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 economic & societal functions. Insuranceprovides the capital that communities need to quickly rebuild & recover economicallyfrom natural disasters. Insurance itself has become a significant economic force in mostof the industrialized countries. Businessmen buy insurance to cover their employeesagainst work related injuries & health problems. They also insure their assets against anykind of wear n tear by natural forces & forcibly.Insurance companies perform a type of monetary redistribution- they collect premiums &eventually redistribute that money as payments. Depending on the type of insurance,redistribution can take place anywhere from a month to many decades. Because of thisdelay between collecting & paying out funds, insurance companies invest their funds tobring extra revenue. Such investments help business & government finance theiroperations, & few profits from these investments support the operations of insurancecompanies. With these investment earnings, insurance companies can keep rates muchlower than would otherwise be possible.9 10. _____________________________________________________Advantages of Life Insurance1. It is superior to an ordinary saving plan: Unlike other saving plans, it affordsfull protection against risk of death. In case of death, the full sum assured is madeavailable under a life assurance policy; whereas under saving scheme the totalaccumulated saving alone will be available. The later will be considerably lessthan the sum assured, if death occurs during early years.2. Easy settlement & protection against creditors: The life assured can nameperson(s) called Nominee to whom the policy money would be payable in the eventof his death. The proceeds of a life policy can be protected against the claim of thecreditors of the life assured by effecting a valid assignment of the policy.3. Ready marketability & suitability for quick borrowing: After an initial period,if the policy holder finds him unable to continue payment of premiums, he cansurrender the policy for a cash sum. Alternatively, ha can tide over a temporarydifficulty by taking loan on the sole security of the policy without delay. Further, alife insurance policy is sometimes acceptable as security for a commercial loan.4. Tax Relief: The Indian Income-Tax Act allows deduction of certain portion of thetaxable income which is diverted to payment of life insurance premiums from thetotal income tax liability. When this tax relief is taken into account, it will be foundthat the assured is in effect paying a lower premium for his insurance.10 11. _____________________________________________________OVERVIEW OF THE INDIAN INSURANCEMARKETThe insurance landscape in India is undergoing a tectonic shift. Despite its more thanteeming one billion populations, India still has a low insurance penetration of 1.95percent, 51stin the world. Although India boasts a saving rate of around 25 percent,less than 5 percent is spent on insurance.With the entry of competition, the rules of the game have begun to change. The market isalready beginning to witness a wide array of products from players whose number is setto grow. In such a scenario, the differentiators among the different players s products,pricing & service. What really increases the appeal of insurance is the benefit ofprotection of lives & assets from insurance products.Only 22% of the insurable population possesses life insurance. Whats more, in acountry over billion people, life insurance premium forms only 1.8% of GDP indicate theextent of underinsurance. Recognizing the huge potential of the market & the need tomake insurance, particularly the life insurance, available on a wider scale, thegovernment opened the industry to private players in 1999 and was flooded withapplications. Major international insures- Prudential & Standard life of UK, Sun Life ofUK, Sun life of Canada & AIG, MetLife & New York Life of the US, to name a few-tiedup with leading companies of India to reach out this vast market.11 12. _____________________________________________________Today, the Indian Insurance industry has a dozen of private players, each of which aremaking strides in raising awareness level, introducing innovative products & increasingthe penetration of life insurance in the vastly underinsured country. The success of effortis noteworthy private insurers captured nearly 9 percent of new business premiumincome in two years of operations.The biggest beneficiary of the competition amongst the life insurers is the consumer. Awide range of products, customer focused service & professional advice has become themainstay in the industry. It is seen a dramatic increase in customer awareness, withpenetration cutting across the socio-economic class & attracting people who have neverpurchased insurance before. With the heightened awareness comes a willingness toevaluate life insurance as an integral part of financial planning kit a significant change nearlier attitude, where insurance is purchased as a tax saving pool.Not only has there been shift in the perception of life insurance, but also the way its sold.From being a purely advisors driven business, the sector has seen the emergence ofa number of channels, including bank assurance, corporate agents & directmarketing. These channels though very new, are quickly gaining importancebecause they present customers multiple ways of approaching life insurers.There is also a huge improvement in service attitude & delivery making a customer afocus of each initiative. Technology has come to aid giving the platform, the reach & theability to service each customer seamlessly. Multiple touch points have emerged contact centers, email, facsimile, websites, snail-mails etc.12 13. _____________________________________________________13 14. _____________________________________________________Company ProfileICICI Prudential Life Insurance Company LimitedICICI 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%) and Prudential plc UK(26%).The Company was granted Certificate of Registration for carrying out Life Insurancebusiness, by the Insurance Regulatory and Development Authority on November 24,2000. It commenced commercial operations on December 19, 2000, becoming one of thefirst few private sector players to enter the liberalized arena.The Company is now operational in Agra, Ahmedabad, Ajmer, Allahabad, Amritsar,Aurangabad, Bangalore, Bhatinda, Bhopal, Bhubaneswar, Chandigarh, Chennai,Coimbatore, Dehradun, Goa, Guntur, Gurgaon,Greater Noida, Hyderabad, Hubli, Indore,Jaipur, Jalandhar, Jamnagar, Jamshedpur, Jodhpur, Kanpur, Karnal, Kochi, Kolakata,Kota, Kottayam, Lucknow, Ludhiana, Madurai, Mangalore, Meerut, Mumbai, Nagpur,Nasik, Noida, New Delhi, Patiala, Pune, Rajkot, Ranchi, Surat, Thane, Thrissur, Trichy,Trivandrum, Vadodara, Vashi, Vijaywada.14 15. _____________________________________________________Till March 31,2002 the Company has issued 100,000 polices translating into a PremiumIncome of around Rs. 1,200 Million and a sum assured of over Rs.15,000 Million.The Company recognizes that the driving force for gaining sustainable competitiveadvantage in this business is superior customer experience and investment behind thebrand. The Company aims to achieve this by striving to provide world-class servicelevels through constant innovation in products, distribution channels and technology-based delivery. The Company has already taken significant steps to achieve this goal.SponsorsICICI Ltd was established in 1955 by the World Bank, the Government of India and theIndian Industry, to promote industrial development of India by providing project andcorporate finance to Indian industry.Since inception, ICICI has grown from a development bank to a financial conglomerateand has become one of the largest public financial institutions in India. ICICI hasfinanced all major sectors of the economy, covering 6,848 companies and 16,851projects. In the fiscal year 2000-2001, ICICI had disbursed a total of Rs 319.65 billion.ICICI has now developed a whole range of activities to become a Universal Bank. Someof ICICI spectrum of activities includes:15 16. _____________________________________________________ Commercial Banking - ICICI Bank, Indias first internet bank. Information Technology - ICICI InfoTech, transaction processing, softwaredevelopment Investment Banking - ICICI Securities, one of the key players in the IndianCapital Markets Mutual Fund - Prudential ICICI AMC, leading private sector mutual fund playerin India Venture Capital - ICICI Venture, leading private equity investor with focus on ITand HealthCare Retail Services - ICICI PFS, Marketing and Distribution of Retail Asset Products Distribution - ICICI Capital, Distribution and Servicing of Retail LiabilityProductsICICI is listed on the Indian Stock Exchanges and on the New York Stock Exchange(NYSE). On September 22, 1999, it became the first Indian company to be listed onthe NYSE (symbol: IC and IC.D). The listing of ICICI BANK has followed this onNYSE (symbol: IBN) on March 28, 2000.Prudential Plc:Prudential Plc was founded in 1848. Since then it has grown to become one of the largestproviders of a wide range of savings products for the individual including life insurance,pensions, annuities, unit trusts and personal banking. It has a presence in over 15countries, and caters to the financial needs of over 10 million customers.16 17. _____________________________________________________It manages assets of over US$ 259 billion (Rupees 11, 39,600 crore approx.) as ofDecember 31, 1999. Prudential plc has had its presence in Asia for the past 75 yearscatering to over 1 million customers across 11 Asian countries. Prudential is the largestlife insurance company in the United Kingdom. Asia has always been an importantregion for Prudential and it has had a presence in Asia for over 75 years. In factPrudentials first overseas operation was in India, way back in 1923 to establish Life andGeneral Branch agencies.In the US, Prudential owns Jackson National Life, one of the leading life insurancecompanies. Prudential controls approximately 4% of all the listed shares on the secondlargest stock exchange in the world, the London Stock Exchange, making it one of thelargest institutional investors in the UK. Prudential is focused on the Internet generationand is one of the first financial service organizations to use the Internet on a fullyintegrated basis.In October 1998, Prudential launched a "branchless" bank based on the internet.Unusually titled as " egg:|". The bank has in a short span of its existence become aleading banking service provider in the UK. Infect in the first six months of its existenceit garnered over 5 billion (US$ 8 billion) in deposits from over 500,000 customers.Development of superior products and services that offer value for money and securitywhile producing superior financial returns enables Prudential to maximize the value of itsshareholders investment and to establish lasting relationships with customers and policyholders.17 18. _____________________________________________________ICICI and Prudential came together in 1993 to provide mutual fund products in India andtoday are the largest private sector mutual fund company in India. The two companiesbring together two of the strongest financial service brands in Asia known for theirprofessionalism, excellent quality of service and long term commitment.Bank AssuranceThe company has twelve bank assurance tie-ups, having agreements with ICICI Bank,Allahabad Bank, Federal Bank, South Indian Bank, Bank Of India, Lord Krishna Bank,& Punjab & Maharashtra Co-Operative Bank, Goa State Co-Operative Bank, IndoorParaspar Sahakari Bank, Manipal State Co-Operative Bank, Shamrao Vithal Co-Operative Bank & Jalgaon Peoples Co-Operative Bank as well as some corporate agents.It has also tied up with organizations like Dhan for distribution of Salaam Zindagi, apolicy for the socially & economically underprivileged sections of society.TechnologyThe company continuously leverages on the state of art technology that it posses. Themodern & updated technology infrastructure helps not only to provide superior quality ofproducts & services to the customers but at the same time helps in creating a prudentreward & recognition program for the company itself. The company can leverage on thisadvantage to drive out one of the best CRM industry at the present. The parent companyalso is in a move to duplicate the ICICI model in other world market. It is nothing but aresult of the superb all-round performance that the company has shown in all the facets ofbusiness & over the period of time. But one important has been the continued focus ongrowth & the strife for results from the workforce itself.18 19. _____________________________________________________Aim of the CompanyTheir vision is to make ICICI Prudential Life Insurance Company the dominant newinsurer in the life insurance industry. This they hope to achieve through theircommitment to excellence, focus on service, speed and innovation, and leveraging ourtechnological expertise.The success of the organization will be founded on its strong focus on values and clarityof purpose. These include: Understanding the needs of customers and offering them superior products andservice Leveraging technology to serve customers quickly, efficiently, & conveniently. Developing & implementing superior risk management & investment strategies tooffer sustainable & stable returns to the policy holders. Building long lasting relationships with their partners Providing an enabling environment to foster growth and learning for theiremployeesThey believe that they can play a significant role in redefining and reshaping the sector.Given the quality of their parentage and the commitment of their team, they feel thatthere will be no limits to their growth. The success of the company lies in its unflinching19 20. _____________________________________________________commitment to five core values: - Integrity, Customers first, Boundary less,Ownership, & Passion.Problem of StudySince privatization of insurance sector in India is a new concept for insurance marketin India hence people are not much aware of the products being offered by these newprivate players. Moreover, after studying the insurance scenario in India & keepingthe needs of the customers in mind the companies are introducing new products. Thecustomers is finding difficulty in comparing these products & choosing the right onefor himself since each product is unique in itself but the deciding factor is still themonetary investment.Based on current market trends the researcher finds that not much has been done inthis regard so I have decided to analyze the various products being offered by theinsurance companies. And the general publics perceptions & knowledge about theseinsurance companies.Objectives of the StudyBased on the problem of the study the following objectives have been outlined:1. To find out the various life insurance products being offered by ICICIprudential.2. To find out the annual premium collected under each plan.20 21. _____________________________________________________3. To find out the most profit making products under each plan.4. General Perception of the insurance companies.Research MethodologyThis chapter deals with the research methodology adopted by the researcher. Theresearcher has conducted the study using both the primary & secondary data.The researcher started the research work with the help of secondary data from variousbooks & magazines. When the researcher collected a fair amount of idea about the typeof study that has been conducted & how he should go with it. Then he moved on to theprimary sources of data collection.The main source here were the interviews scheduled comprising of structured & semi-structured questions. When the interview schedule was administered some unstructuredquestions were asked & noted down.The researcher went in for purposive & convenient sampling. The universe of the study isIndia & the locale of the study being Delhi. The sample size was chosen on the basis ofinsurance companies operating in Delhi.Limitation1. Time constraint2. Knowledge constraint3. Reluctance of respondents to provide information21 22. _____________________________________________________Research methodologySample frame The area for the study was preferably Kanpur . The respondents were mostly in the age group of 25-60 years, as these werethe people who are the target for the companys products as well as companysaim of increasing & developing its channel network. The respondents were from all walks of life that included services, business &even housewives. The respondents were like MBAs, businessmen, self-employed, CAs, Advocates & other professionals. The sample size was very much limited to the area of study. About 300 peoplewere contacted & roughly 50 were present for one to one interaction.Methodology AdoptedAs for the prospecting of the respondents is concerned, random sampling from theexisting database & telecalling was used extensively. Next step involved was of suspecting which was initiated by getting theappointments & having a personal interaction. The sales pitch was provided with the help of business opportunity presentation &also with the discussion & interviews conducted The last step was getting the questionnaire & the application form filled up withthe required payment, training undertaken & depositing the form with DOPS.22 23. _____________________________________________________The Research Findings Most of the people contacted were aware of the company but were very muchunaware of the companys product & their comparative advantages over thecompetition in the market. Being an insurance advisor is seen as an additional source of income & not afull time employment by most of the people, least a career. There were respondents who were existing advisors of other companies butwere interested in getting their family members registered as the companysadvisor The target population for the study was mostly the self-employed segment sothe urge to earn more money sitting at home was very much evident The biggest hurdle in getting the process completed was the obligation toundergo 100 hours of training. Most of the people were very reluctant inundergoing training which was time consuming & disturbing to their primarywork Even the option of online training was not that impressive to them due to lackof computer knowledge Further, the next problem that was evident was the prescribed fee of Rs. 1,000was at times too much for the people specially for those who come in thelower middle class but who do possess a good social network & could be aviable option for the company As regard the perception of the company is concerned the most outstandingfactor that stood out was the inability, on the respondents side, to differentiatebetween the ICICI Prudential & the LIC. Moreover the policies of the LICwere also casting their effect on the benefits being spelt out to the prospect.23 24. _____________________________________________________ Another important factor for the company was that all the respondents wereaware of the ICICI brand name & hence the companys name & itsinternational linkage is likely to pay off in the coming period of time24 25. _____________________________________________________Insurance ProductsInsurance Solutions for IndividualsICICI Prudential Life Insurance offers a range of innovative, customer-centric productsthat meet the needs of customers at every life stage. Its 13 products can be enhanced withup to 4 riders, to create a customized solution for each policyholder.Savings Solutions Save n Protect is a traditional endowment savingsplan that offers life protection along with adequate returns. SecurePlus is a transparent & featured-packedsavings plan that offers 3 levels of protection. CashPlus is a transparent, featured-packed savingsplan that offers 3 levels of protection as well as liquidity option. CashBak is an anticipated endowment policy Ideal formeeting milestone expenses like a childs marriage, expenses for a childs highereducation or purchase of an asset.Protection Solutions LifeGuard is a protection plan, which offers lifecover at very low cost. It is available in 3 options - level term assurance, levelterm assurance with return of premium and single premium.25 26. _____________________________________________________Child Solutions SmartKid provides guaranteed educational benefits toa 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.Market-linked Solutions LifeLink is a single premium Market Linked InsurancePlan, which combines life insurance cover with the opportunity to stay, invested in thestock market. LifeTime offers customers the flexibility and control tocustomize the policy to meet the changing needs at different life stages. It offers 3investment options - Growth Plan, Income Plan and Balanced Plan.Market-linked retirement products LifeTime Pension is a regular premium market-linkedpension plan LifeLink Pension is a single premium market-linkedpension plan.Flexible Rider OptionsICICI Pru Life offers flexible riders, which can be added to the basic policy at a marginalcost, depending on the specific needs of the customer.26 27. _____________________________________________________ Accident & disability benefit: If death occurs as theresult of an accident during the term of the policy, the beneficiary receives an additionalamount equal to the sum assured under the policy. Accident benefit: This rider option pays the sum assuredunder the rider on death due to accident. Critical Illness benefit: Protects the insured againstfinancial loss in the event of specified critical illness. Benefits are payable to the insuredfor medical expenses prior to death. Major Surgical Assistance benefit: Provides financialsupport in the event of medical emergencies, ensuring that benefits are payable to the lifeassured for medical expenses incurred for surgical procedures. Cover is offered against43 different surgical procedures. Income benefit: This rider pays the 10% of the sumassured to the nominee every year, till maturity, in the event of the death of the lifeassured. It is available on SmartKid, SecurePlus & CashPlus27 28. _____________________________________________________ Waiver of Premium: In case of total & permanentdisability due to an accident, the premiums are waived till maturity. This rider is availablewith SecurePlus & CashPlus.28 29. _____________________________________________________Hospital careLife is all about being prepared. Be it your job, finances, family or future.Being prepared is the key to be in control of your life .that is why it isimportant to plan ahead for emergency, medical cost, so that you stayprepared for any eventuality. Hospital care offers a cashlesshospitalization facility, clear coverage norms, fixed benefit payouts andeven a recuperating allowance. So, you are aware of what you get underthis policy which in turn will help you plan your treatment better. Andsince the cost of your treatment is taken care of, you can look forward tothe most important aspect fast recovery.Key benefits of hospital careA. Facility of cashless hospitalization in more than 3000 networkhospitalB. Benefit amount will be paid in addition to payment received youfrom other medical insurance plans.C. You will received lump sum benefit amount irrespective of theactual billingD. Long term guaranteed coverage up to 20 yearsE. Tax benefits on premium paid upto RS 50000 under section 80DCoverage under the policya) Daily hospitalization cash benefits (DHCB)1. Get a benefit amount if you are hospitalized formore than 24 hours i.e. At least 2 consequentivenights and must be charged for 2 days roomexpenses2. the benefit amount is fixed and will be paidirrespective of actual hospitalization expenses3. DHCB is payable for hospitalization up to 90 daysper policy year, which includes any days spent inintensive care unit29 30. _____________________________________________________LIFE TIME SUPERLIFE TIME SUPER is the unit linked insurance policy that offers benefit of lifeinsurance cover along with flexible investment options.KEY BENEFITS OF LIFE TIME SUPERa) Potentially higher returns over the long term by investing in a unit linked fundsb) Additional allocation of units at regular intervals to boost your investmentc) Option to withdraw your money systematically over a period of 5 years onmaturity of the policyd) In case of an unfortunate event or death your family will receive sum assured orfund value whichever is highere) Cover continuance option available which ensures continuance of the lifeinsurance cover , even if you wish to take a break in premium paymentf) Tax benefits on premium paid and benefits received under the policy as per theprevailing income tax lawsswitching optionUnder this option you can switch our investments between the funds atany time depending on your financial priorities and investment objective.In any policy year, 4 switches can be done free of charge. The minimumswitch amount is RS 2000. Additional allocation of unitsThere will be an additional allocation of units every 4thyear starting from the end of the4thyear at the rate of 4%of annual premium into your investment fund .additionalallocation of units will be made only if the premiums have been paid regularly up to thedate of allocation Partial withdrawal benefitPartial withdrawals will be allowed after completition of 3 policy years and on thepayment of full 3 years premium. The minimum partial withdrawal amount is RS200030 31. _____________________________________________________ Maturity benefitOn maturity of this policy you will be entitled to receive the fund value at the time ofmaturity .alternatively you can opt for settlement options available Settlement optionsOn the maturity of the policy, you can choose to take the fund value as a structuredbenefit. with this facility you can opt to get payments on a yearly, half-yearly , quarterlyor monthly basis for the period of 1,2,3,4,or 5 years post maturity . At any time duringthe settlement period you have the option to withdraw the remaining fund value. Duringthe settlement period the investment risk in the investment portfolio is borne by thepolicy holderLIFE TIME PLUSLIFE TIME PLUS is a regular premium unit linked insurance policy that offers thebenefit of life insurance cover along with flexible investment options . Thus you enjoypotentially higher returns without compromising on the security of your familyKEY BENEFITS OF LIFE TIME PLUS This policy offers you the protection of sum assured and fund in case of an unfortunate event of death Potentially higher returns over the long term by investing in market linked funds Additional allocation of units at regular intervals to enhance your investment Option to withdraw your money systematically over a period of 5 years onmaturity of the policy Cover continuance option available which ensures continuance of life insurancecover even if you take a break in premium payment Tax benefits on premium paid and benefits received under this policy as per theprevailing income tax laws31 32. _____________________________________________________SMART KIDSMART KID NEW UNIT LINKED REGULAR PREMIUM policy is the policy inwhich you can invest your money in unit linked funds which allow you to withdrawmoney to meet the educational expenses of your child.KEY BENEFITS OF SMART KID1. lump sum payment of sum assured plus company contributes future premiums inthe unfortunate event of death of parent2. with income benefit rider , the child would receive an annual allowance everyyear till maturity in the unfortunate event of death of the parent3. withdrawal facility to provide money for key educational expenses of the child4. potentially higher returns over the long term by investing in unit linked funds5. cover continuance option to ensure continuance of life insurance cover even ifyou take a temporary break in premium paymentstax benefits on premiums paid and benefits received under the policy as per the prevailingincome tax laws32 33. _____________________________________________________Questionnaire1. How many companies do you know are in the insurance business?2. According to you, which is the most popular insurance company?3. How many policies do you know about these companies?4. Have you have purchased any life insurance? If yes, then of which company?5. Are you satisfied with the service provided by the company?6. Main reason of dissatisfaction?7. Which company would you opt for as an alternative?33 34. _____________________________________________________ According to you, which is the most popular insurance company?67135534 1 2LICICICI PrudentialMAX New York LifeBirla SunlifeTata-AIGBajaj AllianzSBI Life InsuranceHDFC34 35. _____________________________________________________ Have you purchased any life insurance? If yes, then of which company?4060YesNo731692 2LICICICI PrudentialMax New York LifeHDFCBirla Sunlife35 36. _____________________________________________________ Are you satisfied with the service provided by the company?305020YesNoSome What36 37. _____________________________________________________ Main reason of dissatisfaction?5111272Unfriendly serviceHidden facts about thepolicyWrong informationProblems during claims37 38. _____________________________________________________ Which company would you opt for as an alternative?154610510113LICICICI PrudentialMax New York LifeHDFCSBI Life InsuranceBajaj AllianzBirla Sunlife38 39. _____________________________________________________Regulations - The Agency LawsThe basics of the insurance business in India are governed by the Agency Law, which ispart of the Indian Contracts Act, 1872. Further, after the industry got opened up theregulatory authority has been the Insurance Regulatory & Development Authority(IRDA).Agent- The Definition.According to the section 182 of the Indian Contract Act, 1872, an agent is a personemployed to do any act for another or to represent another in dealing with a third person.In the insurance sector the term Agent is ordinarily applied to a person engaged by theinsurer to procure new business.Powers of the AgentAn agent can act only to the extent of authority may be expressed or implied. Anauthority is said to be expressed when it is given by words spoken or written. It is impliedwhen it is to be inferred from the circumstances of the case.Life Insurance AgentThe Insurance Act, 1938 defines an agent as one who is licensed under the act & is paidconsideration of his soliciting or procuring insurance business including business relatingto continuance, renewal or revival of policies of insurance.39 40. _____________________________________________________The Insurance Regulatory & DevelopmentAuthorityDuties, Powers & FunctionsSection 14 of IRDA Act, 1999 lays down the duties, powers & functions of IRDA. Subject to the provisions of the Act & any other law for the time being in force,the Authority shall have the duty to regulate, promote & ensure orderly growth ofthe insurance business & re-insurance business. Without prejudice to the generality of the provisions contained in sub-section(1),the powers & functions of the Authority shall include,1. Issue to the applicant a certificate of registration, renew, modify, withdraw,suspend or cancel such registration.2. protection of the interests of the policy holders, insurable interest, settlement ofinsurance claim, surrender value of policy & other terms & conditions ofcontracts of insurance.3. specifying requisite qualifications, code of conduct, & practical training forintermediary or insurance intermediaries & agents;4. specifying the code of conduct for surveyors & loss assessors;5. promoting efficiency in the conduct of insurance business;6. promoting & regulating organizations connected with the insurance & re-insurance business;7. levying fees & other charges for carrying out the purpose of this Act;40 41. _____________________________________________________8. calling for information from, undertaking inspection of, conducting enquiries &investigations including audit of the insurers, intermediaries, insuranceintermediaries & other organizations connected with the insurance business;The Duties & Obligations of the AgentAs per the IRDA guidelines every advisor must be trained & licensed to sell lifeinsurance. The responsibilities & obligations of the advisors have been clearly defined. Every insurance agent should himself & the insurance company that he representsalong with the license particulars. The advisors should take into the actual needs of the clients before recommendinga plan. All requisite information in respect of the products recommended should beprovided with a Sales Illustration & the premium to be paid. The agent is obligated to disclose the scales of commission likely to be earned byhim through sale of the recommended product, should the client wish to know it. The nature of information required in the application form should be adequatelyexplained along with the requirement for supporting documents. Once the proposal is submitted, the advisor shall inform the status of decision byinsurer promptly. In case of a claim, the advisor is required to render necessary assistance incomplying with the requirements for settlement of claims by the insurer. He/she should not interfere with any proposal introduced by any other anyinsurance advisor/agent or force the client to terminate an existing policy takenfrom him/her & take a new proposal within 3 years. An advisor cannot induce the client to omit any material information or submitany wrong information in the proposal form. Further no rebating or offering any inducements in lieu of taking a policy isallowed.41 42. _____________________________________________________ADVISORSThe importance of advisorsICICI Prudential Life Insurance Co. Ltd. aspires to provide state of the art of customersservice & opportunities & avenues for enterprising people to grow & prosper. Thecompany wish to grow exponentially that is backed by the latest technology, henceoffering its customers: Faster & more accurate service. Multi-channel distribution systems. Highly trained professional sales people offering quality pre & post sales service.It is in the above mentioned areas of personal specialization where the importance of anadvisor clearly stands out the advisor not only contribute in brining in new business forthe company, but also plays an important part in offering world class pre & post salesservice to the clients to the clients with the support of the organization. But the companyin its principles clearly states out that an advisor to means much more than a salesmanor a saleswoman, we at ICICI Prudential recognize our advisors as the ambassadors ofour organization in the market place & we consider the advisor force would be ourbiggest differentiating factor in the coming years. The advisor is an important asset notonly for the organization from the business point of view but also to the society on thewhole as he/she is someone who provide valuable service to the community be helpingpeople attain financial security & build funds for their future needs thereby assisting themin getting their financial freedom.If looked from the other side of the business where the company is operating thecompetitive Indian market & more so in the business of life insurance where thecustomers looks for self-belief & faith then the advisor certainly holds the vital link inthe overall business proposition. They represent the companys face & words on which42 43. _____________________________________________________the customers can trust because the customer knows that face. The advisor helps to createa web from the business to grow & driving the customer to come to the company withcomplete trust & faith.The principle of channel developmentThe company in its vision out the urge to become the dominant players in the players inthe industry. The company believes that a high level of self-motivation & a coherent teamwork for the organization can only achieve this on the whole. The company stresses greatemphasis on its core values which are: Integrity Customer first Boundary less Ownership PassionThese are the foundation on which the organization works & the base for the overallbusiness environment of the company. based on the above mentioned Pillars of thecompany the management has devised the basic principles for the program as a wholewhich are as following.Recruit the bestExperts in knowing what exactly their customers wants is well versed in spotting thetalents from the pools & recruiting only those who have the intellect, energy, drive & thepassion to initiate new beginnings & even a lot of changes if they feel so. The incumbentsare treated as winners & the custom hiring principle necessitates the factor of having theright person at the right place with the right work. And definitely no compromises onexpertise & competencies.43 44. _____________________________________________________Personal ResponsibilityThe company believes that it is the prerogative of the company to create the team that itwants. Therefore it aims at providing the learning & development conduits to employeesto enhance the domain of knowledge the important leadership & team skills.Empowered TeamsEach employee is a stake holder in the organization & its growth. It is the one of theimportant specialty here that the responsibility comes with a degree of autonomy &accountability. The area of operation & growth is to be decided by the individualshimself. But the communication is across the channels & ranks whereby the targets aresent & the corrective measures & rewards also come to them. The most important factoris the employee participation & empowerment.Rewards & RecognitionThe rewards in the company are directly proportional to the work & targets achieved &gone beyond. You work hard you earn more. The contributions done are recognized inthe most objective & transparent manner & on the demonstrated competence level. Butyes there is certainly an extra for the people who go beyond then what is expected fromthem.44 45. _____________________________________________________Shared Vision & PurposeThe company focuses on having the organizations striving towards a common goal,which is easily done through the effective communication & work channel. Large scaleinteractive process at the organization & group level helps in getting the employees knowof what is expected of them & how has been achieved. This factor encompasses throughall the critical intervention by the team members or the mentor of the team.The working environmentThe company is in a continuous search for the best of talents in the market, which alignwith the vision & mission of the organization. The company states out its working culturein certain important factors for the interested incumbents: Urge from the incumbent to be a part of a world class sales team. The freedom of working from his/her own office/residence. The flexibility of working hours, full time or part time. Opportunity to earn commission, bonus & incentives. Unlimited earnings- directly proportional to your efforts. Most important- the chance of flexible career.The company is aware of the current trends in the market & the essential factors ofincreasing the personal & human feeling to business. Thus, the company has got someunderlying facts & reasons for the working in a specific manner.45 46. _____________________________________________________The company gives the space & time required to grow, achieve & to seek new domains &opportunities. The changing dynamics of business makes it evident that the newopportunities will come from the gaps & needs in the market. Therefore, the need is to bealert enough to notice these new happenings & tap them as & when they arise. Thepeople in the company are its most important asset but the real focus should be ondelivering on the promises undertaken.The company also stresses out that the incumbents should have that urge & self belief sothat they are confident enough of driving the innovation & change drives that they thinkare essential. The company believes in being innovative & tenacious enough to open anew domains & horizons of business & hence regularly in the process of developing newproducts & offerings state of art services to all its clients, brokers & agents in thebusiness. Further, with the growing symbiosis of technology in the business the companyalso focuses on this aspect in the sense that it takes e-commerce & technology on a veryhigh priority with increasing resource being targeted at the new business economy & theinternet.46 47. _____________________________________________________THE PROFILE OF AN ADVISORQualifications1. Age should be ideally between 25-60 years.2. Minimum education qualification is 10 + 2.3. Good & convincing communication skills.4. Capacity to build an impressive network.5. Engaged in gainful business or corporation.6. Willing to undergo extensive training & development programs7. Pleasing personality.Skills & CompetenciesAs quoted by Mr. Shubro Mitra, Head HR, ICICI Prudential Life Insurance the companyis always on a look out for people who have the following the skills & competencies thatwe require in business are: Actuarial skills. Investment management skills. Core operation skills. Core underwriting skills. Relationship management skills. Project management skills47 48. _____________________________________________________The procedures of becoming an advisorICICI believes in getting who can align with the companys principle & beliefs wellenough to grow on their own. In the words of the top management the company believesthat one can become an advisor for the leader only & only if he/she has the following: Confidence Self-motivation Persuasion Urge to be financially independent Relationship skillsThe broad steps that best describe the procedure of becoming an advisor in the companyare as following: Confirmation of mutual interest as between the company & the individual Appearing & clearing the selection interview Profiling of the test dates between parties Draft payment favoring ICICI Prudential Life Insurance Co. Ltd., payableMumbai Finalizing of the training dates & the venueThe company provides for the all-round development of the individual & any previousexperience or inexperience in the related field is not an obstacle. The professionalapproach of the company in the training module helps it to train the incumbents in thebest possible manner. The company has got a professional in-house training staff that isone of the best in the practice. The company has laid down for a State-of-art training on: Selling skills Product knowledge Relationship skills48 49. _____________________________________________________The training is delivering through several convenient options keeping in view therequirements of the individuals & the target of the company. The training is done at thetiming & venue decided upon by the parties concerned.The incumbents have to complete hundred hours of training in any model that theychoose from. The guidelines laid down for the training are as per the books IRDA. Thetraining concept can be classified according to very different aspects, which can be thedelivery medium, & the time involved.On the basis of the delivery medium the process can be of: Face to face training Online training Self learningOn the basis of the time involved the process can be of: Full time- involving 15 days Part time- involving 27 days Online training- involving 2 monthsSo if we summarize the steps & formalities involved in the whole process, the formalitiesfor a candidate to become the advisor as per the IRDA are:Filling up the insurance advisor formDocuments required 7 passport size photographs Acceptable age proof Acceptable education proof Acceptable residence proofPayment through the demand draftCompletion of the trainingReporting of the form with the DOPS49 50. _____________________________________________________SWOT ANALYSISSTRENGTHICICI Prudential Life Insurance Company Limited is right now the market leader inPrivate Insurer segment.WEAKNESSThe company right now has lesser number of agents (i.e. financial advisors) than LIC ofIndia which affects their sales in comparison to LIC of India.OPPURTUNITY:ICICI Prudential Life Insurance Company Limited can give LIC of INDIA agents anopportunity to join ICICI Prudential Life Insurance Company Limited as ICICIPrudential has got more incentive packages & servicing quality better than LIC ofINDIA. Doing this they can reduce their cost of training and can exploit their experience.THREAT:Other big brand names like BIRLAS, TATA, HDFC, SBI, and AVIVA. etc.50 51. _____________________________________________________Market Share37.113.515.25.53.17.41.8 0.66.11.3 0.5ICICIPRUHDFCSTANDARDBIRLASUNALLIANZBAJAJOMKOTAKSBILIFEINGVYSYAMETLIFETATAAIGAVIVALIFEAMPSAMMARPercentage51 52. _____________________________________________________RecommendationsAfter going through the above table regarding market share of various companies in thefinancial year 2006-2007, there is no reason why ICICI prudential should rejoice of beingthe number one company in the country. The growth that companies like BIRLASUNLIFE, SBI LIFE INSURANCE, TATA-AIG, BAJAJ ALLIANZ, OM KOTAKMAHINDRA, AVIVA, ING VYASA, METLIFE, & AMP SANMAR have produced thatcan be quite a big unseen threat for the company in the coming years. So the companyshould start thinking of what they want from the market & where they want to seethemselves after a span of 10 years because if the popularity of these companiescontinues then one day they will become good competitors of ICICI Prudential & thenthe consequences can be quite disturbing for the company.52 53. _____________________________________________________Conclusion The company is in the regular process of investing considerably in expanding theadvisor base & administration & building infrastructure to meet demand in theincreasing market The companys group business is also beginning to show results, with restructuredgroup gratuity, superannuation & term products attracting 85 corporate clients A new employee goes through a two day induction module which introduceshim/her to the life insurance industry, concepts of life insurance, the shared valuesof the company as well as information on the company & core business processes,which is reinforced through an intranet based induction module which can beaccessed anywhere, anytime Training focuses on a learning architecture addressing both development ofgeneric & functional competencies comprising the four areas of leadership,business mastery, personal effectiveness & functional mastery The compensation strategy is based on the threefold model of pay forPerformance, Pay for the Job & Pay in line with the market The company anticipates the market place to get increasingly competitive & itbelieves that its first mover advantage will pay rich dividends & enable toconsolidate the leadership position amongst the private sector insurance players. Being an ICICI Prudential insurance advisor can be one of the most rewardingcareers you will find. It is also hard work. But at ICICI Prudential life, your hardworks pays off in the form of compensation & recognition53 54. _____________________________________________________BIBLIOGRAPHYMarketing management by - Philip KotlerResearch methodology by CR. KOTHARIWEBSITEwww.iciciprulife.comwww.google.comANNUAL REPORT BY ICICI PRUDENTIAL LIFE INSURANCECOMPANY LIMITED54