icici prudential life insurance ltd
Post on 05-Apr-2018
240 Views
Preview:
TRANSCRIPT
-
8/2/2019 Icici Prudential Life Insurance Ltd.
1/53
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.
-
8/2/2019 Icici Prudential Life Insurance Ltd.
2/53
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
2
-
8/2/2019 Icici Prudential Life Insurance Ltd.
3/53
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
3
-
8/2/2019 Icici Prudential Life Insurance Ltd.
4/53
S NO. Contents Page No.
1. ACKNOWLEDGEMENT 1
2. EXECUTIVE SUMMARY 2
3. HISTORY OF INDIAN INSURANCE INDUSTRY 4
4. MARKETING OF INSURANCE PRODUCTS 18
5. COMPANY PROFILE 23
6. RESEARCH METHODOLOGY 34
7. ANALYSIS 36
8. CONCLUSION 45
9. SUGGESTIONS 46
10. LIMITATIONS 47
11. APPENDICS 48
HISTORY OF INDIAN INSURANCE INDUSTRY
4
-
8/2/2019 Icici Prudential Life Insurance Ltd.
5/53
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
5
-
8/2/2019 Icici Prudential Life Insurance Ltd.
6/53
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
6
-
8/2/2019 Icici Prudential Life Insurance Ltd.
7/53
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.
7
-
8/2/2019 Icici Prudential Life Insurance Ltd.
8/53
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.
8
-
8/2/2019 Icici Prudential Life Insurance Ltd.
9/53
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.
9
-
8/2/2019 Icici Prudential Life Insurance Ltd.
10/53
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.
10
-
8/2/2019 Icici Prudential Life Insurance Ltd.
11/53
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.
11
-
8/2/2019 Icici Prudential Life Insurance Ltd.
12/53
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 costs-
such 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
12
-
8/2/2019 Icici Prudential Life Insurance Ltd.
13/53
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 face-
to-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
13
-
8/2/2019 Icici Prudential Life Insurance Ltd.
14/53
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
-
8/2/2019 Icici Prudential Life Insurance Ltd.
15/53
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 co-
operation.
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
15
-
8/2/2019 Icici Prudential Life Insurance Ltd.
16/53
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
16
-
8/2/2019 Icici Prudential Life Insurance Ltd.
17/53
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
17
-
8/2/2019 Icici Prudential Life Insurance Ltd.
18/53
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.
18
-
8/2/2019 Icici Prudential Life Insurance Ltd.
19/53
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
-
8/2/2019 Icici Prudential Life Insurance Ltd.
20/53
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
20
-
8/2/2019 Icici Prudential Life Insurance Ltd.
21/53
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
21
-
8/2/2019 Icici Prudential Life Insurance Ltd.
22/53
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
22
-
8/2/2019 Icici Prudential Life Insurance Ltd.
23/53
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.
23
-
8/2/2019 Icici Prudential Life Insurance Ltd.
24/53
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 world-
class people and service.
This we hope to achieve by:
24
-
8/2/2019 Icici Prudential Life Insurance Ltd.
25/53
Understanding the needs ofcustomers and offering them superior products and
service
Leveraging technology to service customers quickly, efficiently and conveniently
Developing and implementing superiorrisk management and investment
strategies to offer sustainable and stable returns to our policyholders
Providing an enabling environment to foster growth and learning for ouremployees
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
25
-
8/2/2019 Icici Prudential Life Insurance Ltd.
26/53
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
26
-
8/2/2019 Icici Prudential Life Insurance Ltd.
27/53
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.
27
http://www.iciciprulife.com/http://www.iciciprulife.com/ -
8/2/2019 Icici Prudential Life Insurance Ltd.
28/53
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.
CashBakis an anticipated endowment policy ideal for meeting milestone expenses
like a childs marriage, expenses for a childs higher education or purchase of an
asset.
28
-
8/2/2019 Icici Prudential Life Insurance Ltd.
29/53
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.
29
-
8/2/2019 Icici Prudential Life Insurance Ltd.
30/53
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.
30
-
8/2/2019 Icici Prudential Life Insurance Ltd.
31/53
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
31
-
8/2/2019 Icici Prudential Life Insurance Ltd.
32/53
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.
32
-
8/2/2019 Icici Prudential Life Insurance Ltd.
33/53
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.
33
-
8/2/2019 Icici Prudential Life Insurance Ltd.
34/53
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 multi-
channel 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.
34
http://www.icicibank.com/http://www.icicibank.com/ -
8/2/2019 Icici Prudential Life Insurance Ltd.
35/53
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
35
-
8/2/2019 Icici Prudential Life Insurance Ltd.
36/53
-
8/2/2019 Icici Prudential Life Insurance Ltd.
37/53
ANALYSIS OF SURVEY
Companies Visited:
S. No. Company No. of people
contacted
Address
1 Amway India 2 Okhla Phase-II
2 Beehive Systems 2 Sector-1, Noida
3 Cidex Trade Fair 3 Sarita Vihar
4 CSC 9 Sector-59, Noida
5 Delhi Toyota 5 Mohan Cooperatives6 Escotel 3 Mohan Cooperatives
7 EXL 5 Sector-58, Noida
8 HCL BPO 10 Sector-58, Noida
9 Hollostic India Ltd. 2 Sector-58, Noida
10 Idea Cellular 5 Mohan Cooperatives
11 Intersolutions 4 Sector-58, Noida
12 Microland Systems 4 Sector-58, Noida
13 NeoMagic Semiconductor 3 Sector-1, Noida
14 NIIT 13 Mohan Cooperatives
15 Olive E-Solutions 4 Mohan Cooperatives
16 Patni Computers 1 Sector-59, Noida17 Philips India 12 Mohan Cooperatives
18 R Systems 8 Sector-59, Noida
19 Samtech Infonet 2 Mohan Cooperatives
20 Schneider Electric 3 Mohan Cooperatives
21 Singer 3 Mohan Cooperatives
22 Solution Inc. 7 Mohan Cooperatives
23 Tele Atlas 6 Sector-1, Noida
24 V Customers 10 Mohan Cooperatives
25 Xansa BPO 17 Sector-1, Noida
40 other Companies including CA, Self employed etc.
37
-
8/2/2019 Icici Prudential Life Insurance Ltd.
38/53
38
-
8/2/2019 Icici Prudential Life Insurance Ltd.
39/53
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 10000-20000 20000-40000 >40000
14 41 76 64
5 people didnt disclosed their family income.
0
20
40
60
80
40000
Series1
39
-
8/2/2019 Icici Prudential Life Insurance Ltd.
40/53
Annual Investment Level(Rs.):
50000
35 59 42 60
5 people didnt disclosed their Investment level.
0
10
20
3040
50
60
50000
Series1
Factors of Investment:
S. No. Ist Priority No. of People Favoring
1 Tax Benefits 68
2 Liquidity 15
3 Safety 52
4 Returns 59
6 people Didnt Disclosed
40
-
8/2/2019 Icici Prudential Life Insurance Ltd.
41/53
No. of People Favoring
020
40
60
80
Tax
Benefits
Liquidity Safety Returns
1 2 3 4
No. of People
Favoring
Influencer:
S. No. Influencer No. of People
1 Self/Spouse 118
2 Parents 49
3 Intermediateries 17
4 Friends 15
41
-
8/2/2019 Icici Prudential Life Insurance Ltd.
42/53
1 Didnt Disclosed
S. No. Influencer
1 Self/Spouse
2 Parents
3 Intermediateries
4 Friends
Analysis of Income Level with Investment Level:
Investment
Income
50000
< 10000 8 5 1 -
10000-20000 11 21 4 5
20000-40000 11 20 24 20
> 40000 4 13 12 30
42
-
8/2/2019 Icici Prudential Life Insurance Ltd.
43/53
11 people Didnt Disclose
05
101520253035
8 5 1 -
50000
10000-20000
20000-40000
> 40000
Analysis of Time Horizon for Investment with Investment tools:
Priority
Years
Equity PPF/NSC FD Bonds Mutual
Funds
Life
Insurance
< 1 yrs 4 13 15 3 3 19
1-3 yrs 17 46 28 17 8 62
3-10 yrs 6 33 18 17 6 37
>10 yrs 3 16 7 3 4 26
020406080
100120140160
Equit
y
PPF/NS
C FD
Bond
s
MutualF
unds
LifeIn
suranc
e
>10 yrs
3-10 yrs1-3 yrs
< 1 yrs
Years
43
-
8/2/2019 Icici Prudential Life Insurance Ltd.
44/53
Preference For Life Insurance as an Investment:
S. No. Investment Option No. of People
1 Tax Savings 76
2 Family Security 93
3 Unforeseen Expense 11
4 Saving for old age 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. No. of Years No. of people
1 < 3 53
2 3-5 67
3 5-10 33
4 > 10 39
8 people didnt disclose
44
-
8/2/2019 Icici Prudential Life Insurance Ltd.
45/53
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.
45
-
8/2/2019 Icici Prudential Life Insurance Ltd.
46/53
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
-
8/2/2019 Icici Prudential Life Insurance Ltd.
47/53
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.
47
-
8/2/2019 Icici Prudential Life Insurance Ltd.
48/53
Rural areas could not to touched during the study, which have huge potential for
life Insurance exists.
48
-
8/2/2019 Icici Prudential Life Insurance Ltd.
49/53
QUESTIONNAIRE
NAME: ----------------------------------- COMPANY:-----------------------
AGE:------------------ MOBILE:------------------TEL:-----------------
MONTHLY FAMILY INCOME (Tick the appropriate one)
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
-
8/2/2019 Icici Prudential Life Insurance Ltd.
50/53
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)
10 years
4. How much money do you invest annually? (Tick the appropriate one)
Rs. 50000
50
-
8/2/2019 Icici Prudential Life Insurance Ltd.
51/53
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. Haveyou 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)
51
-
8/2/2019 Icici Prudential Life Insurance Ltd.
52/53
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)
52
-
8/2/2019 Icici Prudential Life Insurance Ltd.
53/53
100%
75%
50%
top related