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Summer Internship project

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  • 1

    Table of Contents EXECUTIVE SUMMARY ........................................................................................................................................... 2

    I) INTRODUCTION ...................................................................................................................... 3 INDUSTRY PROFILE ................................................................................................................................................. 5 1) Life insurance: .................................................................................................................................................... 6 2) Non-life (general) Insurance: ............................................................................................................................. 7 3) Reinsurance Companies ............................................................................................................................... 8 Contribution to Indian Economy ............................................................................................................................ 8 Roles in the Insurance Industry .............................................................................................................................. 9 COMPANY PROFILE .............................................................................................................................................. 11 FUNCTION OF INSURANCE ................................................................................................................................... 13 WHY WE NEED INSURANCE: ................................................................................................................................ 14 RISK ...................................................................................................................................................................... 15 PRODUCT/SERVICES PROFILE ............................................................................................................................... 16 Type of INSURANCE Product ................................................................................................................................ 17 AWARENESS ......................................................................................................................................................... 19 STATEMENT OF RESEARCH................................................................................................................................... 19 OBJECTIVE OF THE STUDY .................................................................................................................................... 19 SIGNIFICANCE OF THE STUDY............................................................................................................................... 20 LIMITATIONS OF THE STUDY ................................................................................................................................ 20

    II) RESEARCH METHODOLOGY ........................................................................................................ 21 RESEARCH DESIGN: .............................................................................................................................................. 22 SAMPLING PLAN: .................................................................................................................................................. 23 ANALYSIS AND INTERPRETATION: ........................................................................................................................ 23 DATA ANALYSIS AND INTERPRETATION ............................................................................................................... 24 AGE ....................................................................................................................................................................... 24 Marital status ....................................................................................................................................................... 26 Occupation VS Annual Income ............................................................................................................................. 27 Dependents .......................................................................................................................................................... 28 Do you have any of these Loans? ......................................................................................................................... 29 Do you have any of these? ................................................................................................................................... 30 How good is your knowledge about Financial & Capital Market? ....................................................................... 31 How long you instead to be investment and what is your purpose .................................................................... 32 FINDINGS .............................................................................................................................................................. 33

    III) THEORETICAL BACKGROUND .................................................................................................. 34 Portfolio Construction .......................................................................................................................................... 35 Analysis of constraints ......................................................................................................................................... 37 Determination of objectives ................................................................................................................................ 39 Selection of portfolio ........................................................................................................................................... 40 Risk and return analysis ....................................................................................................................................... 41 Diversification ...................................................................................................................................................... 41 ICICI PRUDENTIAL PRODUCT ................................................................................................................................ 42

    MANAGEMENT LESSON: ................................................................................................................. 49

    RECOMMENDATIONS TO COMPANY ............................................................................................... 53

    IV CONCLUSION ............................................................................................................................. 56 Conclusion ............................................................................................................................................................ 57 BIBLIOGRAPHY ..................................................................................................................................................... 58 ANNEXURE ........................................................................................................................................................... 59

  • 2

    EXECUTIVE SUMMARY

    ICICI Prudential Life Insurance is one of the largest Insurance networks in the country, and

    2nd Life Insurance Company in India. The ICICI Group has been in existence since 1955 when

    ICICI Ltd., was created. ICICI Prudential started in 2002 as subsidiary of ICICI Ltd, The

    Insurance sector, after the opening up, provides greater opportunities. Several global players have

    emerged and the market has changed significantly. In the changed scenario, the expectation is that

    the low Insurance premium as a percentage of GDP prevailing in India will improve and will offer

    better opportunities to the insurance players.

    In the life Insurance segment the Life Insurance Corporation of India (LIC) is the major

    player. It is constituted in to seven Zones. Currently there are 5, 60,000 LIC agents in India. General

    Insurance is another segment, which has been growing at a faster pace.

  • 3

    I) INTRODUCTION

  • 4

    Life insurance is a form of insurance that pays monetary proceeds upon the death of the

    insured covered in the policy. Essentially, a life insurance policy is a contract between the named

    insured and the insurance company wherein the insurance company agrees to pay an agreed upon

    sum of money to the insured's named beneficiary so long as the insured's premiums are current.

    With a large population and the untapped market area of this population insurance happens to be a

    very big opportunity in India. Today it stands as a business growing at the rate of 15-20% annually.

    Together with banking services, it adds about 7 %to the countrys GDP. In spite of all this growth

    statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian

    populations are without life insurance cover and the health insurance. This is an indicator that

    growth potential for the insurance sector is immense in India.

    It was due to this immense growth that the regulations were introduced in the insurance sector and

    in continuation Malhotra Committee was constituted by the government in 1993 to examine the

    various aspects of the industry. The key element of the reform process was participation of overseas

    insurance companies with 26% capital.

    Since then the insurance industry has gone through many changes. The liberalization of the industry

    the insurance industry has never looked back and today stand as one of the most competitive and

    exploring industry in India. The entry of the private players and the increased use of the new

    distribution are in the limelight today. The use of new distribution techniques and the IT tools has

    increased the scope of the industry in the longer run.

    Insurance is the method of spreading and transfer of risk. The fortunate many who are exposed to

    some or similar risk shares loss of the unfortunate. Insurance does not protect the assets but only

    compensates the economic or financial loss.

  • 5

    INDUSTRY PROFILE

    Insurance in India

    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.

    A Brief history of the Insurance Sector

    The business of life insurance in India in its existing form started in India in the year 1818 with the

    establishment of the Oriental Life Insurance Company in Calcutta.

    For over 50 years, life insurance in India was defined and driven by only one company- the Life

    Insurance Corporation of India (LIC). With the Insurance Regulatory and Development Authority

    (IRDA) Bill 1999 paving the way for entry of private companies into both life and general sectors

    there was bound to be new-found excitement- and new success stories

    The percentage of premium income to GDP which was just 2.3% in 2000-01 rose to 3.3% in 2002-

    03; and life insurance has emerged as the dominant contributor to this growth.

    The industry presented a huge opportunity. Life insurance penetration, for instance, was at an

    abysmal 22% of the insurable population. However, private players have had to rise to many

    challenges. They were faced with attitudinal barriers towards the category and the perception that

    insurance was only a tax saving tool. Insurance per se had lost it basic rationale: protection. It wasnt

    surprising then that its potential lay frozen and unexploited. The challenge for private insurance

    players was to change the established category driver and get customers to evaluate life insurance

    as an investment-cum-protection tool.

    Classification of insurance

    The insurance industry in India can broadly classified in two parts. They are.

    1) Life insurance.

    2) Non-life (general) insurance.

  • 6

    1) Life insurance:

    Life insurance can be defined as life insurance provides a sum of money if the person who is

    insured dies while the policy is in effect.

    In 1818 British introduced to India, with the establishment of the oriental life insurance company

    in Calcutta. The first Indian owned Life Insurance Company; the Bombay mutual life assurance

    society was set up in 1870.The union government had opened the insurance sector for private

    participation in 1999, also allowing the private companies to have foreign equity up to 26%.

    Budget 2014 government have given permission up to 49% of shares of overseas insurance

    company.

    Benefits of life insurance

    1) Life insurance encourages saving and forces thrift.

    2) It is superior to a traditional savings vehicle.

    3) It helps to achieve the purpose of life assured.

    4) It can be enchased and facilitates quick borrowing.

    5) It provides valuable tax relief.

    Fundamental principles of life insurance contract;

    1) Principle of almost good faith:

    A positive duty to voluntary disclose, accurately and fully, all facts, material to the risk being

    proposed whether requested or not.

    2) Principle of insurable interest:

    Relationships with the subject matter (a person) which is recognized in law and gives legal right

    to insure that person.

  • 7

    2) Non-life (general) Insurance:

    Non-life insurance companies generally cover risks other than those relating to human lives. The

    exceptions to this are personal accident and health insurance, which are provided by non-life

    insurance companies. Any asset either gives a monetary return (e.g. a house given on rent), or offers

    convenience (e.g. a car which can be used to travel from one place to another) can be insured. All

    assets are exposed to various risks: they can be damaged or destroyed by re, earthquake, riot, theft,

    ooding, cyclones etc. If the asset is damaged by any of these risks, the owner will be at a

    disadvantage and they will lose the income or the convenience the asset provided. Non-life

    insurance companies offer products that cover these risks and compensate the owner should the

    asset be damaged by one of them. It is a product from this type of company that an individual would

    buy to protect their assets, for example, their home against re etc.

  • 8

    3) Reinsurance Companies

    We know that insurance is a risk transfer mechanism. Risk is transferred from those who are unable

    to bear it to those who can. However, insurance companies can only take on so much risk. Once

    that limit is reached, the insurer itself is exposed to the risk of loss. When this happens insurers look

    to transfer some of their risks to someone else to shield themselves from overexposure. This is

    where reinsurance companies come into use. A reinsurance company is an insurer for the insurance

    company. Reinsurance companies take on a certain percentage of the risks on the insurance

    companys books, in return for the payment of a consideration.

    Contribution to Indian Economy

    Life Insurance is the only sector which garners long term savings.

    Spread of financial services in rural areas and amongst socially less privileged.

    Long term funds for infrastructure.

    Strong positive correlation between development of capital markets and insurance/pension

    structure.

    Employment generation.

  • 9

    Roles in the Insurance Industry

    Chart-1.1

    Agents

    Corporate Agents

    Intermediaries

    Underwriters

    Actuaries

    TPAs

    Sureyors/

    Loss Adjusters

    Training Institutes

    NGO Protecting the

    Customer Rights

  • 10

    Agents These contribute the major percentage of insurance sales in India. It is the agents primary responsibility to meet the prospective client, understand

    their needs, and accordingly recommend suitable products. We shall discuss

    the role of agents in more detail in section H.

    Corporate

    agents

    These include banks and brokers. More details about these are included in

    section F2

    Intermediaries These can be individuals as well as organisations, like rms, banks and composite brokers. Intermediaries solicit and procure business from

    prospective clients for the insurance company.

    Underwriters These decide whether to accept or reject the insurance proposal. If the proposal is to be accepted, then the underwriter decides at what price it

    should be accepted

    Actuaries These calculate the standard price of products. They take into account statistical data and the past claims experience of the company. Apart from

    pricing individual products, they also do an overall nancial assessment of

    the insurance company from time to time to make sure that the company has

    sufcient reserves to pay for future liabilities.

    Third party

    administrators

    (TPAs)

    These do the work of building hospital networks. They also help with

    approvals at the time of cashless admission to a hospital and with settling

    the bill with the insurer on discharge

    Loss

    adjusters/

    surveyors

    These do the work of assessing and certifying a loss when a claim is made

    on the insurance company. They have a major role to play in non-life

    insurance business.

    The Regulator The Insurance Regulatory and Development Authority (IRDA) is the insurance Regulator in India. The IRDA grants licences to insurance

    companies and makes sure all insurance companies are in compliance with

    the regulations at all times.

    Training

    institutes

    These have the responsibility of supplying trained manpower to meet the

    ever growing need for skilled labour in the insurance industry.

    NGOs

    Protecting the

    customers

    rights

    Non-Governmental Organisations (NGOs) play an important role in

    spreading awareness about insurance products and protecting the rights of

    the customers. The role of NGOs is more important in the rural areas where

    they work with Self Help Groups (SHGs) and insurance companies on

    deeper penetration of micro-insurance products at the grassroots level.

    Table 1.1

  • 11

    COMPANY PROFILE

    ICICI Prudential Life Insurance Company limited (the Company) a joint venture

    Between ICICI Bank Limited and Prudential plc. Of UK was incorporated on July

    20, 2000 as a company under the Companies Act, 1956 (the Act). The Company

    Is licensed by the Insurance Regulatory and Development Authority (IRDA) for carrying life

    insurance business in India.

    The company brings together the local market expertise and financial strength of ICICI Bank and

    Prudentials International life insurance experience. The company was granted a certificate of

    Registration by the IRDA on November 24, 2000 and eighteen days later, issued its first policy on

    December 12. 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 year ended March 31, 2006, the company garnered Rs.2,

    412 crore of weighted new business premium and wrote 837,963 policies. The sum assured in force

    stands at Rs.45, 888 crore. The company has a network of over 72,000 advisors; as well as 9

    bancasurance partners and over 200 corporate agent and broker tie-ups.

    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.

    For the past five years, ICICI Prudential has retained its position as the No.1 private insurer in the

    country, with a wide range of flexible products that meet the needs of the Indian customer at every

    step in life.

    ICICI Prudential closed the financial year ended march 31, 2004 with a total received premium

    income of Rs. 9.9 billion; up 135% last years total premium income of Rs.4.20 billion. New business

    premium income shows a 106% growth at Rs. 7.5 billion, driven mainly by the companys range of

    unique unit-linked policies and pension plans. The companys retail market share amongst private

    companies stood at 36%, making it clear leader in the segment. To add to its achievements, in the

    year 2003/04 it was adjudged Most Trusted Private Life Insurer (Economic Times Most Trusted

  • 12

    Brand Survey by AC Nielsen ORG-MARG). It was also conferred the Outlook Money-Best Life

    Insurer award for the second year running. The company is also proud to have won Silver at

    EFFIES 2003 for its Retire from work, not life campaign. Notably, ICICI Prudential was also

    short-listed to the final round for its Sindoor campaign in EFFIES 2002.

    ICICI Prudentials success is rooted in its philosophy to always offer the customer a choice. This

    has been the driving force behind its multi-channel distribution strategy, which includes advisors,

    banks, direct marketing and corporate agents. In fact, ICICI Prudential was the first life insurer to

    invest in multiple channels and offer the customer choice and access; thus reducing dependency on

    any one channel, great strides in the retirement solutions and pensions market.

    The company has 9 bank partnerships for distribution, having agreements with ICICI Bank, Bank

    of India, Federal Bank, South Indian Bank, Lord Krishna Bank, and some co-operative banks, as

    well as over 200 corporate agents and brokers, it has also tied up with NGOs, MFIs and corporates

    for the distribution of rural policies.

    ICICI Prudential has recruited and trained more than 72,000 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.

    The joint strengths

    A powerful joint venture partnership with each carrying a set of strengths

    complementing each others

    Reputation

    Insurance

    expertise

    Product

    Distribution

    Operations

    Brand strength

    Infrastructure

    Customer base

    Local knowledge

    Market Innovators

    PRUDENTIALICICI

    Chart 1.2

  • 13

    FUNCTION OF INSURANCE

    Provide protection: The primary function of insurance is to provide protection against

    future risk, accidents and uncertainty. Insurance cannot prevent the happening of the risk, it

    can only provide compensation (sum assured) for the loss that comes as a result of the certain

    event happening.

    Collective bearing of risk: Insurance is an instrument to share the financial loss of few

    among many others. Insurance is a mean by which few losses are shared among larger

    number of people. All the insured contribute the premiums towards a fund and out of which

    the persons exposed to a particular risk is paid.

    Assessment of risk: Insurance determines the probable volume of risk by evaluating various

    factors that give rise to risk. Risk is the basis for determining the premium rate also.

    Small capital to cover larger risk: Insurance relieves the businessmen/ employee from

    security investments, by paying small amount of premium against larger risks and

    uncertainty.

    Means of savings and investment: Insurance serves as savings and investment, insurance

    provide option to invest in unit linked plans as well as traditional plans such as money back,

    endowment etc. For the purpose of availing income-tax exemptions also, people invest in

    insurance.

  • 14

    WHY WE NEED INSURANCE:

    Dying Too Soon (premature death): Insurance provides protection against the premature death

    because we all know our Date of Birth, but we dont know our Date of expiry. Life is uncertain so

    we have to insured our life for securing our family future need.

    Living death: This term refers to those who have contracted a serious illness or met an accident

    that disables the person and renders him or her unable to work for an income to support the family,

    besides having endures the terrible pain that goeswith the condition.

    Saving for old age: - After retirement the earning capacity of a person reduces. Life insurance

    enables a person to enjoy peace of mind and a sense of security in his/her old age.

    Childrens future: for the tackle with the financial need of children big event such as education,

    marriage etc. we need insurance because we dont know about life because it uncertain so we need

    proper arrangement for this & insurance is a better option for this.

    Initiates investments: - Life Insurance Corporation encourages and mobilizes the public savings

    and canalizes the same in various investments for the economic development of the country. Life

    insurance is an important tool for the mobilization and investment of small savings.

    Tax Benefit: - Under the Income Tax Act, premium paid is allowed as a deduction from the total

    income under section 80C.

  • 15

    RISK

    Chart 1.3

    Premature death Individual job prole is quite stressful and may involves intense travelling.

    He is exposed to the risk of early death which could occur due to an accident or illness caused by

    stress. A life insurance plan can protect his family against the risk of individual early death.

    Accident Due to the frequent travelling that individual has to do, he is prone to the risk of

    accidents that can result in either permanent or temporary disability. A life insurance plan with a

    disability benet rider or a separate accidental death policy can protect his family against the risk

    of becoming disabled.

    Illness Due to the stressful nature of his job, individual is exposed to the risk of suffering from

    critical illnesses. A life insurance plan with a critical illness rider, or a health insurance policy, can

    help meet the hospitalization expenses should individual suffer from any critical illness.

    Unemployment If individual has an accident and becomes disabled, he risks losing his job and

    becoming unemployed.

    Living too long Individual may be exposed to the risk of living too long beyond retirement. He

    is working for a private company that does not provide a monthly pension after retirement as part

    of his employee benets. Hence he needs to work towards building a retirement fund during his

    working life by investing in a retirement pension plan.

    Risk

    Premature

    Death

    Illness

    Accedent

    Living to long

  • 16

    PRODUCT/SERVICES PROFILE

    ICICI Prudentials product range has been developed on the understanding that different

    people have their own sets of needs at various stages of their lives. It has thus built a flexible

    portfolio of products that can be customized to cater to varying needs of people at each stage, and

    thus ensure protection in every step of life. The companys philosophy has been to help customers

    understand their financial needs and work closely with them to customize a product that would

    meet. Advisors can offer a complete range of products Savings plans, Child plans, Market-linked

    plans, Protection plans, and Retirement plans and tailor a flexible solution to meet customers

    changing needs at every stage of life. In fact, ICICI Prudential was the first to un-bundle product

    benefits, pioneering the concept of riders and soon after introduce comprehensive market-linked

    and retirement plans.

    ICICI Prudential has launched a handful of products that are analyzed below:

    ICICI Prudential's life insurance products may be loosely categorized under three forms: pure life

    insurance products without an investment angle to them; a product that is a mix of a cumulative

    investment scheme and an insurance product; and, finally, standard products such as money-back

    and endowment policies.

    1. Accident and 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.

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

    to accident.

    3. 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

    4. 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 in SmartKid,

    SecurePlus, and CashPlus.

    5. 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.

  • 17

    Type of INSURANCE Product

    The entire Insurance sector is divided into 2 broad categories:

    General Insurance

    Life Insurance

    Further Life Insurance is sub-divided into two categories:

    TRADITIONAL INSURANCE PLANS

    ULIPS (Unit Linked Insurance Plans)

    Chart 1.4

    Traditional products are basically the term plans and the whole life plans, in which risk cover is

    the foremost objective of the customers. In case of term plans the sum assured is given to the

    nominee of the life to be insured in case of his death, there is no maturity claim, whereas in case of

    whole life some amount is paid after a certain period of time.

    Main Life Insurance product

    Term plan Endowment plan Whole Life

    Insurance plans

    Unit Linked Insurance Plan

    Pension

    & Savings Plans

  • 18

    ULIPS were introduced couple of years back in the Indian market. These include the endowment

    policies and money back policies that have the investment benefit along with the risk cover i.e. the

    certain portion of the premium paid by the customer is used for the risk cover and rest is further

    invested in the funds offered by the company.

    So when the private players entered the market they decided to introduce market driven plans named

    ULIP which promised a very attractive return to the consumers. Birla Sun Life was the first

    company to establish the concept of ULIP. Though this concept was very attractive but still a

    number of policies got lapsed, then the private players came up with an idea of 3 years lock in

    period, so that number of policies lapsing could be reduced, which worked well.

    Now since the expectations of investors have increased who are investing their money, so the money

    flow in mutual funds and stock market has increased gradually because the returns are as high as

    25- 30% despite of that Life Insurance is Safe Avenue while promising you good returns, this would

    be clear from the following points:

    Returns in ULIPs are also as high as 25% - 30%, while it also gives life cover in case of

    happening such as death, disability, etc.

    Risk in ULIPs is less as compared to mutual funds and stock market, as ULIPs offer different

    funds with different combinations of debt and equity.

    Fund management fee in ULIPs is 1.25% as compared to the fee in mutual funds 2.5%.

    The entire fund of the investor can be eroded under mutual fund if market crashes, but under

    ULIPs at least principle amount plus bank rate is guaranteed.

    ULIPs provide insurance cover as well as good returns.

    Capital gains are not taxable under ULIPs.

    Most companies offering ULIPs provide a number of free switches to its investors, if they

    would like to switch their funds, but these switches are chargeable under mutual funds.

    Most of the investors in the Indian market are not aware of these benefits of Life Insurance, but as

    the awareness is increasing more and more investors are joining this sector, resulting in increased

    turnover year over year.

  • 19

    AWARENESS

    If you take example of US the percentage of insured person for life & Health insurance is

    75% but unfortunately in India people are less interested in the insurance. They are only 6 -8 % in

    the number those who taken insurance. So here insurance company have to make aware about the

    benefit of the insurance & provide better solution to increase the customer base.

    STATEMENT OF RESEARCH

    Study Of Equity Fund Performance & Consumer Financial Need Analysis Of ICICI Prudential

    Life Insurance Products.

    OBJECTIVE OF THE STUDY

    For every problem there is a research. As all the researches are based on some and my

    study is also based upon some objective and these are as follows.

    1. To understand the customer risk and return

    2. To understand the insurance products and there Fund performance of ICICI Prudential life

    insurance co ltd.

    3. To understand Equity and Debt fund

  • 20

    SIGNIFICANCE OF THE STUDY

    The project is concerned with the STUDY ON CONSUMER RISK & RETURN AND FUND

    PERFORMANCE ICICI PRUDENTIAL LIFE INSURANCE. This study is very useful as the

    financial market become more sophisticated and complex, investor needs a financial intermediary

    who provides the required knowledge and professional expertise on successful investing and Life

    insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered

    in the policy. Essentially, a life insurance policy is a contract between the named insured and the

    insurance company wherein the insurance company agrees to pay an agreed upon sum of money to

    the insured's named beneficiary so long as the insured's premiums are current

    LIMITATIONS OF THE STUDY

    By working on this project, a lot of knowledge about the insurance sector in INDIA has been gained.

    However, there were many limitations or problems that I faced while working on this project. The

    following are the limitations:

    Small Sample Size: The study was relied more on the primary data and the data was

    collected from a small population of 200, therefore, the findings may not be applicable in

    their true sense when it is applied in general.

    Time Constraint: As the duration of internship was only 8 weeks, therefore, it was very

    difficult to conduct the entire study about the vast insurance sector.

    Small area: - This research done only in Jamnagar area including some targeted population.

    Respondents error: - There is possibility to respondent errors. People generally do not

    feel right to discuss their savings and investments.

  • 21

    II) RESEARCH

    METHODOLOGY

  • 22

    Introduction

    Research in common parlance refers to a search for knowledge. One can also define

    research as a scientific and systematic search for pertinent information on a specific topic.

    Research is the solution of the problem, whether created or already generated. When

    research is done, some new outcome, so that the problem (created or generated) to be solved.

    RESEARCH DESIGN:

    Research Design is the conceptual structure within which research is conducted. It

    constitutes the blueprint for collection, measurement and analysis of data. The design used

    for carrying out this research is Descriptive.

    Descriptive Research

    This study is based on a descriptive research design wherein the financial needs and

    investment associated with the various asset classes have been studied and the reasons for

    customer perception regarding these asset classes have been found out

    DATA TYPE: In this research the type of data collection is

    Primary data

    Secondary data

    DATA SOURCE: The sources of collection of secondary data are:

    Questionnaire

    Books

    Websites

    Brochure

  • 23

    SAMPLING PLAN:

    It is very difficult to collect information from every member of a population .As time and

    costs are the major limitation that the researcher faces.

    A sample of 100 was taken the sample size of 100 individuals were selected on the basis of

    convenient sampling technique. The individuals were selected in the random manner to

    form sample and data were collected from them for the research study.

    ANALYSIS AND INTERPRETATION:

    Data collection through questionnaire and personnel interview resulted in availability of the

    desired information but these were useless until there were analyzed. Various steps required

    for this purpose were editing, coding and tabulating. Tabulating refers to bringing together

    similar data and compiling them in an accurate and meaningful manner. The data collected

    by questionnaire was analyzed, interpreted with the help of table, bar chart and pie chart.

  • 24

    DATA ANALYSIS AND INTERPRETATION

    AGE

    Row Labels Count of AGE

    Below 30 71

    30-40 13

    40-50 10

    Above 50 6

    Grand Total 100

    Table 2.1

    Graph 2.1

    So above table show there are more respondent age below 30, so here we can conclude

    that there are more number of young respondent so there lives are more important as there are

    many responsibility on todays youth. So product like insurance is most important for them but in

    India only 6-8 % population are avail with Insurance.

    71

    13 106

    0

    10

    20

    30

    40

    50

    60

    70

    80

    Below 30 30-40 40-50 Above 50

    AG

    E

    Count of AGE

  • 25

    The group of people who all are above 50 dont actually get the benefit from insurance as they

    have to pay more premium if they want insurance policy or may be company may reject the

    proposal of the one who are suffering from deadly disease.

  • 26

    Marital status

    Marital Status / Age group 30 or less 30-40 40-50 Above 50 Grand Total

    Married 3 12 11 4 30

    Unmarried 66 4 70

    Grand Total 69 16 11 4 100

    Table 2.2

    Graph 2.2

    From the above diagram we can observe that almost 66 % of respondent are unmarried at the age

    of 30 or less so they dont have much responsibility so there should have more saving and

    investment and their investment can be more risky.

    3

    12 11

    4

    66

    4

    0

    10

    20

    30

    40

    50

    60

    70

    30 or less 30-40 40-50 Above 50

    No

    . of

    resp

    on

    den

    ce

    Martial Status VS Age Group

    Married Unmarried

  • 27

    Occupation VS Annual Income

    Income /

    Occupation

    Businessma

    n

    Professiona

    l

    Salaried

    person

    Self

    employed

    Grand

    Total

    Below 2 lacs 4 8 19 15 46

    2- 5 lacs 6 4 11 5 26

    2-5 lacs 1 3 4

    5-10 lacs 3 5 7 2 17

    Above 10 lacs 5 2 7

    Grand Total 19 19 40 22 100

    Table 2.3

    Graphs 2.3

    There are more salaried person from total respondent but there salary arent above 10

    lakhs so there investment amount would be low as compare to businessman whose income are

    above 10 lakhs and more safe even salaried person would prefer insurance as a basic necessity as

    they dont have any extra income and the find are limited to their earnings so if some things

    happens to salaried person and if he is only one source of income for family he would need to

    transfer his risk to insurance company so even after his death there family would have some

    amount of insurance which will fulfil their financial needs.

    4

    8

    19

    15

    64

    11

    5

    133

    57

    2

    5

    2

    0

    5

    10

    15

    20

    Businessman Professional Salariedperson

    Self employed

    No

    . of

    Res

    po

    nd

    ence

    Occupation VS Annual Income

    Below 2 lacs 2- 5 lacs 2-5 lacs 5-10 lacs Above 10 lacs

  • 28

    Dependents

    Dependents Count

    Parents 63

    Spouse 11

    Children 8

    Others 18

    Grand Total 100

    Table 2.4

    Graphs 2.4

    Most of the respondent have responsibility of their parents spouse children and others but 63

    dependents have responsibility of only parents.

    63

    11 8

    18

    0

    10

    20

    30

    40

    50

    60

    70

    Parents Spouse Children Others

    No

    . Of

    Dep

    end

    ents

    Dependents

  • 29

    Do you have any of these Loans?

    Loans No. of Respondents having loan

    Business loan 2

    Car loan 10

    House loan 15

    Personal loan 19

    Other loan 15

    Grand Total 61

    Table 2.5

    Graph 2.5

    There are 19 respondent who have personal loan also there are only 2 respondent who have taken

    business so there are very few businessman as observed in previous chart of occupation.

    210

    15

    19

    15

    No. of Respondents having loan

    Business loan Car loan House loan

    Personal loan Other loan

  • 30

    Do you have any of these?

    Insurance Count

    Property Insurance 6

    Medical Claim 4

    Pure Life Insurance 73

    disability/Physical impairment/Trauma benefits 16

    Total 100

    Table 2.6

    Graphs 2.6

    From above chart we can observe that almost 73 have pure insurance but there very few who have

    medical claim which means they might not be aware about medical claim or they must not feel

    medical as importance as life insurance. Instead medical claim is also most important because

    many times you suddenly might fall sick which result in some surgery which will cost a lot for a

    middle class family so to be get protection from the uncertain health Medical claim is most

    important.

    Property

    Medical Claim5%

    Pure Life Insurance

    73%

    disability/Physical impairment/Trauma

    benefits

  • 31

    How good is your knowledge about Financial & Capital Market?

    Knowledge about Financial Market

    Bank savings &

    FD Equity

    Mutual

    Funds ULIP

    Grand

    Total

    Expert of Finance & Capital market 2 16 12 4 34

    Knowledge of Bank FD/Post

    office/NSC 12 5 17

    Knowledge of Mutual Fund / Share

    Market 3 8 15 3 29

    No Knowledge 7 8 5 20

    Grand Total 24 24 40 12 100

    Table 2.7

    Graph 2.7

    From above chart there are 16 respondent who invest in Equity and are expert of financial and

    capital market so they can get reasonable return but there are 8 respondent who invest in Equity but

    they have some knowledge of MF/ share market.

    But there are very few who invest in UIP an insurance plan, as most of respondent is actually not

    aware about ULIP plan there return and risk so the customer mostly dont invest in ULIP plan.

    2

    16

    12

    4

    12

    5

    3

    8

    15

    3

    78

    5

    0

    2

    4

    6

    8

    10

    12

    14

    16

    18

    Bank savings & FD Equity Mutual Funds ULIP

    No

    . Of

    Res

    po

    nd

    ent

    Investment Pattern

    Konwlege of Investment VS. Investment Pattern

    Expert of Finance & Capital market Knowledge of Bank FD/Post office/NSC

    Knowledge of Mutual Fund / Share Market No Knowledge

  • 32

    How long you instead to be investment and what is your purpose

    Purpose of Investment / Time Period

    Less than

    5 years

    Between

    5-7 years

    Between

    7-10 years

    Above

    10 years

    Grand

    Total

    Generate current income & also grow

    the value of investment somewhat

    overtime by taking little risk 15 8 3 6 32

    Grow the value of investment

    moderately over time by taking a fair

    level of risk 6 9 5 5 25

    Grow the value of investment

    substantially over time by taking a

    considerable amount of risk 9 3 1 2 15

    Preserve the value of my investment &

    minimize the risk of my wealth losing

    value 6 12 6 4 28

    Grand Total 36 32 15 17 100

    Table 2.8

    Graph 2.8

    Analysis

    From above table and diagram there are more respondent who all are interested to get

    current income also grow the value of investment it is possible in term of buying value stocks in

    which there are high dividend yield also stock price may rise in future. Also individual can invest

    in pension fund.

    158

    366

    95 5

    93 1 2

    612

    6 4

    0

    10

    20

    Less than 5 years Between 5-7 years Between 7-10 years Above 10 years

    Purpose of Investmnet VS. Time Period

    Generate current income & also grow the value of investment somewhat overtime by takinglittle risk

    Grow the value of investment moderately over time by taking a fair level of risk

    Grow the value of investment substantially over time by taking a considerable amount ofrisk

    Preserve the value of my investment & minimize the risk of my wealth losing value

  • 33

    FINDINGS

    Age: inuences the needs of an individual in several ways. When an individual starts earning in

    their early twenties they are more concerned with self-protection and the protection of income.

    Going forward, the responsibility of an individual increases when they get married, acquire assets

    like a home and a retirement fund, and they start to need to take care of their parents. Age also

    affects the cost of buying protection. Insurance premiums for a person in the 20-25 year age group

    are much less than the premiums for a person in the 30-35 year age group. So it is wise to buy

    insurance protection as early as possible.

    Dependents: When an individual gets married, they will extend their family and have the

    responsibility of providing for their spouse and children. At a later stage in life when the

    individuals parents retire, they may also become dependent, thereby increasing the individuals

    number of dependents. Hence the greater the number of dependents, and the greater the need for a

    higher insurance protection cover.

    Income: The income of an individual has a larger role to play in meeting their nancial

    responsibilities, like planning for their childrens education, childrens marriage, buying a home

    and building a retirement fund. When an individual starts earning their income is generally low.

    At that stage the income cannot take care of requirements like buying a house and/or a car. Loans

    bridge this gap. Insurance protection against these loans is important in the event of anything

    happening to the familys main income provider. For responsibilities such as investing for a

    childs education and marriage and their own retirement, the individual can start with a small

    amount and increase their investments as their income grows.

    Assets and liabilities Assets and liabilities have a considerable effect on an individuals

    protection needs. Assets like a house are mainly nanced through loans. Income protection will

    enable the repayment of such loans in the event of long-term disability or the untimely death of

    the family income provider. Liabilities, such as loans taken to buy a car or for vacations, can be a

    burden on the family members in the event of the income providers death. It may force the family

    to sell other assets or dip into investments to clear these loans which can be detrimental to the

    interests of the family

  • 34

    III) THEORETICAL

    BACKGROUND

  • 35

    Portfolio Construction

    Constructing a portfolio depends, to a significant degree, on the nature of the investor. Portfolio

    refers to a combination of securities such as stocks, bonds and money market instruments. Portfolio

    construction is the process of combining the broad assets classes to yield optimum return with

    minimum risk.

    Approaches in portfolio construction

    1. Traditional approach

    2. Markowitz efficient frontier approaches

    Traditional approach

    The traditional approaches deals with two crucial decisions

    1. Determining the objectives of the portfolio

    2. Selecting the securities to be included in the portfolio.

    This is carried out in 4 to 6 steps. The constraints of the investor should be analysed before

    formulating the objectives. Then based on objectives the securities are selected. There after the risk

    and return of the securities should be studied. The investor must determine the main risk categories

    that he or she is trying to minimize. A compromise between risk and no-risk factors is then made.

    Finally relative portfolio is then assigned to securities like bonds, stocks, and debentures and

    diversification is carried out.

    Following is the flow chart depicting the above steps.

  • 36

    Chart 3.1

  • 37

    Analysis of constraints

    These are some of the most common constraints: -

    Income needs / financial need

    The income needs depend on the need for income in constant rupees and current rupees.

    Need for current income:

    The investor should establish t income which the portfolio should make. The current income

    needs depend on the total current financial plan of the investor. The expenditure required to maintain

    a certain standard of living and all the other income generating sources should be determined. Then

    it is possible to determine how much income must be provided for the portfolio of securities.

    Need for constant income:

    Inflation reduces the purchasing power of money. Hence the investor estimates the impact

    of inflation on his estimated stream of income and tries to create a portfolio which could offset the

    impact of inflation.

    Liquidity

    The liquidity requirement of an investor are highly subjective. If the investor prefers to maintain

    high liquidity, then funds should be invested in high quality short term debts such as money market

    funds, commercial papers and shares that are widely traded. The investor should plan his cash drain

    and the need for net cash inflows during the investment period.

    Safety of principal

    Investment in bonds and debentures is safer than investment in stocks. Even among stocks, the

    money should be invested in regularly traded companies of long standing. Investing money in

    unregistered finance companies may not provide adequate protection.

    Time horizon

    Time horizon refers to the investment timeframe under consideration. An individuals risk and

    return preferences are often described in terms of his life cycle.

    The first stage of early career days assets are few than liabilities. He has long horizon of life

    expectancy with possibilities of growth in income. He may take high risk and growth oriented

    investments.

    At midcareer stage he wants to protect his capital investment due to less time horizon and more

    assets than liabilities. He may take moderate risk and reduce some high risk investments.

    At final stage or retirement age time horizon is limited, he needs steady income. He shifts his

    investment to the lower return and low risk category, as now safety of principal is at top priority.

  • 38

    Tax consideration

    Investors in the income tax paying group consider the tax consideration they could get from their

    investments. They would always like to reduce taxes. Investing in government bond and NSCs

    can help avoid taxes. This constraint makes the investor include those assets in his portfolio that

    will reduce taxes.

    Temperament.

    Some investors are risk lovers who like to take on higher risk even for low returns. Others are risk

    averse, who may not be willing to take high risk even for high returns. The other category may be

    risk-neutral investors who balance returns and risk.

  • 39

    Determination of objectives

    Portfolios have common objective of financing present and future expenditures from a large pool

    of assets. The return that investor wants and the degree of risk that he is willing to take depends

    on the constraints.

    The common objectives are: -

    1. Current income

    2. Growth in income

    3. Capital appreciation

    4. Preservation of capital.

    The investor in general would like to achieve all the four objectives; nobody would like to lose his

    investment. It is not possible to achieve all 4 objectives simultaneously. If the investor aims at

    capital appreciation, he should include securities where there is equal chance of losing the capital.

    Thus there is conflict among the objectives.

  • 40

    Selection of portfolio

    Objectives and asset mix

    If the main goal is ensuring adequate current income, then 60% of the investment is on debt

    instruments and 40% on equities. The proportion changes on individual preferences. Here growth

    of income becomes secondary and stability of the principal ranks third.

    Growth of income and asset mix

    Here the investor looks in certain percentage of growth in income from his investment. The

    investors portfolio may consist of 60-100 % in equities and 0-40% in debt instruments. The debt

    portion of portfolio may consist of investments are entitled to tax exemptions.

    Capital appreciation and asset mix

    Capital appreciation means that the value of original investment increase over the years. Investment

    in real estate may provide a faster rate of capital appreciation, but it lacks liquidity. In the capital

    market, values of shares are much higher than the original issue prices. Next to real estates, the

    stock market offer the best opportunity for capital appreciation. Here he invest. 90-100% of his

    portfolio in equities and 0-10% in debt.

    Safety of principal and asset mix

    Usually risk averse investors are highly particular about the stability of the principal. The investors

    portfolio may comprise more debt instruments, and within the debt portfolio, there would be more

    of short term debts.

  • 41

    Risk and return analysis

    The traditional approach to portfolio is based on some basic assumptions.

    First, an individual prefers larger to smaller returns form securities. An investor has to take risk to

    achieve his goal. The ability to achieve higher returns depends on his ability to assess risk and take

    risk. These risk are interest rate risk, purchasing power risk, financial risk and market risk. The

    investor analyses the varying degrees of risk and construct his portfolio. At first, he establishes the

    minimum income that he must have to avoid hardships under the most adverse economic conditions

    and then decides what loss of income can be tolerated. The investors make a series of compromises

    on risk and no-risk factors such as taxation and marketability after assessing and minimizing the

    main risk.

    Diversification

    Once the asset mix is determined, and the risk and return are analysed, the final step is the

    diversification of the portfolio. Good quality convertibles may balance financial risk and purchasing

    power risk. The portfolio is diversified according to investors need for income and his risk

    tolerance level.

    Steps in portfolio diversification

    Chart 3.2

    The investor must select the industries appropriate to his investment objectives. Each industry meets

    the goals of the investor. Likewise, the investor should select one or two companies from each

    industry. The selection depends on its growth, yield, expected earnings, past earnings, PE ratio,

    dividend and the amount spent on research and development. The final step is to determine the

    number of shares of each stock to be purchased.

    Selection of Industries

    Selection of Compnies in Industry

    Determining the Size of Participation.

  • 42

    ICICI PRUDENTIAL PRODUCT

    ICICI Prudential have different plan are as follows

    TERM

    PLAN

    WEALTH

    PLAN

    RETIREME

    NT PALN GROUP PLAN

    RURAL

    PLAN

    1 ICARE II

    GAURENTEED

    WEALTH

    EASY

    RETIREMENT

    GROUP TERM LIFE

    SOLUTION

    SARV JANA

    SURAKSHA

    2

    CASH

    ADVANTAGE

    EASY

    RETIREMENT SP GROUP GRATUITY

    3

    SAVING

    SURAKSHA

    IMMEDIATE

    ANNUITY

    GROUP

    SUPERANNUATION

    4 ELITE LIFE II

    GROUP LEAVE

    ENCASHMENT

    5

    ELITE

    WEALTH II

    GROUP IMMEDIATE

    ANNUITY PLAN

    6

    WEALTH

    BUILDER II

    Table 3.1

    From the above table we can observe different product and each product have different benefit.

    There are some ULIP plan in which many customer invest heavily as there are reasonable return as

    they are connected with equity and debt market.

    So for customer who have invested in ULIP plan are more in worried about their NAV (Net Asset

    Value).

    So fund performance is important to know the growth of fund so as to increase NAV.

    As I have selected some of the Equity base Fund.

    1) Maximizer fund

    2) Multicap growth fund

    3) Bluechip fund

    4) Rich fund

    5) Opportunity fund

  • 43

    Blue chip fund

    Objective: To provide long term capital appreciation from equity portfolio predominantly

    invested in large cap stocks.

    Asset Mix Asset Mix Asset Mix

    Equity & Equity related securities MAX 100% & MINI 80% 97%

    Debt, Money Market & Cash MAX 20% & MINI 0% 3%

    Table 3.2

    Graph 3.1

  • 44

    Maximiser V

    Objective: the objective of the fund is to provide long term capital appreciation through

    investment primarily in equity & equity related instruments.

    Asset Mix Asset Mix Asset Mix

    Equity & Equity related securities MAX 100% 94%

    Debt, Money Market & Cash MAX 25% 6%

    Table 3.3

    Graph 3.2

  • 45

    Multi Cap Growth Fund

    Objective: To generate Superior Long-term Returns from diversified Portfolio of equity &

    equity related instrument of large, mid & small cap companies.

    Asset Mix Asset Mix Asset Mix

    Equity & Equity related securities MAX 100% & MINI 80% 93%

    Debt, Money Market & Cash MAX 20% & MINI 0% 7%

    Table 3.4

    Graph 3.3

  • 46

    Opportunity Fund

    Objective: To generate superior long-term returns from a diversified portfolio of equity

    and equity related instruments of companies operating in four important types of industries viz.,

    Resources, Investment-related, Consumption-related and Human Capital leveraged industries

    Asset Mix Asset Mix Asset Mix

    Equity & Equity related securities MAX 100% & MINI 80% 90%

    Debt, Money Market & Cash MAX 20% & MINI 0% 10%

    Table 3.5

  • 47

    R.I.C.H Fund

    Objective: The objective of the fund is to generate superior long-term returns from a diversified

    portfolio of equity and equity related instruments of companies operating in four important types

    of industries viz., Resources, Investment-related, Consumption-related and Human Capital

    leveraged industries.

    Asset Mix Asset Mix Asset Mix

    Equity & Equity related securities MINI 80% 98%

    Debt, Money Market & Cash MAX 20% 2%

    Table 3.6

    Graph 3.5

  • 48

    Proportion

    Inception

    date Fund

    Equity

    %

    Debt

    %

    Return

    % Bench mark

    Bench mark

    return %

    29-Aug-11 Maximizer 94 6 19.57

    S&P BSE

    100 19.49

    24-Nov-09 Opportunity 90 10 9.56

    S&P BSE

    200 9.68

    24-Nov-09

    Multi-cap growth

    fund 93 7 10.13 CNX 500 13.54

    24-Nov-09 Bluechip fund 97 3 7.4 CNX nifty 20.19

    11-Apr-08 RICH fund 97 3 8.93

    S&P BSE

    200 22.82

    Table 3.7

    From above table we can observe that the return of fund are almost same in Maximizer &

    opportunity as compare to Bench Mark return. But Rich Fund has given very low return i.e. 8.93 as

    S&P BSE 200 has given around 22.82 so the fund manager might have not selected proper stock.

    -

  • 49

    MANAGEMENT LESSON:

  • 50

    1. Focus on the goal: I learn here to go for your goal dont diversify whatever the matter

    always go straight and achieve goal.

    2. Time management: This is the curtail thing I learn time management because if you a not

    capable to manage your time maybe you lose lots of opportunity in your life.

    3. Decision making skill: I learn about the decision making ability because I take a training

    of financial advisor so my job is to analyze the risk and need and give suggestion to the

    other. So I have to make decision after using need analysis tool.

    4. Know your capability: This is about knows your capability when person know his/her

    capability so he/she is able to provide better performance.

    5. Identify the problem: If person identify the problem then he able to tackle with that

    problem & in insurance we try to identify the problem of the person.

    6. Determine the risk: This is the base in insurance sector which I learn determine the risk

    because if you able to do this & if it is certain then also you save at least rather than losing

    everything.

    7. Transfer the risk:. In insurance sector we learn this thing to transfer your risk to the others

    because it less impact on your financial status. Insurance bearing the risk of others so it

    obvious thing which I learn.

    8. Divide the task in sub-task: If you try to divide your work in different part so it easy to

    handle that task and complete in efficient way.

    9. Generate creative idea: when you think this is the problem then you think how it can be

    handle & come out with creative idea.

  • 51

    10. Take your responsibility: dont try to put your work to the other you should take your

    responsibility & complete work by own.

    11. Co-ordination: dont go individually in the organization. You should support your

    colleague or staff.

    12. Be flexible: Dont follow always a routine make your time table flexible as per

    requirement of the organization.

    13. Make contacts: Make friends in organization you dont know who is came as your support

    in bad times.

    14. Resolve dispute: If there is some conflict between you and your colleague. So resolve this

    dispute and be friend. This is good for peaceful working environment.

    15. Get deep knowledge about your Industry: Whenever you work get deep knowledge about

    that industry to increase your position as well as status.

    16. Keep high your patience: Sometimes you face some person those try to irritates you by

    asking stupid question that time dont lose your patience and give answer with smile on

    your face.

    17. Be energetic: Dont behave like lazy shows your energetic face to the other it make good

    impact on your personality.

    18. Self-confidence: Always keep confidence on you dont lose it because confidence is the

    key of success.

    19. Self-motivation: Always motivate yourself using such types of word you can do it nothing

    is impossible for you.

  • 52

    20. Trust yourself: Keep trust on yourself because if you are not having trust on you then how

    other persons trust on you.

    21. Customer is god: Always respect your customer because you are getting this job to serve

    these customers.

    22. Tolerate others: Dont lose your temperament tolerate others & keep going ahead.

    23. Be good listener: Before taking a decision you should listen the entire things whatever

    they want to speak then reply.

    24. Accept mistake: If you are making some mistake then accept because we all are human life

    and we can make mistake.

    25. Positive attitude: Always think positively because when you start thinking positively then

    almost half of the work done that point of time.

    26. Do work honestly: Always be honest with your work because this is the bread & butter of

  • 53

    RECOMMENDATIONS TO

    COMPANY

  • 54

    RECOMMENDATIONS TO COMPANY

    Since ICICI Prudential Life Insurance co. ltd is the largest in terms of FDI invested, work

    force, market share, no. of customers. All these positive stands of the company place at the

    number one position. On second aspect whatever amount of money ICICI Prudential save, can be

    used to increase the no. of policies, which will helpful to increase the market share of the

    company. Since the customers think about the companies in the industry, when they invest money

    in the life insurance industry. So its necessary to increase the market share of the company. There

    are some recommendations.

    Open some more branches in semi urban and rural area.

    ICICI Prudential has almost its branches in urban area or metros. So in order to

    increase the no. of customer, ICICI Prudential should increase the approach towards

    potential customers. For that it has to increase the branches in the semi urban cities like C,

    D grade cities. And the rural marketing is the best option for ICICI Prudential to increase

    its base in the market

    Improve customer services.

    In order to take the advantage of being industry leader in private sector, ICICI

    Prudential has to improve its customer services. According to my experience in the

    company, a good number of customers forget to pay their premium at time so it causes a

    big loss to the company. ICICI Prudential has already collaborated with the ICICI bank for

    its Bancassurance facility and then can include another feature in it. ICICI bank can offer a

    bank account with the life insurance policy in which an ATM card will be provided. This

    card will have all the information regarding the policy as like future premium payment

    dates, payment made, money value of the policy at that date, value of the unit linked plan

    and all other information what the customer want. This will help the customer to pay

    premium on time and save their losses. This will be mutually helpful for both sister

    companies, ICICI bank will get new account and ICICI prudential will be able to more

    efficient services to their customers.

  • 55

    Bring some unit linked life insurance plans in the market.

    Being a market leader doesnt ensure the leadership in the future. Since after

    increment in FDI from 26% to 49% all player will have the opportunity to capture the

    market share. So in order to maintain its position ICICI Prudential should

    -Introduce some new market linked insurance plan, which will give a competitive

    advantage to the ICICI Prudential against its competitors.

    Trained the financial advisors more efficiently.

    In the changed scenario, more efficient training will be needed, so ICICI Prudential

    should provide good and efficient training to their financial advisors. Because they are the

    one who interact directly with the customers. So good training will give them the right

    way to deal with the potential customers.

  • 56

    IV CONCLUSION

  • 57

    Conclusion

    After the doing this entire project I get a shocking result with the people are giving more importance

    to their financial assets such as car, property etc. than their own life. They are not able to identify

    the value of life. They should understand the life is also as a generating assets which is facilitates

    all these things because you can make a prediction about your valuable assets but you cant make

    prediction about your life.

    Earlier Life Insurance was taken as an option for risk cover or a tax saving by people. But in the

    present scenario the mind set and outlook of people has changed a lot. They now consider Life

    insurance as an investment opportunity in long run. Clients have also shifted a lot from traditional

    plans to Unit linked insurance plan (ULIP). ULIP provide the investor with benefits like Potential

    for better returns.

    They should provide this facility insurance:

    1. Flexibility to invest the money the way customer wants: Unlike traditional plans, Ulips allow

    customer to full discretion to choose the fund option most appropriate to their risk appetite.

    2. Flexibility to change the fund allocation: Ulips also give the customer an option to change the

    fund allocation at a later stage through fund switching facility.

    3. Focus on need based selling of insurance plan rather than increasing number of policies.

    4. Company should focus on only financial advice rather than forcing to purchase policy.

    5. Financial advisor/agent should give proper disclosure about the rider facilities because lots of

    people are not aware about these facilities. So they can save money to invest in other policy to

    secure their need.

    6. Financial advisor should focus on customer need rather than his/her commission.

  • 58

    BIBLIOGRAPHY

    Internet resources:

    Search engine : www.google.co.in ,

    Websites of the organization : www.iciciprulife.com

    Other websites : www.yahooanswer.com

    www.irda.gov.in

    www.Investopedia.com

    Company resources:

    Inputs from company team and trainer.

    Product Brochures of ICICI Prudential Life Insurance co. ltd

    IC33 book for Financial Advisors by IRDA

  • 59

    ANNEXURE

    QUESTIONNAIRE

    Personal information

    1. Name of the proposer/customer. ____________

    2. Age

    o Below 30

    o 30-40

    o 40-50

    o Above 50

    3. Marital status

    o Married

    o Unmarried

    4. Qualification ___________

    5. Occupation

    o Salaried person

    o Self employed

    6. Annual income

    o Below 2L

    o 2-5 L

    o 5-10 L

    o Above 10 L

    7. Dependents

    Name Relation Age/DOB

    Household expenses 8. What are your current responsibilities?

    o Loan

    o Other liabilities (family commitment)

    o Sundry Creditors.

    o Bank CC/ OD

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    9. Do you have any of these?

    o Health insurance. YES / NO

    o Pure Insurance YES/ NO

    o Disability/ physical impairment/ trauma benefits. YES/ NO

    INVESTMENTS

    10. How long do you intent to remain invested?

    o Less than 5 years

    o Between 5- 7 years

    o Between 7-10 years

    o Above 10 years.

    11. How good is your knowledge about Finance and Capital Market?

    o No knowledge

    o Knowledge of Bank FD/Post Office/ NSC

    o Knowledge of Post office/ Mutual Fund/ Share Market.

    o Expert on Finance and capital market.

    12. When you invest money your primary goal is to :

    o Preserve the value of my investment and minimize the risk of my wealth losing

    value

    o Generate current income and also grow the value of investments somewhat

    overtime by taking little risk.

    o Grow the value of investment moderately over time by taking a fair level of risk

    o Grow the value of investment substantially over time by taking a considerable

    amount of risk

    13. Have you invested in any of the following

    o Bank savings & FD

    o ULIP

    o Traditional insurance product

    o Direct equity

    o Government bond

    o Mutual fund

    o Property portfolio (real estate)

    o Retirement fund

    o PPF/ EPF/ VPF

    14. Give your preference on the following investment plans.

    o ULIP

    o Mutual funds

    o Equity

    o Pension fund

    o PPF

    o Government bonds.