100%Equity - 25%PreserverLowDebt - 50%Equity - 50%

    SmartKid - II (RP) at a GlanceMin Age at Entry20 yrsMax Age at Entry60 yrsMax Cover Ceasing Age70yrsMinimum ContributionAnnual - Rs. 18,000/-Half-Yearly - Rs. 9,000/-Monthly -Rs. 1,500/-Minimum Term10 yrsMaximum Term25 yrsChild's Age0 15 yrs.

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    Choice of Fund:

    The policyholder has the flexibility of investing in all the four funds in the proportionhe wishes under one single policy. Following are the fund options:

    PlanRiskInvestment PatternMaximiserHighEquity - 100%Debt - 25%BalancerAverageDebt - 60%Equity - 40%ProtectorModerateDebt - 100%Equity - 25%PreserverLowDebt - 50%Equity - 50%

    LifeLink - at a glance:

    Min age at entry0 yearsMax age at entry60 yearsMax cover ceasing age70yearsMinimum ContributionRs 50,000Modes of paymentYearly, Half-Yearly andMonthlyDeath BenefitThe death benefit is higher of the Sum Assured reduced by thewithdrawals or the value of units, at the time of death. However, the death benefit

    before 7 years of age or after 70 years of age would only be the value of investments.


    Choice of fund:

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    and MonthlyAdditional Riders OfferedAccidental Death Benefit RiderWaiver of PremiumCritical Illness Rider

    Invest Shield Cash

    Unit Linked Plan With Capital Guarantee

    The asset allocation of the unit fund in Invest Shield Cash is:

    Asset Allocation% MixDebt and Money Market Instrument100%

    Invest Shield Cash features at a glance:

    Death BenefitSum Assured + Higher of the value of Unit Fund or the guaranteedvalue of Unit Fund.Maturity BenefitHigher of the value of Unit Fund or theguaranteed value of Unit Fund.Liquidity BenefitFrom 6th year onwards in the policy,withdrawal of upto 10% of the value of unit fund is possible. This is available onlyonce during a policy year.Age at EntryMinimum: 0 yearsMaximum: 60 yearsMaximum Age at Maturity75 yearsTerm of the PolicyMinimum:10 yearsMaximum: 30 yearsBonus InterestTo be declared at the end of every financial year,on the guaranteed value of the unit fund.Top-Up InvestmentsMinimum Amount of Rs2,500/-Minimum Annual PremiumRs 8,000/-Modes of PaymentYearly, Half-Yearlyand MonthlyAdditional Riders OfferedAccidental Death Benefit Rider.Waiver of Premium.Critical Illness Rider.

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    Invest Shield Pension

    Unit Linked Plan With Capital Guarantee

    The Asset Allocation is as follows:Asset Allocation% MixDebtMinimum: 70%Maximum: 100%EquityMinimum: 0%Maximum: 30%Invest Shield Pension Features at a glance:

    Death BenefitSum Assured + Higher of the value of Unit Fund or the guaranteedvalue of Unit Fund. The nominee, as lump sum or to take a pension, can use thisvalue.Maturity (Vesting) BenefitHigher of the value of Unit Fund or the guaranteedvalue of Unit Fund will be used to purchase an annuity.Commutation BenefitAt

    vesting, the policyholder can take upto 1/3rd of the benefit value. The remainingamount is used to buy an annuity.Sum Assured OptionsOption1: ZERO Sum Assured.Option2: A Sum Assured as a multiple of the annual premium. Age atEntryMinimum: 18 yearsMaximum: 60 years (when a Sum Assured is chosen); 65 years (for ZERO SumAssured).Age at Maturity (Vesting)Minimum: 45 yearsMaximum: 75 yearsTerm of the policyMinimum: 10 yearsMaximum: 30 yearsBonus InterestTo be declared at the end of every financial year,on the guaranteed value of the unit fundTop-Up InvestmentsMinimum Amount ofRs.2,500/-Minimum Annual PremiumRs.10,000/-Modes of PaymentYearly, half-Yearly and MonthlyAdditional Riders OfferedAccidental Death Benefit RiderWaiver of Premium.Annuity Options5 options available.

    Invest Shield Gold

    Unit Linked Plan With Capital Guarantee

    The Asset Allocation is as follows:

    Asset Allocation% MixDebtMinimum: 70%Maximum: 100%EquityMinimum: 0%Maximum: 30%Invest Shield Gold Features at a glance:

    Death BenefitSum Assured + Higher of the value of Unit Fund or the guaranteedvalue of Unit FundMaturity BenefitHigher of the value of Unit fund or the guaranteedvalue of Unit fundLimited Premium Paying TermChoice of a premium paying term of5, 7 or 10 years with a corresponding coverage term of 10, 15 and 20 yearsAge atEntryMinimum: 0 yearsMaximum:60 yearsMaximum Age at Maturity75 yearsTerm of the policyMinimum:

    10 yearsMaximum 20 yearsBonus InterestTo be declared at the end of every financial year, on

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    There are many limitation are there while conducting my study whichare as follows.

    Time constraint : As the Project training is of 2 month we cant get the proper datawithin a limited time period.

    Confidential information is not shared due to business secrecy and the lack of trust.

    They are not at all ready to give any financial information to the trainees for theirstudy of project.

    Due to time constraints the executives of the company are not able to allot time to thetrainees

    Sample size is also one of the limitations as it is not represent the whole population.Because of this we can not or not give the proper results.

    Sampling design may also be one limitation in the study. As sampling design may notrepresent the whole population.

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    100,000.There are 6% and 4% people are of the income 300,000 to 499,999 and More than500,000 respectively.

    As per the general research we can say that middle class people are

    always more as compared to the upper class. The same thing is also we can seethrough the chart.


    How the persons are making their investment portfolio ?

    Bank F.D.18Stock Market2Government Security13Mutual Fund1Postoffice7PPF5Others4


    From the above chart we can see that people are more believing in thebank fixed deposit, and then they come to the Government security and then Postoffice. Here as my research is on insurance all persons are investing in insurance moreor less.

    From the above chart we can easily say that investors are risk aversethey do not want to go for risky things. Here in the above chart in others I includedthe Gold, Land and building etc. so people are also believe to invest in gold and othersassets.


    People having policy of which policy ?

    LIC & ICICI Prudential36ICICI Prudential & HDFC std. life14

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    Here form the above chart we can see that people having the combinationof the ICICI Prudential and LIC. People are more believing in LIC as LIC is thegovernment body. They are always having the doubt about the private companies but

    now they are becoming broad minded and purchasing the policies of privatecompanies. Here the combination LIC and ICICI is 72% and combination of ICICIand HDFC is 28%.


    Approximately How much return the investors having ICICI Prudential policy aregetting?

    4 to 616 to 8198 to 10 23More than 107


    From the above chart we can see that there are the average returnsgetting by the investors from the ICICI Prudential life insurance is between 6 to 8

    percentage and 8 to 10 percentage. Higher return is also given by the ICICI is about14% of people is getting. There are also 2% people whichever getting very low returnas 4 to 6%.

    So the return given by the ICICI Prudential life insurance is between 6 to10%. Which we can consider as the average return.


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    According to you Does the return on insurance cover exceeds cost?



    From the above chart we can say that many persons are not say anythingor we can say that they do not gave any opinion about the return and cost of the


    There 26% investors says that the return of policy hold by them isexceeds the cost that they are incurring on the plan. In the same way there are 16%investors says that the return of policy hold by them is not exceeds the cost.

    From the above chart we can say that the investor believing that there ismore return than the cost incurred as there are many benefits of the insurance like lifecover, tax benefit, loan on investment etc.


    What do you feel about return ?

    Extremely satisfied4Highly satisfied10Moderately satisfied21Satisfied12Notsatisfied3


    From the above chart we can see that investor by investing in theinsurance sector they are moderately satisfied. Major portion is cover by themoderately satisfied that is 42%. Next rank is of the satisfied that is 24%. 20% of the

    people are highly satisfied by investing in the insurance sector and 8% are extremelysatisfied. There is also a portion of not satisfied by the return getting from the ICICIPrudential Life Insurance.

    As the general research we can say there is a less return in the insurance ascompared to the equity and stock market. So those major portions of the investors aremoderately satisfied by the return from the Icici prudential life insurance.

    Here we can also say that insurance is taken to avoid the risk or to reducethe risk. So where there is less risk there is less return as the principle of risk and

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    return says.


    Which factor do you consider while investing in life insurance?

    Risk & Return13Risk & Tax benefit11Liquidity & Return12Tax benefit14


    From the above chart we can say that persons are investing in theinsurance because of the tax benefit they are not aware about the concept of theinsurance. Now gradually people are becoming aware about the insurance and its


    According the situation and the individual belief investors areconsidering the main factors like risk return, tax benefit and liquidity.


    Is ICICI Prudential return moving along with the market return?



    From the above chart we can say that 84% of the investors say return ofICICI Prudential return is not moving along with the market return. According tothem by investing in the stock market they can get the more return.

    While 16% say that ICICI Prudential return is moving along with themarket return. According to them they are not only concern about the return but theother benefits they are getting from the insurance.

    Generally from the above chart we can say that return from the any

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    insurance company is less than the market return as the main objective of theinsurance is to reduce the risk of the investor. In other words we can say thatinsurance gives many other benefits to the investors.


    Is ICICI Prudential returns more than other insurance companies?



    From the above chart we can see that 68% investors say that ICICIPrudential returns are more than other insurance companies. while on the other hand32% of the investors say that ICICI Prudential returns is less than the other insurancecompanies.

    By analyzing the data, at present ICICI Prudential is holding the 1stposition in the Private insurance sector. ICICI Prudential is considered after the LIC.So because of entry of the private companies into the insurance sector now LIC losingits market share day by day.


    Generally people more believe in the LIC.

    Investors believe LIC as one of the safest investment option.

    Investors have strong faith in banks and in post office schemes and governmentsecurity.

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    Investors expect high safety, handsome returns and the full guarantee of theirinvestment.

    By investing in the insurance sector people are generally moderately satisfied with the

    provided returns.

    Generally People are paying Rs. 15000 Rs per year as a premium.

    People also believe that returns of ICICI are more than other insurance companies.

    One of the important finding of the survey is that people expect ICICI Prudential tocome up with a plan with principal amount of Rs. 10,000/- . So that they can affordthe premium to be paid.


    There are some of the things that I feel during my training period that ICICIPrudential should improve.1. There should be the transparency when you are explaining to the customer aboutthe policy. Many persons are not explaining the truth or hide the thing which should

    be discussed.

    2. There are many other ways of marketing the products but according to my point ofview they are more concentrating on the telephonic talk. Every time persons aretalking on telephones.

    3. When there is a presentation they should serve the people and offer them a glass ofwater. So that the people who came they feel free.4. ICICI Prudential should give more advertise on the Television or through any othermedia.

    So above are the Important suggestions which I have observed during mytraining period.

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    BIBLIOGRAPHYBOOKSPathak Bharati V., Indian Financial Systema,Published by PearsonEducation(Singapore) Pte. Ltd., Indian Branch, 482 F.I.E. Patparganj, Delhi.Kothari C. R., Research Methodology, New Age international publishers,New Delhi,Second edition


    HYPERLINK "http://www.iciciprulife.com" www.iciciprulife.comHYPERLINK "http://www.irda.com" www.irda.comHYPERLINK "http://www.insuranceindia.com" www.insuranceindia.comHYPERLINK "http://www.assureindia.com" www.assureindia.com

    HYPERLINK "http://www.knowledgedigest.com" www.knowledgedigest.comHYPERLINK "http://www.icicionline.com" www.icicionline.comHYPERLINK "http://www.irdaindia.com" www.irdaindia.comHYPERLINK "http://www.bimaonline.com" www.bimaonline.comHYPERLINK "http://www.indiainfoline.com" www.indiainfoline.comHYPERLINK "http://www.moneycontrol.com" www.moneycontrol.comHYPERLINK "http://www.valueresearch.com" www.valueresearch.comHYPERLINK "http://www.indiatimes.com" www.indiatimes.com

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    Personal Details :

    Name :____________________________________________________Address :__________________________________________________

    __________________________________________________Phone number :_____________________________________________Education :________________________________________________Occupation : Corporate Employees ____________________

    Business men___________________________Age :_____________________________________________________Annual Income : Less than 100,000 ____________

    100,000 to 299,999 ____________300,000 to 499,999 ____________More than 500,000 ____________

    No. of Children :_____________________________________________No. of Dependence :__________________________________________Are you Investing?

    Yes ___________No_____________

    If Yes, Where are you investing the money?Bank Fixed deposit ______________

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    Stock Market ______________Post Office ______________Government Security _____________Mutual Fund _____________PPF _____________

    Others Like Gold, Land and building _____________Do you have any insurance cover?Yes______________No____________

    If Yes, of which Company?LIC & ICICI Prudential ______________ICICI & HDFC std. life ______________

    How much premium are you paying annually?Rs._______________

    Approximate How much return are getting on your Insurance cover fromICICI Prudential?4 to 6%____________ 6 to 8%________________

    8 to 10%___________ More than 10%__________7. According to you does the return on Insurance cover exceeds cost?Yes___________No___________

    What do you feel about return?Extremely Satisfied _____________Highly Satisfied _____________Moderately Satisfied _____________Satisfied _____________Not Satisfied ____________

    Which factor do you consider while investing in Life Insurance?Risk & Return _____________Risk & Tax benefit _____________Liquidity & Return _____________Tax benefit