feasibility of-insurance-plans-icici-prudential

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  • 1. _____________________________________________________Project ReportTitleSTUDY THE FEASIBILITY OF ULIP PLANSSubmitted to: Submitted by:Prof. Mona Sahay Neera AhujaPGDM 2006-08Institute of Technology and ScienceGhaziabad1

2. _____________________________________________________AcknowledgementI owe my sincere & heartiest gratitude to Mr.Kapil Bhateja (FSC, ICICI Prudential LifeInsurance Company, Mr.Deep Sharma RSM) who gave me the opportunity to work inICICI Prudential Life Insurance Company as a summer trainee & helped with whenever Ineeded him.The entire project from the very idea of it to reality would not have been possible withoutthe guidance and support of many people.I would therefore like to take the goldenopportunity of expressing my sincere and profound gratitude to all those people whohelped me throughout the project .Finally, I would like to extend my sincere thanks to the employees of ICICI prudentialKanpur during the training period for their kind cooperation.2 3. _____________________________________________________CONTENTSIntroduction1. History Of insurance2. Liberalization of the Insurance SectorIndustry Overview1. What is Insurance?2. Reason for Insurance3. Importance for Insurance4. Advantages of Life InsuranceOverview of Indian Insurance MarketCompany Profile1. ICICI Prudential Life Insurance Pvt. Ltd.2. Sponsors3. Prudential Plc.4. Bank Assurance5. Technology6. Aim of the companyProblem of Study for Comparative AnalysisResearch Methodology & LimitationsInsurance ProductsProduct PlanQuestionnaireChart FindingsRegulations- The Agency LawsInsurance Regulatory & Development AuthorityResearch Objective, Methodology & FindingsSWOTMarket Share Chart & GraphRecommendationsConclusionBibliography3 4. _____________________________________________________Executive SummaryThe beginning of the project starts with: -Chapter# 1 tells about the history of insurance, what is insurance, what are the reasonsbecause of which a person should opt for insurance & the importance of insurance inhuman life. Insurance does not only provide life coverage but also other benefits like taxrelief, payment on maturity which can be further be utilized either for the education ofchildren, insurers old age or even for paying off debts.It also discusses the post-liberalization era & the opportunities & threats before theinsurance sector. The problem of the study as to why it ahs been taken up by theresearcher & the objective of the research have been discussed.Chapter# 2 deals with the research methodology followed by the researcher during theproject. It tells about the locale of the study & the sample size taken. It also mentions thesources of data collectionChapter# 3 deals with analysis of the survey.Chapter# 4 mentions the conclusion of the project & recommendation thereafter.4 5. _____________________________________________________IntroductionHistory of InsuranceHistorians believe that insurance first developed in Sumer & Babylonia. The merchants& traders of these societies transferred & pooled their money to protect themselves frompirates.In the 18thcentury BC, Babylonian king, Hammurabi developed a code of law known asthe code of specific rules governing the practices of early risk-sharing activities.Insurance developed during the 1700s in the North American colonies. In 1730,Benjamin Frank contributed for the Insurance of Houses from Loss by Fire. The companycollected contributions & this money went into an investment fund. Interest on this fundwent towards paying claims dividends to those who contributed money.The Industrial Revolution in the US, in the early & mid 1800s prompted dramatic group.During this time, many companies were establishes to sell life insurance policies &annuities. Several shared profits among policy holders, also developed. In addition, somelife insurance companies charged premiums according to age of people & health.Life insurance, in its present form, came to India from the United Kingdom with theestablishment of a British firm, Oriental Life Insurance Company in Calcutta in 1818,followed by Bombay Life Insurance Assurance Company in 1823, the Madras EquitableLife Insurance Society in 1829, & the Oriental Government Security Life AssuranceCompany in 1874. Prior to 1871, Indian lives were treated as sub-standard & chargedextra premium of 15% to 20%. Bombay Mutual Life Assurance Society, an Indianinsurer which came into existence in 1871, was the first to cover Indian lives at normalrates.5 6. _____________________________________________________The Indian Life Assurance Companies Act, 1912 was the first statutory measure toregulate life insurance business. Later in 1928, the Indian Insurance Companies Act wasenacted, to enable the govt. to collect statistical information about both life & non-lifeinsurance business transacted in India by Indian & foreign insurers, including theprovident insurance society. Comprehensive arrangements were, however, brought intoeffect with the enactment of the Insurance Act, 1938. Efforts in this direction continuedprogressively & the Act was amended in1950, making far reaching changes, such asrequirement of equity capital for companies carrying on life insurance business, strictercontrols on investment of life insurance companies, ceiling on the expenses ofmanagement & agency commission etc.By 1956, 154 insurers, 16 non-Indian insurers & 75 provident societies were carrying onlife insurance business in India. On 19thJanuary 1956, the management of the entire lifeinsurance business of 229 Indian insurers & provident insurance societies & the Indianlife insurance business of 16 non-Indian life insurance companies then operating in India,was taken over by the central govt. & then nationalized on 1stSeptember 1956 when LifeInsurance Corporation came into existence.An ordinance was passed in 1968 to amend the Insurance Act to regulate/control non-lifeinsurance resulting in set up of GIC in 1973. Malhotra committee submitted its report in1994 & recommended means to reintroduce an element of competition by withdrawingthe exclusivity of LIC & GIC. In 1997, Insurance Regulatory Authority (IRA) wasestablished which was later re-styled as IRDA in 1999.6 7. _____________________________________________________Liberalization of the Insurance SectorLiberalization commitments of the country to help in disciplining future economicpolicies will include the insurance reforms. When the world over, insurance, marketshave been opened up, India cannot remain in isolation. Globalization is the neweconomic reality, which is here to stay, heralding a new era of insurance in India. Withthe opening of the insurance industry, India stands to gain the following majoradvantages:1. Globalization will provide improved opportunities to the customers for betterproducts, with more reasonable & affordable pricing.2. The customer will get quicker servicing.3. It will enhance the savings rate.4. Long term funds for infrastructure development will be available to the country.5. It will secure for India larger inflows of foreign capital needed to sustain our GDPgrowth.What is Insurance?Insurance is a legal contract that protects people from the financial costs those resultsfrom loss of life, loss of health, lawsuits, or property damage. Insurance provides a meansfor individuals & society to cope up with some of the risks faced in every day life byevery body. People purchase contracts of insurance, called a Policy, from variousinsurance companies.Almost every person existing in this world is associated with insurance, directly orindirectly. Directly, in the sense that he/she has insured his/her life by some kind of7 8. _____________________________________________________insurance policy from any company. Indirectly, in the sense they must have insured theassets of their own for example their house, car, or any thing else.Insurance can be divided into three categories.1. Life Insurance2. General Insurance3. Health Insurance.Life insurance is a contract for payment of a sum of money to the person assured (orfailing him/her, to the person entitled to receive the same) on the happening of the eventinsured against. Usually the contract provides for the payment of an amount on the dateof maturity or at specified intervals or at unfortunate death. The contract also provides forpayment of premium periodically to the corporation by the assured.General insurance includes many areas of insurance like marine, motor, engineering,health, fire, etc. The contract provides for the payment of an amount on the happening ofsome contingency. These types of contracts are annual in nature.Reason for insuranceIn life, losses are sometimes unavoidable. People may fall seriously sick or lose incomeor savings to pay off medical bills. Individuals or their relatives may come acrossuntimely death, whatsoever the reason may be. The assets of people may get damageddue to some heavenly act or by some nuisance creator.No one knows in advance when a loss will occur or how serious that loss will be. Theuncertainty surrounding potential losses is known as Risk. Insurance offers a way forpeople to replace risk with known costs- the costs of buying & maintaining insurancepolicies.8 9. _____________________________________________________Insurance pools risks shared by many people, thereby, reducing the risks faced by agroup. People pay to buy insurance coverage (protection from risk). In exchange, allpolicy holders (people who own insurance policies) receive a promise that the group ofpolicy holders as represented by the insurance organization will pay when any policyholder experience any kind of loss.Importance of InsuranceInsurance benefits society by allowing individuals to share the risks faced by manypeople. But it also serves many other important econo

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